NEW DELHI: In a major development for Indian importers, the Gujarat High Court has reviewed and amended its earlier decision in the Cosmo Films vs. Union of India case.
This move comes in response to concerns about the application of a key rule related to the Goods and Services Tax (GST).
The Directorate of Revenue Intelligence (DRI) had been investigating Indian exporters, alleging they improperly benefited from both exemption on Integrated Goods and Services Tax (IGST) and a rebate
on exports. The central issue revolved around Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, which underwent major changes in 2018, leading to confusion over its application and prompting legal battles across the country. In its initial ruling, the Gujarat High Court upheld the constitutionality of Rule 96(10).
However, following a review petition filed by lawyer Abhishek A Rastogi, the court agreed to reconsider its decision. The review identified eight significant errors in the original judgment. In the
revised order, the court clarified that Notification No. 54/2018, which was initially interpreted to apply retrospectively, will now only be applied prospectively.
This change protects exporters from facing unfair charges related to past transactions. Additionally, the court corrected its earlier statements regarding interest on IGST, further relieving importers from potential liabilities. Recent changes made during the 54th GST Council meeting, which removed Rule 96(10), now enable importers to reassess their bills and rectify any previous import issues.
While this ruling brings positive news for Indian exporters, the ongoing debate regarding interest charges remains unresolved, and Rastogi has indicated plans to challenge the rule’s validity in the Supreme Court.