09.08.2022: Companies seek refund after High Court reaffirms Advance Authorisation benefit

Several companies that were under scrutiny by the government for availing duty-free benefits granted through advance authorisation scheme are all set to approach the taxman for refunds following a court direction.

The Delhi High Court recently dismissed the government's review petition on an earlier order that had said that these benefits shouldn't be curtailed.

The government had filed a review petition on an earlier order to extend the benefit of Advance Authorisation Licences from July 1, 2017 till October 12, 2017 that is till the time IGST exemption was officially notified by the government.

Companies take licences to avail certain benefits of government schemes such as Advance Authorisation and Export Promotion for Capital Goods, among others. In most cases, the tax department is seeking that exporters and the companies cough up the GST on the licence amount paid to the government.

The government was giving the benefits before the GST was introduced in 2017. However, after GST was introduced, exporters no longer got complete exemptions on imports. This meant that the exemption was not available against IGST paid when goods were imported.

Many companies had approached the Delhi High Court in this regard. The court extended the benefits of upfront duty exemptions on import of goods under the licence to IGST as well.

Source: The Economic Times 

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