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Central Tax dated the 18.10.2017, Notification No. 78/2017-Customs dated 13.10.2017 and Notification No. 79/2017-Customs dated 13.10.2017. The fundamental principle governing the provisions of refund thus is that in the case of exports, taxes are not exported and accordingly, the tax suffered on the inputs used in the manufacture of export goods is refunded to the taxpayer. However, when tax has not been paid on the goods used in the manufacture of export goods, refund of IGST would tantamount to encashment of ITC. Thus the provisions of Rule 96(10) was formulated to prevent encashment of ITC and to give refund of IGST only where tax paid inputs were used for manufacture of export goods. Thus, after insertion of the Rule 96(10) of CGST Rules, 2017, the said rule effectively bars any exporter who had availed the benefits under Notification No. 48/2017- Central Tax dated the 18.10.2017, Notification No. 78/2017- Customs dated 13.10.2017 and Notification No. 79/2017-Customs dated 13.10.2017, from paying IGST on export goods, including by way of utilizing ITC, and getting refund of the same and this rule applies to all exporters in general. The only criteria to be seen for determining the eligibility of an exporter for paying IGST on export and getting refund of the same, is whether the exporter had availed the benefits under the above said notifications while procuring inputs. On applying the above criteria, it is clearly seen that M/s. Shobikaa Impex, Karur, having availed the benefits under the above said notifications while procuring _____________ https://www.mhc.tn.gov.in/judis inputs, are not eligible to pay IGST on export goods and to avail refund of the same.
35. In the subject Show Cause Notice, the ineligible refund of IGST availed by the Noticee is sought to be recovered under the provisions of Section 74 of the CGST Act, 2017 read with Section 20 of the IGST Act, 2017, by invoking the extended period of limitation. The Noticee have claimed that extended period of limitation cannot be applied to the present case for the reasons that all the details are reflected in the GST Returns and that no information was deliberately withheld with an intent to evade and no allegation of fraud or wilful mis-statement or suppression of facts to evade tax has been made in the Show Cause Notice. The provisions of Section 16(3) of the IGST Act, 2017 and Rule 96(10) of CGST Rules, 2017 are straight and simple and leave nothing for any interpretation. In terms of Rule 96(10) of CGST Rules, 2017, persons claiming refund of integrated tax paid on exports of goods or services should not have received supplies on which the benefit of the Notifications No. 48/2017-Central Tax, dated the 18th October, 2017, No.78/2017 Customs dated 13.10.21017 and No.79/2017 Customs dated 13.10.2017. In the present case the taxpayer have availed the benefit under the above- mentioned Notifications and still, paid IGST on _____________ https://www.mhc.tn.gov.in/judis export and availed refund of the same in terms of Rule 96(1) of the CGST Rules, 2017, even when there is a specific bar on such payment of IGST and on the eventual availing of refund of such IGST paid on export goods. It is further noticed that even after starting to pay IGST on exports and claiming refund of the same in terms of Rule 96(1) of the CGST Rules, 2017, the taxpayer have also cleared the export goods without payment of duty on LUT / Bond. From the factual position as above, it is clearly discernible that the tax payer is well aware that when exemption under Notifications No. 48/2017-Central Tax, dated the 18th October, 2017, No.78/2017 Customs dated 13.10.21017 and No. 79/2017 Customs dated 13.10.2017 are availed on procuring inputs, they are not entitled for refund of any IGST paid on exports. In spite of the clear legal position as above, the taxpayer had deliberately paid IGST on exports and availed refund of the same, thus deliberately contravened the provisions of Rule 96(10) of the CGST Rules, 2017. In the case of refund of IGST paid on exports, the same is processed by the Gateway Customs Authorities based on the Shipping Bill, GSTR-1 and GSTR-3B where the Shipping Bill itself is deemed to be a refund application, and in such cases, the ITC utilized for payment of IGST can be of any type including ITC on Capital Goods. Where there in an express restriction on getting refund of IGST paid on exports, the Noticee preferred to pay IGST on exports with an intent to avail ineligible refund of IGST. If the taxpayer had to opt for refund under Rule 89 of the CGST Rules, 2017, the same is subjected to various restrictions and conditions and it is for the very reason the taxpayer had deliberately resorted to export of goods on payment of IGST for encashing the ITC paid on the inputs, even after knowing fully well that Rule 96(10) of CGST Rules, 2017 clearly prohibits such availment _____________ https://www.mhc.tn.gov.in/judis of refund. Thus, I find that the very act of the taxpayer in paying IGST on export goods utilizing the ITC and availing refund of the same tantamount to suppression of fact for getting refund of IGST which is ineligible. The wrong and deliberate payment of IGST on exports and availing refund of the same in spite of having availed exemption on procurement of inputs, has been brought to light only after the department called for the relevant details from the taxpayer. Thus, I find it is a clear case where the refund of IGST has been availed in a method which tantamount to misstatement of facts and as such, the amount of IGST which has been erroneously refunded is liable to be recovered from the taxpayer under Section 74 of the CGST Act, 2017 read with Section 20 of the IGST Act, 2017 along with the corresponding provisions of SGST Act, by invoking the extended period of limitation, along with appropriate interest under the provisions of Section 50 of the CGST Act 2017 read with the Section 20 of the IGST Act, 2017, along with the corresponding provisions of the SGST Act. For the same reasons, I find that the Noticee have rendered themselves liable to penalty under Section 122(2)(b) of the CGST Act, 2017.”
(i), vide number G.S.R 1321 (E), dated the 23rd October, 2017 has been availed; or
(b) availed the benefit under notification No. 78/2017-Customs, dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1272(E), dated the 13th October, 2017 or notification No. 79/2017-Customs, dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1299 (E), dated the 13th October, 2017 except so far it relates to receipt of capital goods by such person against Export Promotion Capital Goods Scheme.” _____________ https://www.mhc.tn.gov.in/judis
11. The petitioner is perhaps entitled to exemption under Rule 89 of the CGST Rules, 2017, as the petitioner has received inputs under CBEC Notification No.48/2017-Central Tax, dated 18.10.2017 and under Notification No.78/2017-Cus (Tariff) dated 13.10.2017 amending Notification No.52/2003-Cus (Tariff) dated 31.03.2003.
12. I am of the view, the procedural irregularity committed by the petitioner should not come in the legitimate way of grant of export incentives as admittedly exports were made and the refund claims were itself based on the shipping bills.