Legal action cannot be made illegal through a retrospective amendment

SME queries related to excise, VAT and exim policy answered

We are merchant exporters. We obtained inter-state supply of goods from supporting manufacturers at 0.1 per cent GST under notifications 41/2017-I.T.(Rate) dated October 23, 2017. Under similar notifications under Central and State GST, we have obtained intra-state supplies at the same rate (0.05 per cent+0.05 per cent). In November 2017 we exported such goods on payment of full IGST and claimed refund of the same. Now, the audit team is saying that due to retrospective amendment to Rule 96 (10) of the CGST Rules, 2017 effective from October 23, 2017, we are ineligible for the said refund and must therefore, surrender the refund claimed. Can we contest this and if so, on what basis?

Your export on payment of IGST under refund claim in November 2017 was fully in accordance with the law. The first restriction on doing so came on December 28, 2018, and it got retrospective effect on January 23, 2018. Your legal act in November 2017 cannot be made illegal through retrospective amendment in 2018. The Supreme Court, in the case of R.C. Tobacco Pvt. Ltd. [2005 (188) ELT 129 (SC)], has held that any unduly oppressive retrospective amendment can be struck down as unreasonable/unconstitutional. Such an amendment may operate with prospective effect as held in Uni Colloids Impex Pvt. Ltd. [2014 (310) E.L.T. 583 (Tri.)]. In your case, an additional ground is that exports are anyway zero-rated and therefore revenue neutral.

I am referring to the reply to a query which appeared in SME Chatroom on September 12, 2017, regarding import of stainless steel coils from Malaysia under the Asean Free Trade Agreement. The form “A” prescribed does not ask for the name of the manufacturer and in fact there is no column to show the manufacturer’s name in form “A”. I could not trace any provision in notification No. 189/2009 custom (N.T.) which requires the name of the  manufacturer to be specified in form “A”. Please advise. 

Please see Note no. 5 in the said notification 189/2009, which says, “the description of goods must be sufficiently detailed to enable the goods to be identified by the Customs Officers examining them. Name of manufacturer, any trade mark shall also be specified”. 

We are a health care service provider and are eligible for SEIS entitlements. Our claim for FY 2017-18 included the following transactions: (i) Services rendered 2017-18: Foreign exchange in relation to such services received only in 2018-19; (ii) Advances received in 2016-17 from foreign consumers but services rendered in 2017-18. JDGFT has rejected our claim from the above transactions. Is the rejection justified?

As per Para 3.10 of FTP, “Service Providers of eligible services shall be entitled to Duty Credit Scrip at notified rates (as given in Appendix 3D) on net foreign exchange earned”. The Net 

Foreign Exchange for the scheme is defined in Para 3.08 (d) of the FTP. From a reading of the said provisions, my opinion is that both conditions — rendering service in 2017-18 and realisation of foreign exchange — are fulfilled in your case.

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