This circular provides clarification regarding the regularization of IGST refunds on exports where exporters had imported inputs without payment of IGST and compensation cess by availing exemptions under Notification No. 78/2017-Customs or 79/2017-Customs, both dated 13th October 2017.

It explains that as per the Explanation inserted in Rule 96(10) by Notification No. 16/2020-CT dated 23rd March 2020 (retrospectively effective from 23rd October 2017), if IGST and compensation cess on imported inputs are subsequently paid along with interest and the Bill of Entry is reassessed by Customs authorities, it will be deemed that the benefit of exemption was not availed for the purpose of Rule 96(10).

Therefore, in such cases, refund of IGST paid on export of goods will not be treated as in contravention of the said rule, ensuring exporters’ refunds remain valid upon compliance.