QUESTION
1. This is a case of a private limited company based at noida. 2.The company is doing the business of IT enabled service for last many years, both internationally and domestically. 3.The company generally receives advance from its customer in USA and at the end of the month, it raises bill for services rendered. 4. The total advance received in the month of July 2017 was Rs.49,62,231.00 and the value of the sale Bill raised for the month of July was Rs.38,38,117.00. Thus, there was an excess of advance received in the month of July 2017 of Rs.11,24,114.00. (The company deposited GST on all amount of Rs.49,62,231.00 as advance received which included the sale bill of Rs.38,38,117.00) 5. The company has applied for refund of IGST paid for the month of July 2017 in Noida office. 6. However, the department has declined to issue refund and issued RFD-08 notice for rejection of refund by invoking the provision of Rule-96.As per that rule i.e. rule-96 covers of refund for Goods only for the month of July 2017 and refund of services were added only in Dec.2017 vide Notification No.75/2017 w.e.f.23.10.2017. kindly resolve the above mentioned issue.

ANSWER

As per the Explanation to Section 54 definition of 'refund' includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3).

Rule 96 of CGST Rules only prescribes the procedure of refund. Further Rules cannot override the section, therefore department is not right in rejecting the refund merely by invoking the provision of Rule-96 that refund of services were added only in Dec.2017 vide Notification No.75/2017 w.e.f.23.10.2017.

Just because of addition of word 'services' in the procedure on later date, refund of IGST paid on export of services prior to October cannot be denied.