2019-VIL-504-AP
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SGST High Court Cases

GST - Section 54(3) of the CGST Act, 2017 - Rule 89(4) of CGST Rules, 2017 - Refund of unutilized ITC of Compensation Cess in respect of zero-rated supply – Prospective effect of substantive amendment in Rule 89(4) vide Notification No. 14/2022 - Central Tax dated 05.07.2022 – Whether the amendment in Rule 89(4) vide Notification No. 14/2022 - Central Tax dated 05.07.2022 inserting explanation stipulating comparison of the value in tax invoice with only the FOB value is retrospective or prospective in nature – HELD - Amendment in Rule 89(4) vide Notification No. 14/2022-Central Tax dated 05.07.2022 inserts a new stipulation for comparison between two values. Such an exercise was not contemplated prior to the amendment as what was taken into account was the actual transaction value. Therefore, by way of the amendment, a substantive change has been brought about in the law and therefore the amendment ought to operate prospectively - Further, mere use of the term “explanation” will not be indicative of the fact that the amendment is clarificatory or declaratory. While para 47 of the Circular No. 125/44/2019-GST dated 18.11.2019 contemplates comparison of the value of export in the tax invoice and in the shipping bill, i.e., the export document (which can either be FOB or CIF value), the Explanation requires comparison of the value in tax invoice with only the FOB value. Thus, the explanation cannot be said to be on similar lines as Para 47. A policy can be changed only by way of an amendment under the parent Act and not by a circular and the policy change will be effective from the date of the amendment - the legislature expressly indicated the date of application of respective rules and for Rule 89 (4), no retrospective date has been indicated in the notification itself – the amendment to Rule 89(4) of CGST Rules, 2017 vide Notification No. 14/2022-Central Tax dated 05.07.2022 is not clarificatory in nature and thus will have a prospective effect - In all these writ applications since the period involved is prior to the amendment, as such, the respective impugned orders are quashed and set aside – the writ applications are allowed
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