Relief for Exporters Claiming IGST Refunds Backdated to October 2017
Exporters blocked from claiming IGST refunds due to Rule 96(10) can now get relief backdated to October 2017.
- Document
- Circulars CGST 264/10/2026-GST
- Dated
- 26 Oct 2026
- Effective
- Omission effective 08.10.2024; the circular states it is effective retrospectively from 23.10.2017.
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Rule 96(10) restriction is officially cancelled back to 23 October 2017.
- Supreme Court ruled the removal applies to all pending tax disputes.
- Exporters denied integrated tax refunds can now resolve pending cases.
- The same retrospective relief applies to omitted Rules 89(4A) and 89(4B).
In short
Circular No. 264/10/2026-GST clarifies that the deletion of Rule 96(10) under GST applies retrospectively from 23 October 2017. The government had removed the rule in October 2024, but tax offices were unsure if older cases benefited. Following a Supreme Court ruling in the Goodluck India case, tax officers must now drop pending disputes over these blocked export refunds.
What has changed
How it worked before
Under Rule 96(10), if you imported or bought raw materials without paying tax under duty exemption schemes, you were barred from exporting finished goods with tax payment and claiming an Integrated Goods and Services Tax (IGST) refund. The government removed this rule on 8 October 2024, but only on paper going forward. Exporters with pending notices or audits for earlier years were still facing demands to repay their refunds with interest.
What has changed
The deletion of Rule 96(10) now legally applies all the way back to 23 October 2017, the date the restriction was originally created. Tax officers must handle all pending disputes and proceedings according to this retroactive cancellation. Identical treatment applies to omitted Rules 89(4A) and 89(4B), which had similar restrictions on export refund calculations.
Who this affects
Exporters who imported or bought inputs under tax-free schemes (such as Advance Authorisation) and claimed IGST refunds on their exports between 23 October 2017 and 7 October 2024.
An example
An engineering firm imported steel without customs duty under an Advance Authorisation license in 2021 and exported finished machinery after paying IGST, later claiming a refund of that tax. The GST department issued a demand notice in 2023 under Rule 96(10), asking the firm to return the ₹15 lakh refund with interest. With this circular, the firm can show the tax officer that Rule 96(10) is treated as never having applied, allowing the department to drop the demand.
What you should do
Review any pending GST audit inquiries, show cause notices, or appeals concerning Rule 96(10) or Rules 89(4A) and 89(4B). Submit a copy of this circular and the Supreme Court decision to your tax officer or appellate authority to request that the demand be dropped.
If you do nothing
If you have an open tax dispute or notice and say nothing, the tax officer might confirm the demand against you by mistake. While the law is now firmly on your side, bringing this circular to the officer's attention is necessary to close out the case.
The terms explained
- Rule 96(10)
- A GST rule that stopped exporters who bought tax-free raw materials from getting export tax refunds.
- IGST refund
- Integrated GST repaid by the government when goods are sold to overseas buyers.
- Advance Authorisation
- A government scheme allowing businesses to import raw materials without paying customs duties for export production.
- Mutatis mutandis
- A legal phrase meaning the same rule applies with necessary small changes.
The original document
| Issued by | GST |
|---|---|
| Document | Circulars CGST 264/10/2026-GST |
| Full title | Clarification in respect of the omission of rule 96(10) of the Central Goods and Services Tax Rules, 2017. |
| Issued on | 26 October 2026 |
| Effective | Omission effective 08.10.2024; the circular states it is effective retrospectively from 23.10.2017. |
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