GST Update on Non Transmission of Data from ICEGATE to GST Portal cannot be ground for denying refund

During the initial stages of the implementation of GST Law, exporters faced lot of difficulties in claiming refund of IGST paid on exports as the refund mechanism was totally digitized and there were lot of technical glitches on the GST portal. However, the refund claims were being denied for minor procedural lapses which had led to inconvenience to the assessees. Recently, the issue regarding denial of refund of IGST paid on exports for nontransmission of data from ICEGATE to GST portal was placed before the hon’ble Bombay High Court in the case of SRC Chemicals Private Limited & Anr. Vs Central Board of Indirect Taxes and Customs. The outcome of this decision is the subject matter of discussion of our present update. The petitioner has exported certain goods from Jawaharlal Nehru Port, Nhava Sheva nearly the end of June 2017. Since the indirect tax regime was set to undergo a complete change and since the said port was also in the process of adopting new system for transition to GST regime, the shipping bill which should have got printed on 28/6/2017 got printed on 1/7/2017 i.e. after implementation of GST Act. Since GST was applicable with effect from 1/7/2017 and leviable on the export of goods, the shipping bill got printed on 1/7/2017 with petitioner’s GST Number and levy of IGST with the date of 29/6/2017. The petitioner has submitted all the documents to the port but the process of printing the shipping bill in port was beyond their control. The petitioner contended that since the supplies of goods for export were reflected as with payment of integrated tax at the time of export, they paid the applicable IGST and opted for claiming refund of the same. Reliance was placed on the circular no. 26/2017-Customs dated 01-07-2017, wherein it was clarified that the assesses are not required to file any separate application for refund of IGST paid on supply of goods for exports. The petitioner had approached the customs office to check the status of its refund but they were informed that unless export data was transmitted from GSTN to ICEGATE, the Customs office would not be in position to process the refund claim. Petitioner had no control or role to play in the transmission of data from GSTN to ICEGATE. Consequently, the petitioner filed an application for refund in Form GST RFD01A and thereafter received show cause notice from department proposing to reject petitioner’s application for refund. The petitioner has filed reply but their refund claim was rejected by the adjudicating authority. Thereafter, the petitioner preferred an appeal before the Commissioner of Central Tax (Appeals-II) but their appeal was rejected on the ground that the jurisdiction for deciding the issue of refund of the IGST paid on exported goods was with the Customs. Hence, the petitioner filed petition before the High Court. The hon’ble High Court held that unfortunately, it is more than 4½ years since the amount has not been refunded and it was the responsibility of the department to ensure that petitioner was sanctioned refund. Hence, the Bombay High Court directed the GST Authority to issue refund along with the interest @9% from the date of filing petition along with cost of Rs. 25,000/-. The above decision is a landmark decision for the cases wherein the refund claim of IGST paid on export of goods was stuck on account of technical lapses such as non-transmission of data from ICEGATE to GST portal. The departmental authorities should take endeavour to resolve the difficulty in grant of refund rather than rejecting the claims without any justifiable reasons. It is hoped that this decision will serve as a strong binding precedent for claiming refunds withheld for technical lapses in the GST portal.

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GST Update on Non Transmission of Data from ICEGATE to GST Portal cannot be ground for denying refund

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