Madras High Court rules on refund of Input Tax Credit

Madras High Court rules on refund of Input Tax Credit

The bench directed the authorities to repay the amount to the petitioner, along with interest, within three months

The Madras High Court has held that the claim for duty drawback is not a bar for a refund of Input Tax Credit (ITC) under the Integrated Goods and Services Tax Act, 2017.

The petitioner, Numinous Impex (I) Pvt. Ltd exported consignments of goods and claimed duty drawbacks under the provisions of the Customs and Central Excise Duties and the Service Tax Drawback Rules, 2017 under the Customs Act, 1962.

It claimed a refund of ITC availed on the input and input services used in the export goods, which was denied. Aggrieved by the order, the petitioner filed a writ petition before the high court.

The court observed that the refund of ITC under the Acts and Rules could not be denied merely because the petitioner claimed duty drawback under the provisions. It held that the petitioner was entitled to a duty drawback at 2 percent irrespective of the fact whether it had availed ITC under the provisions of the Central Goods and Services Tax (CGST) or the State Goods and Services Tax (SGST).

The single bench of Justice C Saravanan held, "The respondents are directed to scrutinize the refund claims filed by the petitioner under the Integrated Goods and Services Tax Act, 2017 read with the Central Goods and Services Tax Act, 2017, the Central Goods and Services Tax Rules, 2017, and other applicable rules. It should refund the same together with applicable interest under the provisions of the respective enactments, within a period of three months."