After a short lull, exporters have started receiving notices for wrong availment of GST refund on exports. 

The said recovery notices run into crores of Rupees. Fact is exemption from payment of IGST has been availed by the importers at the time of import as per Advance Authorization Scheme.

Exporters after consuming the said goods during manufacture have exported the final products on payment of GST during the period July 2017 to September 2018. The refund due to them as per shipping bill has also been received. The said refund is now a bone of contention between the department and the trade.

The restriction of claiming refund on payment of GST for exports where imports were made availing the benefits of advance authorization was introduced from October 2018. However, the authorities have initiated enquiry with a set mind to recover IGST refunded to various exporters during the period July 2017 to September 2018 (i.e. before amendment) and have availed benefit of advance authorization scheme.

There was a huge confusion due to various notifications issued by the authorities from time to time and frequent modification/amendment to Rule 96(10). 

However, the last notification issued on 09.10.2018 specifically clarified that “The amendments shall come

into force on the date of their publication in the Official Gazette”. Hence the restriction for claiming refund on payment of IGST during export for those assesses who have claimed the benefit of advance authorization arose only from October 2018. Before the said date there were no restrictions. 

Further the said issue was clarified by the CBIC authorities also vide their circular in 2018. Even the Gujarat High court in the case of Zaveri And Co Pvt Ltd v. Union of India have held that condition prescribed under Notification No 54/ 2018 (supra) should have prospective application. The exporters have claimed the legitimate refund due

to them till September 2018. 

Further, it is a settled principle of law and upheld by the Honorable Supreme Court that statute is always prospective unless expressly provided to be retrospective. In the given case the same has been expressly provided to be prospective but still enquiry notices are being issued causing undue stress and harassment to the trade.

The authorities must ensure immediately that no coercive recovery of tax from any exporters or any other type of harassment is done for such refund granted on exports during the period July 17 to September 2018 (i.e before amendment). Further immediate issuance and clarification in the matter by the Ministry/Council to stop the undue process of exporter going through the rigours of assessment, appeal, writ petitions etc. 

Let us not forget that GST has been introduced to ensure ease of doing business and not complicate the same with unnecessary hassles.