Madras HC: GST Dept to Allow Refund Claim in case of Legitimate Export Incentives

The Madras High Court has issued the directive to the concerned GST authorities for permitting the advantage of refund claim as legitimate export incentives cannot be rejected.

Here, the petitioner is BNP Paribas Global Securities Operations Private Limited who has filed 3 refund claims for different periods of time. And subsequently, the three refund claims have been taken into consideration by the respondent (GST authorities) through three separate Order-in-Original. Out of the three refund claims by the applicant, 1 has been accepted by the respondent (GST authorities). However, 2 refund claims have been rejected by the respondent (GST authorities).

Claims filed on 07.09.2017 and 21.09.2017 have been rejected through Order-in-Original. However, a claim filed on 30.10.2017 for the goods exported from April 2017 to June 2017 has been permitted through Order-in-Original. The facts and circumstances of the aforesaid case are that the reasons, given by permitting the refund claim for a sum of Rs 1,65,14,132/-, have to be consented to and consequently the writ petitions ought to be allowed.

It was further submitted that the total worth of Input Tax credit that was un-utilized was Rs 6,62,67,726/- that was not taken into the GST account and so the petitioner was not eligible to refund the claim although the petitioner did not debit the duty in the ST-3 return considering a change in the law.

The single-judge bench of C.Saravanan passed the judgment that the petitioner has also not been able to make utilization of the “credit of duty” as per the provisions of GST which were effective from July 1, 2017; consequently, legitimate export incentives can in no way be denied to the petitioner.

“I find no merits in denying the benefit of the refund claim filed by the petitioner under Rule 5 of the CENVAT Rules, 2004. The respondent shall therefore refund the amount to the petitioner within a period of six weeks from the date of receipt of a copy of this order,” the Court said.