GSTAT Upholds Export Refund for Invoices Issued During Claim Period, Though Goods Were Exported Later

In brief

The question

Whether the value of goods invoiced during the refund period may be included in the “turnover of zero-rated supply of goods” under Rule 89(4) of the CGST Rules when those goods were exported after that period.

The court held

The Tribunal answered the issues against the Department, held the refund admissible in respect of the three consignments, dismissed the Department’s appeal and upheld the Appellate Authority’s order.

01Facts

Gurudev Sales Corporation claimed a refund of ₹26,72,178 for the period 1 April to 31 October 2022, on account of accumulated ITC relating to exports made without payment of tax.

¶ 3–4

The sanctioning authority granted ₹26,68,324.

¶ 3–4

The Department challenged the refund sanction, including the inclusion of FOB value of three consignments covered by shipping bills dated 1 November 2022.

¶ 3–4

The Appellate Authority dismissed the Department’s appeal, and the Department appealed to the GSTAT on this issue alone.

¶ 3–4

The Tribunal noted that the portal had incorrectly shown the filing officer as the appellant and directed that the cause title be read as “Commissioner of CGST, Chandigarh v. Gurudev Sales Corporation”.

¶ 2

02Issues

i.Whether the value of goods invoiced during the refund period may be included in the “turnover of zero-rated supply of goods” under Rule 89(4) of the CGST Rules when those goods were exported after that period.

¶ 4, 8–10

ii.Whether the Department’s appeal should succeed on the ground that the three shipping bills were dated after the relevant refund period.

¶ 4, 8–11

03Law Applied

Section 54 of the CGST Act, 2017, read with Rule 89(4) of the CGST Rules, provides for refund of accumulated ITC on zero-rated supplies made without payment of tax; Rule 89(4) calculates the refund by reference to Net ITC, turnover of zero-rated supplies and adjusted total turnover for the relevant period.

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“Zero-rated supply” is defined by Section 2(23) of the IGST Act by reference to Section 16, which includes exports; “export of goods” under Section 2(5) means taking goods out of India.

¶ 7

Sections 12 and 31 of the CGST Act govern time of supply and the issue of invoices for goods, requiring an invoice before or at removal where the supply involves movement of goods.

¶ 7

Applying its earlier decision in Shruti Bansal v. Solitaire Pharmacia Pvt. Ltd., 2026 (9) TMI 2054, the Tribunal held that invoices issued during the relevant period for goods cleared for export may be included in that period’s zero-rated turnover, even if export occurs later; refund is payable only once actual export is established.

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Provisions in the judgment · 7 · Linked ones open on LawLens

Central Goods and Services Tax Act, 2017 Section 112 Section 54 Section 2 Section 12 Section 31

Integrated Goods and Services Tax Act, 2017 Section 2 Section 16

04Reasoning

The Tribunal found that the invoices relating to the three shipping bills were prepared during the refund period and that the goods had in fact been exported; neither fact was disputed.

¶ 10

Following its earlier decision, it treated the invoice period—not the later date of export—as determinative of whether the goods’ value could be included in the relevant period’s zero-rated turnover.

¶ 8–10

Since actual export had also been established, the Department’s contention that the shipping bills fell outside the refund period did not justify excluding their value.

¶ 8–10