IGST Refund Subject to Deduction of Higher Drawback

Case Details: Kunal Housewares (P.) Ltd. vs. Union of India [2026] 185 taxmann.com 541 (Bombay)

Judiciary and Counsel Details

G. S. Kulkarni & Firdosh P. Pooniwalla, JJ.
Devashish K. Trivedi & Garvit Khandelwal, Advs. for the Petitioner.
Jitendra B. Mishra, Ashutosh Mishra, Maya Majumdar & Rupesh Dubey, Advs. for the Respondent.

Facts of the Case

The petitioner engaged in the export of various stainless steel items, effected zero-rated supplies and paid IGST on such exports. The petitioner thereafter sought refund of the IGST so paid under the zero-rated export mechanism. The jurisdictional officers under CGST withheld the refund on the ground that the petitioner had already availed a higher duty drawback by selecting ‘Column A’ in the shipping bills, thereby rendering the claim ineligible for a full IGST refund. The petitioner contended that it was entitled to a refund of IGST notwithstanding the drawback option exercised and disputed the withholding of the amount. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that IGST refund on zero-rated exports cannot be granted in a manner that results in impermissible double benefit when the higher duty drawback has already been availed. It was observed that under Section 54 of the CGST Act and the Maharashtra GST Act, Section 16 of the IGST Act and Rule 96 of the CGST Rules, a refund is admissible only where the rates under Column A and Column B of the shipping bills are identical or where the excess drawback component is neutralised. The Court reasoned that availing higher duty drawback while simultaneously claiming full IGST refund would amount to duplication of export incentives since pre-GST levies stand subsumed under the GST regime. It further held that the petitioner could not be granted the full refund unless the differential drawback was repaid or adjusted, and directed that the refund be allowed only after deducting the differential drawback amount along with 7% interest calculated from the date of the shipping bill.

List of Cases Reviewed

Awadkrupa Plastomech (P.) Ltd. v. Union of India [2021] 124 taxmann.com 615/46 GSTL 31 (Gujarat) (para 31)
Union of India v. Awadkrupa Plastomech (P.) Ltd. [2024] 168 taxmann.com 305 (SC) (para 31), followed

List of Cases Referred to

Kishan Lal Kuria Mal International v. Union of India [2022] 144 taxmann.com 107/[2023] 95 GST 177/[2022] 69 GSTL 51 (Delhi) (para 20)
TMA International (P.) Ltd. v. Union of India [2020] 113 taxmann.com 22/35 GSTL 22 (Delhi) (para 20)
R P Exim v. Principal Commissioner of Customs [2022] 145 taxmann.com 256/[2023] 96 GST 55/[2022] 69 GSTL 240 (Gujarat) (para 20)
Nilamel Exports v. Union of India 2019 (29) G.S.T.L. 692 (Kerala) (para 20)
Phoenix Contact India (P.) Ltd. v. Commissioner of Customs (Exports), New Delhi [2022] 141 taxmann.com 142/93 GST 293/64 GSTL 163 (Delhi) (para 20)
Gujarat Nippon International (P.) Ltd. v. Union of India [2022] 143 taxmann.com 85/64 GSTL 438/94 GST 881 (Delhi) (para 20)
Awadkrupa Plastomech (P.) Ltd. v. Union of India [2021] 124 taxmann.com 615/46 GSTL 31 (Gujarat) (para 20)
Amit Cotton Industries v. Principal Commissioner of Customs [2019] 107 taxmann.com 167/75 GST 33/29 GSTL 200 (Gujarat) (para 20)
Gujarat Nippon International (P.) Ltd. v. Union of India [2022] 140 taxmann.com 649/64 GSTL 45/93 GST 289 (Bombay) (para 20)
Sunlight Cable Industries v. Commissioner of Customs [2023] 152 taxmann.com 247/75 GSTL 574/99 GST 63 (Bombay) (para 20)
AIM Worldwide (P.) Ltd. v. Union of India [2022] 134 taxmann.com 231 (Gujarat) (para 20)
Vimla Food Products v. Union of India [Special Civil Application No. 16028 of 2020, dated 22-12-2021] (para 20)
Jaysons Exports v. Union of India [Special Civil Application No. 13157 of 2022, dated 19-10-2022] (para 20)
Principal Commissioner of Customs v. Amit Cotton Industries [2022] 136 taxmann.com 328 (SC) (para 20)
Union of India v. Awadkrupa Plastomech (P.) Ltd. [2024] 168 taxmann.com 305 (SC) (para 20)
G Nxt Power Corp. v. Union of India [2019] 109 taxmann.com 305/29 GSTL 616 (Kerala) (para 20)
Precot Meridian Ltd. v. Chief Commissioner of Customs [W. P. (C) No. 27772 of 2019 (V), dated 1-11-2019] (para 20)
Real Prince Spintex (P.) Ltd. v. Union of India [2020] 115 taxmann.com 314/35 GSTL 369 (Gujarat) (para 23)
Union of India v. Real Prince Spintex (P.) Ltd. [2024] 168 taxmann.com 307 (SC) (para 23).