Delhi High Court Directs IGST Refund After Deducting Differential Amount Of Duty Drawback

The Delhi High Court has directed the department to grant IGST refund paid on the goods exported after deducting the differential amount of duty drawback.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that the Jurisdictional Commissionerates shall be entitled to verify the extent of duty drawback availed by the petitioners and also whether they have availed duty drawback/CENVAT Credit of Central Excise & Service Tax component in respect of the exports made by them. If any adjustment is to be made, it shall be made by the jurisdictional commissionerate.

The petitioners/assessee have sought directions to the respondents to grant a refund of IGST paid on goods exported by the petitioners after deducting the differential amount of duty drawback, along with appropriate interest on the refund from the date of the shipping bill till the date of the actual refund.

The petitioners stated that even though the drawback rates prescribed in respect of goods exported by the petitioners were higher in column A (1%) than the rates prescribed in column B (0.15%), the rate at which IGST (18%) was paid on the goods exported was even much higher than the rate in column A. Petitioners did not have any benefit in claiming drawback under Column A at the cost of forgoing their IGST refund. The drawback was claimed under Column A because of the confusion and lack of technical knowledge prevalent during the transitional phase about the working of the new indirect tax laws.

The department contended that no instructions had been received from the Board (CBIC). The writ petitions are liable to be dismissed on account of non-joinder of necessary and proper parties as various jurisdictional commissionerates dealing with the separate refund claims of the petitioners have not been impleaded as parties to the writ petitions.

The court allowed the petitions, directing the respondent to grant a refund of IGST paid on the goods exported by the petitioners during the transitional period, after deducting the differential amount of duty drawback, if the differential amount has not already been returned by the petitioner, within twelve weeks, along with appropriate interest at the rate of 7% p.a. on refund from the date of the shipping bill till the date of actual refund.

Case Title: Kishan Lal Kuria Mal International versus Union of India

Citation: 2022 LiveLaw (Del) 949

Date: 06.10.2022

Counsel For Petitioner: Advocates Sakshi Singhal and Lovely Singh

Counsel For Respondent: Sr. Panel Counsel Himanshu Pathak

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