The Hon’ble Delhi High Court in the case of Transformative Learning Solutions Pvt. Ltd. v. Commissioner, CGST Delhi East & Anr. [W.P.(C) 4987/2025 & CM APPL. 22937/2025, order dated September 24, 2025] held that foreign exchange realization certificates (FIRCs) submitted by exporters need not match invoice-wise or transaction-wise, and that periodic remittance supported by total benefit claimed is sufficient for GST refund.
Facts:
Transformative Learning Solutions Pvt. Ltd. (‘the Petitioner’), engaged in export of Ayurvedic cosmetic goods, was audited by CGST authorities for 2017-18 to 2021-22.
The Commissioner, CGST Delhi East (‘the Respondent’), raised demand and appropriated reversed Input Tax Credit after alleging that Petitioner failed to provide invoice-wise proof of foreign remittance. The Respondent rejected lump-sum ITC credits from Petitioner’s foreign branch, saying these did not match individual invoices.
The Petitioner contended that it had consistently submitted all required documents such as the export proof, FIRCs, BRCs, and that refunds had been sanctioned by the Department throughout the audit period. It argued the impugned order ignored submitted documents and gave only vague reasoning on reconciliation.
The Respondent contended that repeated notices and show cause process were followed, that Petitioner failed to discharge demands, and that large numbers of invoices could not be reconciled with periodic remittances.
Aggrieved by summary rejection and blanket refusal GST refund, the Petitioner approached the Court under Article 226, challenging both the demand and ITC reversal order.
Issue:
Whether GST authorities can require exporters to provide transaction-wise or invoice-wise matching FIRCs/ BRCs for refund of GST, and whether periodic remittance covering total claimed benefit suffices for statutory compliance?
Held:
The Hon’ble Delhi High Court in W.P.(C) 4987/2025 held as under:
- Observed that, the impugned rejection order was vague and did not properly consider the documents on file, including evidence of foreign remittance.
- Noted that, FIRCs need not be correlated transaction-wise or invoice-wise. Periodic FIRC receipts are permitted if in total they support the refund claimed.
- Directed the GST authorities to issue a fresh personal hearing notice, allow a complete opportunity for Petitioner to present its documents, and adjudicate the Show Cause Notice afresh without pre-conceived notion.
- Set aside the prior demand and refund rejection and directed a reasoned order after personal hearing and full document consideration.
Our Comments:
The ruling is similar with the ratio the judgment of Hon’ble Supreme Court in the case of Union of India Versus Mangal Textile Mills Private Limited [2011 (269) E.L.T. 3 (S.C.)] wherein it was held that The Certificate issued by the CA is required to be considered by the Authority as an authentic document. When the CA has issued the Certificate, the respondent-Authorities are bound to take into consideration the same. As per the certificate, the petitioner has received the convertible foreign exchange for the export of the services. Therefore, only on the ground that the petitioner has not submitted the FIRC as required by the Circular No. 125/44/2019 issued by the CBIC, the respondent Authorities were not justified in rejecting the refund claim.
Relevant Provisions:
Section 54, CGST Act, 2017:
“54. Refund of tax.-
(1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed:
Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in such form and manner as may be prescribed.
(2) A specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of two years from the last day of the quarter in which such supply was received.
(3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period:”
Rule 89(2)(c), CGST Rules, 2017
“(2) The application under sub-rule (1) shall be accompanied by any of the following documentary evidences in Annexure 1 in FORM GST RFD-01, as applicable, to establish that a refund is due to the applicant, namely:-
….
(bb) a statement containing the number and date of export invoices along with copy of such invoices, the number and date of shipping bills or bills of export along with copy of such shipping bills or bills of export, the number and date of Bank Realisation Certificate or foreign inward remittance certificate in respect of such shipping bills or bills of export along with copy of such Bank Realisation Certificate or foreign inward remittance certificate issued by Authorised Dealer-I Bank, the details of refund already sanctioned under sub-rule (3) of rule 96, the number and date of relevant supplementary invoices or debit notes issued subsequent to the upward revision in prices along with copy of such supplementary invoices or debit notes, the details of payment of additional amount of integrated tax, in respect of which such refund is claimed, along with proof of payment of such additional amount of integrated tax and interest paid thereon, the number and date of foreign inward remittance certificate issued by Authorised Dealer-I Bank in respect of additional foreign exchange remittance received in respect of upward revision in price of exports along with copy of such foreign inward remittance certificate, along with a certificate issued by a practicing chartered accountant or a cost accountant to the effect that the said additional foreign exchange remittance is on account of such upward revision in price of the goods subsequent to exports and copy of contractor other documents, as applicable, indicating requirement for the revision in price of exported goods and the price revision thereof, in a case where the refund is on account of upward revision in price of such goods subsequent to exports;
….
(c) a statement containing the number and date of invoices and the relevant Bank Realisation Certificates or Foreign Inward Remittance Certificates, as the case may be, in a case where the refund is on account of the export of services;”
Circular No. 125/44/2019 dated November 18, 2019
“4. The following modalities shall be followed for all refund applications filed in FORM GST RFD-01 on the common portal with effect from 26.09.2019:
a. FORM GST RFD-01 shall be filled on the common portal by an applicant seeking a refund under any of the categories mentioned above. This shall entail filing of statements/ declarations/ undertakings which are part of FORM GST RFD-01 itself, and also uploading of other documents/invoices which shall be required to be provided by the applicant for processing of the refund claim. A comprehensive list of such documents is provided at Annexure-A, and it is clarified that no other document needs to be provided by the applicant at the stage of filing the refund application. The facility of uploading these other documents/invoices shall be available on the common portal, where four documents, each of a maximum of SMB, may be uploaded along with the refund application. Neither the refund application in FORM GST RFD-01 nor any of the supporting documents shall be required to be physically submitted to the office of the jurisdictional proper officer.”
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