CBIC: Gujarat Excessive Court docket directs CBIC to refund IGST on ocean freight inside six weeks

Many importers had filed the refund claims after the Supreme Court docket order, however their claims are caught.

“It’s directed that if any IGST quantity is collected, the identical shall be refunded inside six weeks together with statutory fee of curiosity,” Justice NV Anjaria mentioned, whereas admitting the petition by Louis Dreyfus Firm India Pvt Ltd Vs Union of India.

The order added that within the Supreme Court docket determination in Mohit Minerals Pvt. Ltd. (supra), because the impugned Notifications have already been declared as extremely vires, current petition deserves to be allowed.

In the meantime, CBIC officers mentioned that the division is but to get a path because the finance ministry had sought a authorized opinion over the Supreme Court docket Order and authorized assessment continues to be below course of. Solely when the ministry will begin the authorized assessment, the tax division can provoke the method of refunds. With out the path, they can’t course of claims, which have reached over Rs 1,000 crore.

“We’re but to get a path. We anticipate a readability within the subsequent GST Council assembly or earlier than that,” a senior official advised ET, including that the centre is but analyzing authorized procedures to go forward with the order. Additionally as the choice to impose IGST was taken by the GST council, centre needs to debate it with council.

Specialists declare that this judgement by the Gujarat Excessive Court docket will give aid to many importers, whose refund software is caught with the tax division. This shall be helpful for sectors that are exterior the ambit of GST regime or are exempted below GST or are below inverted responsibility construction.

“The judgment is probably going to offer aid to sectors the place GST paid is both a price or will get amassed on account of inverted responsibility construction viz., alcohol, energy, petroleum, fertiliser, textile, and so forth,” Saurabh Agarwal, Tax Companion, EY India mentioned.

Trade was complaining that the pending refund claims had been resulting in elevated value of working capital.

Earlier in Might this yr, the Supreme Court docket held that if IGST is paid on freight which is included within the worth of imported items, levying tax once more as a provide of service, was unlawful.

“Having paid IGST (Built-in Items & Service Tax) on the quantity of freight which is included within the worth of imported items, the impugned notifications levying tax once more as a provide of service, with none categorical sanction by the statute, are unlawful and liable to be struck down,” the Supreme Court docket mentioned.