{"id":358,"date":"2020-12-16T06:31:28","date_gmt":"2020-12-16T06:31:28","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=358"},"modified":"2021-03-17T12:51:57","modified_gmt":"2021-03-17T12:51:57","slug":"gst-department-cannot-block-import-export-code-bombay-hc","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/gst-department-cannot-block-import-export-code-bombay-hc\/","title":{"rendered":"GST Department Cannot Block Import Export Code: Bombay HC"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Recently, the division bench of Justice\nUjjal Bhuyan and Abhay Ahuja of the Bombay High Court held that the suspension\nor cancellation of the Importer Exporter Code can only be done by DGFT or Director\nGeneral of Foreign Trade under Foreign Trade (Development and Regulation) Act\n1992. That means the GST Department cannot block Import Export Code.<\/p>\n\n\n\n<p>In this blog, we will discuss about the\nruling that GST Department cannot block Import Export Code.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a54cb2ae83c1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a54cb2ae83c1\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/gst-department-cannot-block-import-export-code-bombay-hc\/#Concept_of_Import_Export_Code\" title=\"Concept of Import Export Code\">Concept of Import Export Code<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/gst-department-cannot-block-import-export-code-bombay-hc\/#Facts_of_the_Case\" title=\"Facts of the Case\">Facts of the Case<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/gst-department-cannot-block-import-export-code-bombay-hc\/#Contentions_from_Respondent_Side\" title=\"Contentions from Respondent Side\">Contentions from Respondent Side<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/gst-department-cannot-block-import-export-code-bombay-hc\/#Section_Invoked_by_GST_Department\" title=\"Section Invoked by GST Department\">Section Invoked by GST Department<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/gst-department-cannot-block-import-export-code-bombay-hc\/#Concept_of_Input_Tax_Credit\" title=\"Concept of Input Tax Credit\">Concept of Input Tax Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/gst-department-cannot-block-import-export-code-bombay-hc\/#Rulings_of_the_Court\" title=\"Rulings of the Court\">Rulings of the Court<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/gst-department-cannot-block-import-export-code-bombay-hc\/#Copy_of_the_Judgment_passed_by_the_Honble_Bombay_High_Court\" title=\"Copy of the Judgment passed by the Hon&#8217;ble Bombay High Court\">Copy of the Judgment passed by the Hon&#8217;ble Bombay High Court<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Import_Export_Code\"><\/span>Concept of Import Export Code<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The term Import Export Code or IEC denotes a ten digits unique identification number given to the individual who wants to start business operations at the global level. That means obtaining <strong><a href=\"https:\/\/swaritadvisors.com\/iec-registration\" class=\"text-primary\">IEC Registration<\/a><\/strong> is a must requirement for dealing in the import and export of goods.<\/p>\n\n\n\n<p>Further, only the Director General of Foreign Trade has the authority to issue IEC in India. Also, it shall be considerate to mention that this code has lifetime validity and does not require any renewal.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Facts_of_the_Case\"><\/span>Facts of the Case<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The petitioner, Mr Siddharth Mandavia, is the Proprietor of the Sole Proprietorship Firm, named M\/s XS Components, which deals with the business of import and export of several products, such as Footwear, Garments, Leather Accessories, etc. Also, the petitioner holds IEC (Import Export Code) with him.<\/p>\n\n\n\n<p>However, the IEC of the petitioner was suspended and\nblocked by the respondent, i.e., the Goods and Service Tax Department. Further,\ndue to the continuous blockage of the IE Code, the petitioner was not able to\nreceive drawback incentive up to Rs 851374, IGST (Integrated Goods and Service\nTax) Refund of Rs 5800601, and MEIS (Merchandise Export Incentive Scheme)\nRefund of Rs 4598702. <\/p>\n\n\n\n<p>As a result, the petitioner had lost many of his\noverseas buyers and export orders. Therefore, the petitioner prayed before the\nHon\u2019ble High Court to direct the GST Department, i.e., respondent, to unblock\nIEC, together with other directions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Contentions_from_Respondent_Side\"><\/span>Contentions from Respondent Side<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The GST\ndepartment alleged that the exporter was seeking to obtain an \u201cineligible\nreturn\u201d and was seeking to \u201cdefraud\u201d the federal government as well. Therefore,\nthe tax department started checking the account and blocked the IEC code.<\/p>\n\n\n\n<p>Further, the GST department contended that it had found a lot of discrepancies in the entry of the tax credit score as well.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Section_Invoked_by_GST_Department\"><\/span>Section Invoked by GST Department<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The GST or Goods or Service Tax\nDepartment had invoked the selected part of section 86A of the CGST Act.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Input_Tax_Credit\"><\/span>Concept of Input Tax Credit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The term \u201cInput Tax Credit\u201d denotes a\nsituation wherein the taxpayer can reduce the amount already paid on inputs at\nthe time of paying tax on outputs and pay the remaining amount.<\/p>\n\n\n\n<p>Further, the condition applicable to the\nclaim of ITC are as follows:<\/p>\n\n\n\n<ol><li>Dealer\nneeds to be in possession of the Tax Invoice;<\/li><li>Goods\nand Services have been received;<\/li><li>Returns\nhave been filed on a timely basis;<\/li><li>Suppliers\nhave paid the taxes to the government;<\/li><\/ol>\n\n\n\n<p>Therefore, Input Tax Credit\nor ITC is primarily a part of the tax paid by the taxpayer that can be utilised\nto set off future tax legal responsibilities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rulings_of_the_Court\"><\/span>Rulings of the Court<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The division bench of the <strong>Bombay High Court<sup><a class=\"text-primary\" href=\"https:\/\/bombayhighcourt.nic.in\/\"><strong><em>[1]<\/em><\/strong><\/a><\/sup><\/strong> held that the blocking of the Import Export Code by the <strong><a class=\"text-primary\" href=\"https:\/\/swaritadvisors.com\/gst-registration\">GST<\/a><\/strong> Department is illegal and invalid, and only the DGFT or the Director-General of Foreign Trade has the power to revoke, suspend, and cancel the IEC issued. Further, the same can only be done under the provisions of the Foreign Trade (Development and Regulation) Act 1992.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Copy_of_the_Judgment_passed_by_the_Honble_Bombay_High_Court\"><\/span>Copy of the Judgment passed by the Hon&#8217;ble Bombay High Court<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<a href=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2020\/12\/F256000029012020_5.pdf\" class=\"pdfemb-viewer\" style=\"\" data-width=\"max\" data-height=\"max\"  data-toolbar=\"bottom\" data-toolbar-fixed=\"off\">F256000029012020_5<br\/><\/a>\n<p class=\"wp-block-pdfemb-pdf-embedder-viewer\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recently, the division bench of Justice Ujjal Bhuyan and Abhay Ahuja of the Bombay High Court held that the suspension or cancellation of the Importer Exporter Code can only be done by DGFT or Director General of Foreign Trade under Foreign Trade (Development and Regulation) Act 1992. That means the GST Department cannot block Import [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":360,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[39,40,50],"tags":[99],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/358"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=358"}],"version-history":[{"count":7,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/358\/revisions"}],"predecessor-version":[{"id":3426,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/358\/revisions\/3426"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/360"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}