Regularization of IGST Refunds Claimed in Violation of Rule 96(10)

Last updated: 25 September 2024

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This circular provides clarification on the regularization of IGST refunds that were claimed in violation of Rule 96(10) of the CGST Rules, 2017. Specifically, it addresses situations where exporters imported inputs without paying integrated tax and compensation cess, but later paid these dues (or are willing to pay them) along with interest. The clarification aims to provide guidance to field formations and the trade on how to handle such cases.

Circular No. 233/27/2024-GST

F. No. CBIC-20001/6/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
***

New Delhi, dated the 10th September, 2024

To,

The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax and Central Tax (Audit) (All)
The Principal Directors General / Directors General (All)

Madam/Sir,

Subject: Clarification regarding regularization of refund of IGST availed in contravention of rule 96(10) of CGST Rules, 2017, in cases where the exporters had imported certain inputs without payment of integrated taxes and compensation cess - regarding.

Sub-rule (10) of rule 96 of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”) provides for a bar on availment of the refund of integrated tax (IGST) paid on export of goods or services, if benefits of certain concessional/exemption notifications, as specified in the said sub-rule, have been availed on inputs/raw materials imported or procured domestically. In this regard, references have been received from the field formations and trade/ industry wherein clarification has been sought on whether refund of integrated tax paid on exports of goods by a registered person can be regularized in a case where the registered person had initially imported inputs without payment of integrated tax and compensation cess, by availing the benefits under Notification No. 78/2017-Customs dated 13.10.2017 or Notification No. 79/2017-Customs dated 13.10.2017, but subsequently, at a later date, the said person has either paid the IGST and compensation cess, along with interest, on such imported inputs or is now willing to pay such IGST and compensation cess, along with interest.

For full notification please refer to the attachment

FAQ :

Rule 96(10) of the CGST Rules, 2017, states that a refund of integrated tax (IGST) paid on exported goods or services cannot be claimed if benefits of certain specified concessional or exemption notifications were availed on imported or domestically procured inputs.

This circular clarifies the situation where an exporter imported inputs without paying integrated tax and compensation cess, by availing benefits under Notification No. 78/2017-Customs or 79/2017-Customs, but subsequently paid the due taxes and interest.

Yes, the circular addresses the regularization of IGST refunds in cases where the exporter has either already paid the IGST and compensation cess with interest on the imported inputs, or is now willing to pay them.

This clarification is for the Principal Chief Commissioners, Chief Commissioners, Principal Commissioners, Commissioners of Central Tax and Central Tax (Audit), and Principal Directors General/Directors General.