Refund of IGST paid on exports cannot be denied where assessee inadvertently claimed drawback under wrong provision

Facts of the case:

1. Under pre – GST regime, on export of goods, exporters are allowed to claim refund of taxes paid in accordance to drawback scheme. In this, All Industry Rates (AIR) for drawback were notified under two columns of the schedule to the notification column A and column B.
2. Column A prescribes a higher drawback rate and caps in respect of cases where CENVAT facility has not been availed. Column B prescribes a lower drawback rate and caps in respect of cases where CENVAT facility has been availed.
3. In the given case, petitioner exported goods between transition period i.e. 01.07.2017 to 30.09.2017 falling under various tariff items mentioned in drawback schedule on due payment of IGST. Petitioner inadvertently claimed duty drawback under Column A (although rates in column A and column B were same) and also filed for refund of IGST paid on export of goods in GST regime.

With given arrangements, following questions were raised: –

• Whether refund of IGST paid on exports cannot be denied where assessee inadvertently claimed drawback under wrong provision?
• And whether grant of refund of IGST along with duty drawback inadvertently availed under wrong provision would result in dual benefit to assessee?

 Findings and Rulings:

• It was held that when rates in column A and column B were identical, then it shall mean that the same pertains to only Customs component and is available irrespective of whether the exporter has availed CENVAT facility or not.
• Since upon introduction of GST, only Central Excise and Services Tax got subsumed in GST and customs remained an indirect tax separate and independent from GST, therefore, refund of IGST paid on exports cannot be denied where assessee inadvertently claimed drawback under wrong provision.
• It was held that refund of IGST paid on export of goods did not in any way lead to double neutralization of input taxes since custom duty was neutralized through drawback of custom portion and, IGST paid on export of goods was neutralized through refund of IGST paid on export of goods.

Source: [2020] 113 taxmann.com 22 (Delhi)dated 3rd January, 2020.