Kashi Exports Vs Union of India & Ors. (Gujarat High Court)
Gujarat High Court sent case back to reconsider refund request as per CBIC’s circular on adjusted total turnover calculation
In Kashi Exports vs Union of India & Ors. (2024), the Gujarat High Court directed tax authorities to reassess a GST refund claim by Kashi Exports. The case revolved around the calculation of the adjusted total turnover under Rule 89(4) of the CGST Rules. Kashi Exports, a proprietorship engaged in zero-rated exports of fresh produce under a Letter of Undertaking (LUT), filed for a refund of unutilized Input Tax Credit (ITC). Disputes arose when authorities partially rejected the refund based on the amended Rule 89(4), as notified in 2022, leading the petitioner to approach the court. During the proceedings, the CBIC issued a clarification via Circular No. 197/09/2023, explaining how adjusted total turnover should be calculated following the rule amendment. The court observed that the CBIC clarification resolved doubts over the calculation methodology, stating that the turnover used in the formula must align with the amended definition. This clarified that Kashi Exports was entitled to a refund of the full claim amount of ₹56,14,652, instead of the ₹35,31,021 earlier sanctioned. Consequently, the court remanded the case back to the authorities with instructions to reevaluate the refund application per the new guidelines and complete the process within 12 weeks. This judgment highlights the interplay between rule amendments and exporter entitlements under GST laws.
