Ahmedabad: In what could be a major relief for numerous exporters awaiting export refunds after enactment of GST laws, the Gujarat high court has ordered the central government and the Central Board of Indirect Taxes and Customs not only to pay the export refunds to an export firm, but also directed the authorities to pay the due sum with 9% interest for the delay caused in the process.

The HC has ordered the government to make the payment within two months.

Last year, a city-based chemical exporting firm, Saraf Natural Stone, filed a petition to avail export refund under the Integrated Goods and Service Tax Act claiming that ever since the enactment of GST laws in July 2017, it did not receive export refunds. 

The company claimed that export refunds had not been made by the authorities for nearly a year, whereas the IGST Act provisions say that 90% of export refunds should be paid upfront and the rest 10% amount is to be paid in next seven days, said advocate Vishal Dave who represented the petitioner.

The company cited 15 invoices on which it had claimed refunds of over Rs 13 lakh in August 2017. 

There was no response from the authorities upon repeated representations. Finally, the company moved the HC in October 2018 seeking compensation and interest towards the substantial delay in making payment of refund of IGST on export of goods.

The company also contended that inordinate delay in refund severely impacted the working capital of the company and it substantially diminished its ability to continue its business.

After hearing the case, the bench of Justice J B Pardiwala and Justice A C Rao ordered the government to pay the export refunds to the company with 9% interest since the refunds were claimed. For granting interest, the HC said, “The provisions relating to interest of delayed payment of refund have been consistently held as beneficial and non-discriminatory”. 

Published On : 26-07-2019

Source : Times of India