Omission of Rule 96 (10) of CGST Rules, 2017 in purview of Notification 20/2024- Central Tax dated 8th Oct 2024
Rule 96(10) of the CGST Rules, 2017 implies restrictions on registered persons from exporting taxable goods with payment of IGST and at the time of claiming a refund if they have received supplies benefiting from certain notifications. Key notifications include those allowing supplies against Advance Authorization, Export Promotion Capital Goods Authorization, and exemptions for goods imported by Export Oriented Units (EOUs). The GST department has initiated legal actions, including summons and show-cause notices, for claiming wrong IGST refunds, also imposing penalties and interest under the CGST Act. This provision results in creating challenges for exporters, disruption of business operations and affecting foreign investments in a negative manner. In response, exporters have fought against Rule 96(10) in High Courts, resulting in recent rulings, such as the Kerala High Court declares the Rule 96(10) as “ultra virus” to the IGST Act.
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