Gujarat High Court Ruling: Amendment of Shipping Bills and Refund of IGST in Export Transactions

Introduction:

In a recent judgment, the Gujarat High Court in the case of Forward Crop Protection (P.) Ltd. v. Union of India addressed the issue of refund of Integrated Goods and Services Tax (IGST) in the context of export transactions and the application for the amendment of shipping bills. The case highlights the importance of procedural compliance in claiming refunds under the Goods and Services Tax (GST) regime in India.

Forward Crop Protection (P.) Ltd. (hereinafter referred to as “the petitioner”) had exported goods, specifically pesticides, under the category of “Zero Rated Supplies.” Zero-rated supplies in the GST regime refer to supplies on which GST is not levied, but input tax credit can still be claimed. In the course of these exports, the petitioner had paid IGST, which they sought to claim as a refund.

The petitioner approached the Gujarat High Court with a petition seeking various reliefs, including the amendment of specific shipping bills and the sanctioning of the refund of IGST paid in connection with these exports. Additionally, they requested interest on the refund amount, which they alleged had been arbitrarily and illegally withheld by the respondent authorities.

Key Points of the Judgment:

Application for Amendment of Shipping Bills: The petitioner had already submitted an application for the amendment of shipping bills to the respondent authorities. This application was made on January 30, 2023, and was subsequently placed on record by the petitioner through an additional affidavit affirmed on February 7, 2023.

The Court’s Directive: The Gujarat High Court, in its judgment, directed the respondent authorities to decide on the application for the amendment of shipping bills within a period of six weeks from the date of the judgment. This directive underscores the importance of timely processing of such applications and ensuring that exporters are not unduly delayed in their claim for refunds.

Refund of IGST: The petitioner sought a refund of IGST paid in relation to the exported goods, which were categorized as “Zero Rates Supplies.” Under the GST regime, zero-rated supplies are treated as exports, and exporters are eligible for a refund of the input tax credit, including IGST, paid on such supplies. However, the refund process involves certain formalities and documentation, including the submission of shipping bills.

Interest on Refund: The petitioner also requested interest at the rate of 18% on the amount of the IGST refund from the date of the shipping bill up to the date on which the refund would be paid to them. This request for interest indicates the petitioner’s contention that the delay in refund processing was not justified and had financial implications for them.

Relief Granted: The Gujarat High Court disposed of the petition with the directive to the respondent authorities to decide on the application for the amendment of shipping bills within six weeks. The Court also discharged the notice and permitted direct service.

Let’s wrap it up!!

The Gujarat High Court’s judgment in the case of Forward Crop Protection (P.) Ltd. v. Union of India serves as a reminder of the importance of complying with procedural requirements in the GST regime, especially in export transactions. Exporters seeking refunds of IGST or other input taxes must ensure that their shipping bills and related documentation are in order. Additionally, the Court’s directive for a timely decision on the application for amendment of shipping bills reflects the need for efficiency in the refund process to prevent undue delays for exporters. Finally, the Court’s acknowledgment of the petitioner’s claim for interest on the withheld refund underscores the financial implications of such delays for businesses.