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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST UPDATE ON PRACTICAL DIFFICULTY FOR EXPORTERS SUPPLYING GOODS ON PAYMENT OF IGST

GST UPDATE ON PRACTICAL DIFFICULTY FOR EXPORTERS SUPPLYING GOODS ON PAYMENT OF IGST

PRACTICAL DIFFICULTY FOR EXPORTERS SUPPLYING GOODS ON PAYMENT OF IGST-
According to the provisions of section 16 of the IGST Act, 2017, an exporter is eligible to claim refund under either of the following options:
(a) He may supply goods or services under bond without payment of IGST and claim refund of unutilized input tax credit as per section 54 of CGST Act;
(b) He may supply goods or services, on payment of IGST and claim refund of IGST paid on goods and services exported in accordance with provisions of section 54 of the CGST Act, 2017.
Rule 96 of the CGST Rules, 2017 provides for provision relating to refund of integrated tax paid on goods exported out of India wherein it has been stated that filing of valid return in GSTR-3 or GSTR-3B will be deemed as application of refund. Moreover, section 54(7) prescribes the time limit for issue of order as sixty days from the date of receipt of application of refund which is complete in all respects. It is also worth mentioning that in case of any claim for refund on account of zero rated supplies, section 54(6) provides benefit of provisional refund of 90% of the total amount of refund claimed excluding the amount of input tax credit provisionally accepted. The benefit sought to be given to the exporters by way of provisional refund of 90% of the total refund is with the condition that the amount of provisional input tax credit shall be excluded from the total claim. This in turn seeks to nullify the purpose of the benefit intended to be given to the exporters because the refund claim is required to be sanctioned within a period of 60 days from the date of receipt and the provisional input tax credit takes a period of one month to be able to be considered as final input tax credit. It is submitted that although there is no restriction as regards utilisation of provisional input tax credit, the refund claim filed by the exporters by utilising provisional input tax credit will be withheld until the said input tax credit is finally accepted.

The government has relaxed the provisions regarding filing of GSTR-1, GSTR-2 and GSTR-3 for July, 2017 and August, 2017. The assessee is required to file GSTR-1 for July, 2017 from 1st to 5th September and GSTR-2 for the month of July, 2017 from 6th to 10th September. Hence, the mechanism of provisional input tax credit for the month of July, 2017 will commence in the month of September, 2017. The details of inputs procured from various suppliers by the exporters will be auto-populated in GSTR-2 by 10th September, 2017 and the GSTR-3 for July, 2017 will be filed upto 15th September, 2017. Now, it is not clear that whether the provisionally admissible input tax credit for the month of July, 2017 will be finalised by 15th September or by 30th September, being the last date for filing GSTR-3 for the month of August, 2017. In any case, even if it is assumed that the input tax credit for the month of July, 2017 is finalised by 30th September, 2017, the claim of refund of exporters supplying goods or services on payment of IGST will be delayed. 
Since the closing balance of credit from Excise, VAT and Service Tax returns will be available in the Electronic Cash Ledger only after filing TRAN-1, the export of goods and services on payment of IGST will be made only by utilising the provisional credit admissible to them. It is pertinent to mention that the filing of GSTR-3 or GSTR-3B will be deemed as an application for claiming refund of IGST paid on exports. It is also worth noting that although GSTR-3B has been mentioned as one of the ways of claiming refund of IGST paid on exports but the format does not contain any details pertaining to shipping bill number through which refund could be granted. Hence, it appears that the refund of IGST paid on exports will be admissible only after filing GSTR-3 because the provisional credit used by the exporters will not be refunded on provisional basis. The GSTR-3 for the month of July, 2017 will be filed on 15th September, 2017 which will adversely affect the working capital requirements of the exporters. 
It is also submitted that even for the month of September, 2017, although, the exporter will utilise the provisional credit for payment of IGST and it will be deemed that the refund application of IGST paid on exports has been filed on 20th October, 2017 but inspite of this, the provisional refund to the extent of 90% will be admissible only after 20th November, 2017 when the provisional input tax credit will be finally accepted. This will have the effect that the refund application will be filed on 20.10.2017 whereas the provisional refund of 90% will be granted after 20.11.2017 while the order for refund is to be passed upto 19.12.2017. Say for example, if the opening balance of input tax credit in September, 2017 was Rs. 1,00,000/- while the provisional input tax credit received during the month of September, 2017 was Rs. 5,00,000/- and the IGST paid on exports by utilising input tax credit was Rs. 3,00,000/-, then the exporter will get provisional refund of Rs. 90,000/- (being 90% of Rs. 1,00,000) as the input tax credit of Rs. 5,00,000/- would be finally accepted by 20.11.2017. In our opinion, the ultimate purpose of the benefit will be defeated if the provisional refund is granted excluding the amount of provisional input tax credit.

 

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