Bombay High Court Judgment Favorable for Laxmi Organic on IGST Refund Eligibility for Exporters
The judgment provides finality on IGST refund eligibility and quashes show cause notices and orders related to a significant tax rule. This could lead to substantial financial benefits for the company by allowing previously barred refunds and resolving pending tax disputes, thus having a high impact on its financial position and operations.
The Bombay High Court's judgment is favorable for Laxmi Organic as it disposes of challenges to Rule 96(10) of CGST, which previously barred IGST refunds for exporters. By quashing show cause notices and orders, the ruling is expected to benefit the company regarding its IGST refund eligibility.
Laxmi Organic Industries Limited announced on 12 September 2025 that the Hon’ble Bombay High Court, via a judgment dated 11 September 2025, has disposed of a batch of writ petitions, including one filed by the company, challenging the validity of Rule 96(10) of the CGST Rules, 2017. This rule previously created a challenge for exporters to claim refunds (rebate) of Integrated Goods and Services Tax (IGST) paid on their final export products, even when using the Advance Authorisation Scheme for importing raw materials without paying IGST. * The Court acknowledged the omission or repeal of Rule 96(10) of the CGST Rules through a Notification dated 8 October 2024. * It held that all pending proceedings, such as undisposed show cause notices, orders disposing of show cause notices issued after 8 October 2024, or orders made before 8 October 2024 but not yet finalized, are not preserved and will stand lapsed. * Furthermore, the Court has quashed and set aside the impugned show cause notices and the impugned orders in original. * This judgment provides finality on the treatment of IGST refund eligibility, and the Company is reviewing the implications of the judgment on its operations and pending matters.
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