Page 122 - GSTL_2nd April 2020_Vol 35_Part 1

24 GST LAW TIMES [ Vol. 35
duction of GST Regime i.e. from 1-7-2017 to 30-9-2017. The factual narrative in
the petition is that, export of goods from India is “zero-rated” i.e. the Petitioners
are exempted from payment of tax on the goods exported from India. The Gov-
ernment provides various types of export incentives and refund mechanisms to
ensure that exports are made duty and tax free. Prior to the introduction of GST
regime in India, Petitioners were governed by Customs Act, 1962 read with Cen-
tral Excise Duties and Service Tax Drawback Rules, 1995; Central Excise Rules,
2002; and Central Sales Tax Act, 1956 read with Central Sales Tax Rules, 1957.
Under the pre-GST regime, Petitioners used to issue FORM CT-1 and FORM
ARE-1, for procuring excisable goods without payment of excise duty; and H
FORM to avail exemption from payment of Sales Tax; Pertinently, a duty draw-
back scheme was available to them to neutralize the customs duty, central excise
duty and service tax charged on any imported materials or excisable materials
used as input services in the manufacture of export goods. Post-introduction of
the GST, Central Excise and Service Tax were replaced by GST, however, cus-
toms remained an indirect tax separate and independent from GST and was not
subsumed under the GST mechanism. Thus, post-introduction of the GST re-
gime, the drawback scheme was meant only to claim exemption of the customs
component of the exported goods and simultaneously, Petitioners could claim
refund of the IGST paid on export of goods, in lieu of the excise duty and service
tax paid on such goods, since these were integrated into a single tax i.e. IGST.
4. Under the Customs Notification No. 131/2016, dated 31-10-2016, the
All Industry Rates (hereinafter referred to as ‘AIRs’) for drawback were notified
under two Columns of the Schedule to the notification; Column A comprising of
Columns 4 and 5, which prescribes a higher drawback rate and caps in respect of
cases where Cenvat facility has not been availed. Column B comprising of Col-
umns 6 and 7, prescribes a lower drawback rate and caps in respect of cases
where Cenvat facility has been availed. Upon introduction of GST, Central Excise
and Services Tax got subsumed in GST and neutralisation of GST on exported
goods came to be provided in GST legislations. In order to ensure smooth transi-
tion to GST regime, Government vide Notification No. 59/2017-Cus. (N.T.), dat-
ed 29-6-2017 allowed the extant duty drawback scheme to continue for a period
of three months i.e. from 1-7-2017 to 30-9-2017. During this transition period, the
exporter could continue to claim the AIRs of duty drawback specified in columns
4 and 5 of the Schedule of the AIRs of duty drawback notified under Notification
No. 131/2016 referred above.
5. Petitioners exported goods falling under various tariff items men-
tioned in the Drawback Schedule, on due payment of IGST. It is claimed that
since the Drawback Schedule prescribed identical tariff rates under Column A as
well as Column B, in respect of goods exported and further since there were no
guidelines from the GST or Customs department in respect of procedure to be
followed in such cases, petitioners inadvertently claimed drawback under Col-
umn A, which was mostly between 1.5-4%.
6. As per Rule 96 of CGST Rules, 2017 the shipping bill filled by an ex-
porter is deemed to be an application for refund of IGST, paid on the goods ex-
ported out of India. In view of the aforesaid provision, Petitioners awaited re-
fund of IGST in their bank accounts. When the same was not credited, corre-
spondence was initiated with Customs Department. Initially, the claim of IGST

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