HC Issues Notice to Examine DHL’s Refund Claim Based on Retrospective GST Circular.
Issue
Whether a CBIC circular (dated October 27, 2023) clarifying the Place of Supply for courier services has retrospective effect, thereby entitling an assessee to a refund of GST paid for a prior period (2017-2023) under a “mistake of law,” as per Article 265 of the Constitution.
Facts
DHL Express (India) is seeking a refund of ₹39.46 crore in GST paid between July 2017 and March 2023.
The tax was paid on “unbilled shipments,” which are domestic courier services performed by DHL India for its foreign group affiliates without a separate charge.
DHL initially paid this GST under the belief that the place of supply was in India, as per Section 13(3)(a) of the IGST Act (location of performance of service).
A new CBIC circular (Oct 2023) clarified that the place of supply for such services follows the general rule, Section 13(2), making the location of the recipient (the foreign affiliate) the place of supply.
DHL argues this clarification is retrospective, meaning the service was always an “export of service” (as the recipient was outside India) and was never taxable.
DHL contends the tax was paid under a “mistake of law,” was not passed on, and its retention by the government violates Articles 265 (no tax without authority of law) and 300A (right to property).
Decision
The Karnataka High Court has issued a notice to the Revenue (Union of India & Ors.) to respond to the writ petition.
The court has admitted the matter for consideration and fixed a preliminary hearing date for December 3, 2025.
No final judgment has been delivered, and no interim stay has been reported in this summary. The matter is currently sub judice.
Key Takeaways
Retrospectivity of Circulars: The case will test whether a CBIC circular that “clarifies” a legal provision can be applied retrospectively, enabling taxpayers to claim refunds for past periods where they followed a different, incorrect interpretation.
“Mistake of Law” Refunds (Article 265): The petition’s foundation is Article 265. A “mistake of law” claim is a constitutional remedy that, if successful, can bypass the standard one-year time limit for GST refunds.
Place of Supply in Focus: The outcome will have significant implications for the courier and logistics industry, particularly regarding the correct place of supply for services rendered as part of an international, inter-affiliate transaction.