QUESTION

Recovery procedure of erroneous refund of IGST paid on export goods sanctioned by the system. Whether customs section 28 is to be invoked or recovery is to be made under CGST act/rules and by which formation?

ANSWER

Facts of the case:
Erroneous refund of IGST paid on export of goods granted.

Law Applicable: Customs Act 1962 Section 28
28. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded '

(1) Where any duty has not been levied or not paid or has been short-levied or short- paid or erroneously refunded, or any interest payable has not been paid, part-paid or erroneously refunded, for any reason other than the reasons of collusion or any willful miss-statement or suppression of facts.

CGST RULE 96

RULE 96. Refund of integrated tax paid on goods or services exported out of India

(1) The shipping bill filed by an exporter of goods shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when:-

(a) the person in charge of the conveyance carrying the export goods duly files a departure manifest or an export manifest or an export report covering the number and the date of shipping bills or bills of export; and
(b) the applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR-3B

Interpretation:
Tax on export of goods i.e. IGST is paid in terms of provisions of GST. Section 28 of Customs Act relates to Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded as per the provisions of Customs Act.

In case of export Custom is only acting as a conduit. Therefore if tax is charged and refund is granted as per provisions of GST, then for recovery proceedings in case of erroneous refund, provisions of GST will be applicable.

Conclusion:
Provisions of GST will be applicable for recovery proceedings of erroneous refund of IGST paid on export goods.