Refund allowed of IGST paid by assessee on ocean freight charges

The Hon'ble High Court, Gujarat in the matter of M/S Louis Dreyfus Company India Private Limited v. Union of India [SPECIAL CIVIL APPLICATION NO. 11540 of 2021 dated July 07, 2022] has directed the department to grant refund of Integrated Goods and Services Tax ("IGST") already paid by the assessee on the amount of ocean freight charges.

Facts

M/s Louis Dreyfus Company India Private Limited ("the Petitioner") has engaged in the business of processing of edible oils and coffee etc. has filled the present Special Civil Application prayed to direct the Revenue Department ("the Respondent") to refund the IGST paid on the amount of ocean freight charges with interest. It was furtherprayed to prohibit the Respondent authorities from collecting the IGST in terms of Notification No. 10 of 2017 - Integrated Tax (Rate) dated June 28, 2017read with Notification No. 8 of 2017 – Integrated Tax (Rate) dated June 28, 2017.

Petitioner's Contention

• Relied upon the judgement of the Hon'ble Supreme Court in the case of Mohit Minerals Pvt. Ltd. vs. Union of India [Special Civil ApplicationNo. 726 of 2018 dated January 23, 2020] ("the Mohit Minerals Case") wherein it was held the aforesaid notifications are unconstitutional and ultra vires the statute.
• The Petitioner by relying on the decision Adi Enterprises vs. Union of India being Misc. Civil Application No. 1 of 2020 [Special Civil Application No. 10479 of 2019], submitted that refund of the IGST paid pursuant to the aforementioned Notifications, the Court directed the department to refund the amount of the IGST already paid by the assessee.

Issue

• Whether the Petitioner is eligible for the refund of IGST on amount of ocean freight?

Held

The Hon'ble High Court, Gujarat in Special Civil Application No. 11540 of 2021 dated July 07, 2022has held as under:

• Opined that, the present application requires consideration and hence, the same is allowed interms of prayers. The Respondentis directed to grant refund of the amount of IGST already paid by the Petitionerpursuant to the Notification No.10/2017-IGST(Rate) dated June 28, 2017 along with statutory rate of interest on such refund within a period of four weeks from the date of submission of necessary documents by the Petitioner.
• Relied upon the decision of the Hon'ble Supreme Court in the Mohit Minerals Case wherein, the aforesaid Notifications have already been declared as ultra vires,present petition deserves to be allowed.
• Held that, the petition is allowed, and it is directed that if IGST amount is collected, the sameshall be refunded within six weeks alongwith statutory rate of interest.