Gujarat HC: Orders Centre to Pay Export Refunds With 9% Interest

The Gujarat High Court (HC) orders the Central Government as well as the Central Board of Indirect Taxes and Customs (CBIC) to pay the export refunds to an export firm. The HC has also ordered the authorities to pay an interest of 9% w.r.t. the outstanding amount concerning the delay caused in the overall process. The government has received a deadline of two months to make the payment from the high court.

Saraf Natural Stone, a chemical exporting firm, claimed that after the implementation of the GST laws on July 2017, it had not received any export refunds. Last year, a petition was submitted by the firm to avail export refund under the IGST Act. The firm cited 15 invoices through which it had claimed export refunds worth more than Rs 13 lakh in August 2017.

Vishal Dave, the advocate who spoke on behalf of the petitioner, claimed that the authorities had not made export refunds for almost a year. He also mentioned that according to the provisions of the IGST Act, 90% of the export refunds payment has to be done upfront. The remaining 10% of the amount has to be paid in the following seven days.

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Even after repeated representations, the firm did not receive any reply from the authorities. Finally, in October 2018, the firm approached the HC requesting for compensation as well as interest concerning the considerable delay that was caused in making the refund payment of IGST with regards to the export of commodities.

The firm also mentioned that the prolonged delay in receiving the export refund harmed the company’s working capital. Gradually, the firm lost its ability to operate the business.

After listening to the case, the bench, comprising Justice J. B Pardiwala and Justice A.C Rao, ordered the government to make the export refund payment to the firm along with 9% interest as the export refunds were already claimed.

This judgement gave relief to all of the exporters who were waiting for their export refunds after the enforcement of the GST laws.

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