Circular No. 14/2018 - Customs dated 04th June 2018 is neither clarificatory nor it determines the eligibility of allowing refund of Input Tax Credit on exports.

IN THE HIGH COURT OF DELHI AT NEW DELHI 
W.P. (C) 3917/2020 
MEDICAL BUREAU ...... Petitioner 
Through: Mr. Rajesh Mahna, Advocate with Mr. Ruchir Bhatia, Mr. Mayank Kouts and Mr. Ramanand Roy, Advocates. 

versus

COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX DELHI NORTH & ORS. ...... Respondents 

Through: Mr. Harpreet Singh, Senior Standing Counsel.
Date of Decision: 10th November, 2020 

CORAM: 
HON'BLE MR. JUSTICE MANMOHAN 
HON'BLE MR. JUSTICE SANJEEV NARULA 

J U D G M E N T

MANMOHAN, J (Oral)

1. The petition has been heard by way of video conferencing. :

2. The petitioner by way of the present writ petition challenges the order dated 01st June, 2020 passed by the Appellate Authority whereby the respondent have denied refund due to the petitioner in spite of the fact that the petitioner had made exports of goods outside India and such exports are regarded as zero rated supplies under Section 16 of the Integrated Goods and Services Tax Act, 2017 (for short ‘IGST Act’) on which the petitioner was entitled to refund of input tax credit under Section 54(3) of the Central Goods and Services Tax Act, 2017 (for short ‘CGST Act’). The relevant portion of the impugned order reads as under:

“8. Summary of decision:- As per notification no. 48/48/2018-Cusoms (NT) dated 04.06.2018 read with circular no. 14/2018-Customs dated 04.06.2018, it was noticed that the export regulations states that "Any IEC holder exporting goods through the FPO, will be eligible for zero rating of exports, by way of IGST refund or discharge of LUT” and same come into force on 21st

3. Mr. Rajesh Mahna, learned counsel for the petitioner states that the refund has been denied to the petitioner on the sole ground that petitioner had exported goods through Foreign Post Offices in August and September 2017, while Notification dated 04 June 2018. The said circular as made it clear that the facility of IGST Refund or discharge of LUT in case of export made through FPO will not be effective retrospectively. However, the subject refund claims pertained to the period August, 2017 and September, 2017 and hence the supplies made by the appellant during these periods are not 'zero rated' and therefore, in view of the above circular dated 04.06.2018, the appellant is not entitled for refund of Input Tax Credit as the LUT is not discharged.”

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