M/s. Elite International through its Proprietor Shri Rohan Arora Vs Commissioner of CGST Delhi North And Ors. (Delhi High Court)
Delhi High Court, in the case of M/s. Elite International through Proprietor Shri Rohan Arora vs. Commissioner of CGST Delhi North & Ors., overturned the rejection of a GST refund application worth ₹16,10,541. The petition challenged an order dated November 23, 2022, by the adjudicating authority, which was later affirmed by the appellate authority on October 25, 2023. The core issue revolved around the realization of export proceeds in Indian Rupees (INR) rather than a freely convertible foreign currency, as evidenced by eBRCs (Electronic Bank Realization Certificates).
The petitioner presented three export transactions for the relevant period, with proceeds partially received in USD and partially in INR through a convertible Vostro account. The adjudicating authority rejected the refund, citing non-compliance with requirements that export proceeds be realized in freely convertible foreign exchange. The appellate authority upheld this decision despite the petitioner’s submission of additional eBRCs at the appellate stage.
The petitioner relied on Circular No. 88/07/2019-GST, which aligns with the IGST Act and RBI guidelines. The circular permits export proceeds in INR routed through freely convertible Vostro accounts for refund eligibility. The petitioner argued that the proceeds met these criteria, yet the authorities failed to apply the circular appropriately. The court observed that the authorities did not adequately consider the circular, which explicitly clarifies that such transactions qualify for refunds when compliant with RBI regulations.
