Page 125 - GSTL_2nd April 2020_Vol 35_Part 1

2020 ] TMA INTERNATIONAL PVT. LTD. v. UNION OF INDIA 27
availed by the petitioner on account of higher rate of duty drawback and pay the
balance of IGST payable to petitioner i.e., IGST minus higher rate of duty draw-
back already availed by the petitioner and avoid the additional burden of interest
payment on IGST refund.
13. We have given due consideration to the contentions raised by the
Learned Counsels for the parties.
14. Though, the challenge in the present petition is also to the vires of
the circulars enumerated above, however, Petitioners are primarily concerned
with the refund of IGST paid on goods exported by them during the transitional
period. The Respondents’ concern is well founded that the Petitioners should not
take undue advantage of the drawback scheme. The purpose behind impugned
circular is to ensure that the exporters do not claim AIRs of duty drawback and
simultaneously avail tax neutralization under GST as this would amount to ex-
porter availing double benefits of neutralization of taxes. However, the fact re-
mains that at no point of time, the petitioners declared that they would forego
the claim of IGST refund. During the transitional period, Petitioners have inad-
vertently claimed benefit under a wrong provision, since there was lack of clarity
with respect to the refund of IGST. Should we deny the benefit simply for this
mistake when the cardinal rule is that taxes should not be exported? The concept
of zero-rated exports envisaged under GST is designed to achieve this objective.
In the current scenario, exporters pay IGST and apply for refund. Thus, for wrong
input given at the time of claiming drawback should not deprive them of this
valuable right. We can’t be immune to the fact that taxpayers have faced difficul-
ties in understanding the complexity of GST procedures. Its implementation has
not been smooth and the Government itself has faced huge challenges. The mod-
el of matching of invoices for purchase, as originally envisioned could not be im-
plemented and a truncated version of returns had to be introduced. This also
entailed frequent issuance of innumerable circulars and notifications in quick
succession, extending deadlines, introduction of fresh procedures and such other
measures. As a result taxpayers were reeling under confusion which continues
until this day implying that much needs to be done despite the efforts and
measures taken by the Government. The situation is not a happy one and has
adverse impact on the taxpayers. There has been influx of cases relating to such
issues. We are also witnessing many cases relating to transitional provisions.
Revenue needs to realise the inefficient implementation of the law has had ad-
verse fallout on the taxpayer. Government would have to embrace initiatives that
would help the taxpayers in the transformation to the new regime. This would
require understanding the difficulties faced by the industry which would be cru-
cial step for success of GST law. Instant case is one such example where Petition-
ers have been victim of technical glitches on account of confusion during transi-
tional phase. We are thus of the view that taxpayers like the Petitioners should
not be denied the substantive benefit of the IGST paid by them on exports.
15. We find merit in the submission of Mr. Bansal that the exporters
would not voluntarily opt for the claim of drawback under Column A at the cost
of foregoing IGST paid on exports, where the duty drawback rates under Col-
umn A and B were same, the exporters would have received the same amount of
drawback even if they would have mentioned “B” in their shipping bills instead
of “A” for claiming drawback. Since the condition for not claiming IGST refund
GST LAW TIMES  2nd April 2020  189