Refund of IGST paid on exported goods being zero-rated supplies admissible as excess drawback repaid

ADF Foods Ltd. Vs Union of India (Gujarat High Court)

Gujarat High Court held that excess drawback on account of availing Cenvat Credit facility was repaid with interest. Hence, refund of IGST paid on goods and services paid on exported goods being zero rates supplies is duly admissible.

Facts- Vide the present petition, the petitioner challenges the inaction on the part of the respondents not to sanction the refund claims of integrated goods and service tax paid on exported goods i.e. “Zero Rated Supplies” through Mundra Customs Port.

It was their case that due to oversight, the Custom House Agent had inadvertently selected “A” suffixed with the serial number in the drawback notification which provides for higher drawback rates concerning cases where CENVAT facility has not been availed, instead of “B” which provides for lower draw back for cases that are otherwise. It was their case that the excess drawback on account of availing of CENVAT credit facility had been repaid with interest and therefore the petitioner is entitled to the refund of IGST in respect of the shipping bills.

Conclusion- Undisputedly the goods exported by the petitioner were “Zero Rated Supplies” and in accordance with Section 16(3)(b) of the IGST Act, the petitioner is entitled to refund of such tax paid on the goods and services. It was only through oversight that the custom house agent had selected ‘A’ rather than ‘B’.

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