Customs Authority Must Process IGST Refund on Goods Exported via Manual Shipping Bill

By | November 4, 2026
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Customs Authority Must Process IGST Refund on Goods Exported via Manual Shipping Bill

Issue

Whether the Customs Department possesses jurisdiction under Rule 96 of the CGST/TNGST Rules to process and sanction an IGST refund on exported goods regularized via a manual shipping bill when valid GSTR-3B details have been filed on the common portal.

Facts

  • Export Operations: The petitioner, an exporter of AC generators, paid IGST on exports made on March 14, 2019.
  • ICEGATE System Issue: Due to technical glitches on the ICEGATE portal, the shipping bill could not be registered electronically; consequently, a manual “Let Export Order” (LEO) was issued, and the export was regularized manually.
  • Rejection by Customs: The petitioner applied for an IGST refund before the second respondent (Customs). The Customs authority declined to process the refund and directed the petitioner to approach the jurisdictional GST authority instead.
  • Jurisdictional Deadlock: Customs subsequently requested the fourth respondent (GST Department) to process the claim, but the GST authority expressed a lack of jurisdiction, noting that Form GSTR-3B had already been filed on the common portal.
  • Writ Filed: The petitioner approached the High Court seeking a writ to resolve the jurisdictional impasse and obtain the IGST refund with applicable interest.

Decision

  • Customs Responsibility Under Rule 96: Under the statutory scheme governing IGST refunds on goods exported, the authority to process refunds rests strictly with the Customs automated system or the proper officer of Customs upon receipt of valid GSTR-3B details from the common portal. (Para 9)
  • Improper Referral: Held, the Customs authority could not decline jurisdiction or direct the exporter to the GST Department once manual export regularization and GSTR-3B filings were complete. (Para 9)
  • Sanction and Interest: The Customs Department was directed to process the IGST refund claim and grant the admissible refund along with statutory interest. (Para 10) (In favour of assessee)

Key Takeaways

  • Exclusive Jurisdiction of Customs for IGST Export Refunds: Under Rule 96, processing IGST refunds on the export of goods falls squarely under the jurisdiction of the Customs Department, even if exports were regularized manually due to technical system failures.
  • Interoperability of Manual Regularization & Portal Filings: Technical portal failures requiring manual LEO/shipping bills do not divest an exporter of statutory refund entitlements provided Form GSTR-3B is properly filed.
HIGH COURT OF MADRAS
TD Power Systems Ltd.
v.
Commissioner of Customs
Hemant Chandangoudar, J.
WP No. 7941 of 2025
SEPTEMBER  30, 2026
Derrick Sam for the Petitioner. M. Santhanaraman and S.M. Deenadayalan, Senior Standing Counsels for the Respondent.
ORDER
1. The petitioner has approached this Court seeking a direction to the respondents, particularly the second respondent, to sanction the refund of Integrated Goods and Services Tax (IGST) in respect of Manual Shipping Bill No.117972 dated 14.03.2019, along with applicable interest.
2. The petitioner states that, in the course of its business, it filed Shipping Bill No.9009011 dated 29.09.2017 for the export of AC generators, with a free- on-board (FOB) value of Rs.10,16,44,025.99/-. The goods were examined by the Customs officers, and a Let Export Order was issued on 29.09.2017. However, due to technical issues with the ICEGATE software, the Let Export Order could not be registered against the shipping bill. As the petitioner was under pressure from its buyers to dispatch the consignment, it requested the first respondent to issue a manual Let Export Order. The request was accepted, and the consignment was shipped on 04.10.2017.
3. The petitioner claims that it is entitled to the refund of IGST and to the applicable drawback and Merchandise Exports from India Scheme (MEIS) benefits. The petitioner submitted a representation to the second respondent seeking a refund of IGST on the basis of the manual shipping bill. However, the second respondent declined to process the claim, stating that the petitioner should approach the fourth respondent, the GST Department. Aggrieved by the failure to process the refund claim, the petitioner has filed this writ petition.
4. Heard the learned counsel appearing for the parties.
5. There is no dispute that the Let Export Order could not be registered against the shipping bill due to technical issues with the ICEGATE software and that the Customs Department subsequently regularised the export through the manual shipping bill. The petitioner, therefore, submitted a representation to the second respondent seeking a refund of the IGST paid on the exported goods.
6. By letter dated 07.06.2024, the second respondent requested the fourth respondent to process the petitioner’s IGST refund claim on the basis of the manual shipping bill. In response, the fourth respondent, by communication dated 10.07.2024, stated that, under Section 54 of the Central Goods and Services Tax Act, 2017, and the Rules made thereunder, the GST Department had no jurisdiction to sanction a refund of IGST paid on exported goods, whether the claim was made online or manually.
7. In its counter-affidavit, the Customs Department stated that the petitioner had submitted an application dated 10.04.2024 seeking a refund of IGST in respect of the shipping bill. It further stated that, under CBIC Circular No.17/17/2017-GST, manual refund claims relating to zero-rated supplies were required to be submitted to the jurisdictional GST authority in Form GST RFD-01A. The petitioner’s complaint was closed on 22.04.2024, on the ground that the claim relating to the manual shipping bill fell within the jurisdiction of the GST Department.
8. Rule 96 of the Central Goods and Services Tax Rules, 2017, deals with the refund of IGST paid on goods exported out of India. Under sub-rule (3), upon receipt of information regarding the furnishing of a valid return in Form GSTR-3B from the common portal, the system designated by the Customs Department or the proper officer of Customs, as the case may be, shall process the refund claim relating to the export of goods. The amount of IGST paid in respect of each shipping bill or bill of export is then to be electronically credited to the applicant’s registered bank account, subject to the applicable conditions. In the present case, the petitioner has furnished Form GSTR-3B to the fourth respondent, as acknowledged in the communication dated 10.07.2024 addressed to the second respondent.
9. A reading of Rule 96(3) makes it clear that the processing of an IGST refund claim relating to exported goods falls within the domain of the Customs system or the proper officer of Customs, as the case may be. The fourth respondent has also stated that the GST Department has no jurisdiction to sanction the refund claimed in the present case. In these circumstances, the second respondent cannot reject the petitioner’s claim merely on the ground that it falls within the jurisdiction of the GST Department. The second respondent is, therefore, required to process the petitioner’s claim in accordance with Rule 96 of the CGST Rules, 2017, and the other applicable provisions of law.
10. Accordingly, the writ petition is allowed. The second respondent is directed to process the petitioner’s claim for refund of IGST in respect of Manual Shipping Bill No. 117972 dated 14.03.2019 and sanction the admissible refund, along with applicable interest, in accordance with law. The exercise shall be completed within a period of four weeks from the date of receipt of a copy of this order. There shall be no order as to costs.