SC Backs Clause that Allowed Exporters to Claim Credit

The Supreme Court on Friday (28.04.2023) upheld the validity of mandatory fulfilment of a “pre-import condition” that allowed exporters to claim credit of raw materials bought before actually exporting the product.

It set aside the Gujarat High Court’s ruling that held that such fulfilment in order to claim exemption of Integrated Goods and Services Tax (IGST) and GST compensation cess on input imported for the production of goods to be exported on the strength of an advance authorisation (AA) was arbitrary and unreasonable. The scheme was incorporated in the Foreign Trade Policy.