Non Transmission of Data from GSTN to ICEGATE cannot be basis of non-payment of GST Refund

In matter of SRC Chemicals Private Limited & Anr. vs. Central Board of Indirect Taxes the Bombay High Court has made a landmark judgement that Non Transmission of Data from GSTN to ICEGATE cannot be basis of non-payment of GST Refund.

Petitioner exported certain goods on 28/6/2017 from Jawaharlal Nehru Port, Nhava Sheva. The formalities pertaining to printing of shipping bill etc were undertaken at the Port. It is the petitioner’s case that as per the practice prevalent at the said Port, the shipping bill would get generated and printed at the said port based on documents submitted by the exporter. Since the indirect tax regime was set to undergo a complete change and since the said Port was also in the process of adopting new system for transition to GST regime, the shipping bill which should have got printed on 28/6/2017 got printed on 1/7/2017. Since GST was applicable with effect from 1/7/2017 and leviable on the export of goods, the shipping bill got printed on 1/7/2017 with petitioner No.1’s GST Identification Number and levy of IGST albeit with the date of 29/6/2017.

Petitioner has submitted that he has no control over the process of printing the shipping bill at the said port (at the said port office printing the shipping bill is done based on documents submitted by the exporter without any involvement of the exporter).

Petitioner submitted that supplies of goods and services for export have been categorized as “Zero Rated Supply” which means that goods could be exported under bond or Letter of Undertaking without payment of integrated tax followed by a claim of refund of unutilized input tax credit or on payment of integrated tax with provision for refund of the tax paid. Petitioner chose to pay the amount of Rs.22,92,587/- being the IGST and claim a refund.

Shipping bill since had all details including IGST, invoice details was to be deemed to be an application for refund itself. As petitioner did not receive the refund of IGST of Rs.22,92,587/- on or about 16/9/2018 petitioner approached the customs office to check the status of its refund. Petitioner No.1 was informed that unless export data was transmitted from GSTN (GST Network) to ICEGATE (Indian Customs Electronic Gateway), the Customs office would not be in position to process the refund claim. Petitioner had no control or role to play in the transmission of data from GSTN to ICEGATE.

Petioner also filed for application for refund in Form GST RFD-01A. But his application was rejected the appeal on the ground that the jurisdiction of refund
of the IGST paid on exported goods was with the Customs.

Petitioner kept sending reminders. In return he got communication that the data for the said shipping bill of petitioner was not transmitted from GSTN to ICEGATE and therefore his office is unable to process IGST refund.

Finally, the petitioner filed an appeal with the Bombay High Court. To this court has said that non-transmission of data from GSTN to ICEGATE cannot be the petitioner’s problem. He also ordered that the pending amount of refund should be given to Petitioner along with an interest of 9%. The relevant extract is given below:

Petitioner No.1 is entitled to refund but petitioner No.1 is made to run from pillar to post only because data of IGST refund is not transmitted from GSTN to ICEGATE. That cannot be the petitioner’s problem and it was the responsibility of respondents and in particular respondent no.6 to ensure that petitioner No.1 got its refund. Unfortunately, it is more than 4½ years since the amount has not been refunded.