CBIC Finally Puts the Rule 96(10) Question in Writing — Two Months After the Supreme Court Settled It

A favourable Supreme Court ruling feels like the end of the story. For a taxpayer sitting across the table from a GST officer who hasn’t yet seen a departmental instruction to stop, it often isn’t. That is exactly the gap this circular closes — nearly three months after the Court itself ruled.

Sourcing note: verified directly from the circular PDF (A2Z Taxcorp’s mirror), cross-checked against Taxscan’s report of the same circular and ruling. The circular number, date and substance are confirmed from the primary-document text itself, not only secondary reporting.

By Circular No. 264/10/2026-GST (F. No. CBIC-20001/2/2026-GST, dated 26 October 2026, issued under Section 168(1) of the CGST Act), CBIC has clarified that the omission of Rule 96(10) of the CGST Rules — which had barred exporters from simultaneously claiming an IGST exemption on inputs and an IGST refund on exports — applies retrospectively from 23 October 2017, the date the rule itself originally came into force, not merely prospectively from 8 October 2024, when the omission was notified. The same retrospective treatment extends to the related Rules 89(4A) and 89(4B).

The circular is grounded in the Supreme Court’s 6 August 2026 ruling in Goodluck India Ltd. v. Union of India (SLP(C) No. 24550/2025), which applied the Constitution Bench’s reasoning in Kolhapur Canesugar Works Ltd. (2000) that Section 6 of the General Clauses Act, 1897 — which preserves pending proceedings on a repeal — does not apply to a rule’s omission absent an express saving clause. Since Rule 96(10) was omitted without such a clause, the circular now directs field officers that pending refund-denial and demand proceedings resting on Rule 96(10) do not survive.

Why It Matters

This closes a gap that otherwise sits entirely with the taxpayer: a favourable Supreme Court ruling does not, by itself, stop a field officer from continuing to press a demand or deny a refund on the same point until departmental instructions catch up. That gap had already run nearly three months — 6 August to 26 October — before this circular closed it. For any exporter with a live Rule 96(10) dispute, this circular is now the thing to cite to the officer directly, rather than relying on the Supreme Court order alone. The nearly three-month lag is also worth building into client advice as a general pattern, not a one-off: a favourable apex-court ruling on a procedural or rules point is necessary but not sufficient to get a field officer to actually stop a proceeding — the circular is the operative instrument for that, and its absence until now would have been a legitimate, if frustrating, basis for an officer to keep pressing a since-settled point.

Key Takeaways

• Rule 96(10)’s omission is now departmentally confirmed as retrospective from 23 October 2017 — not merely from 8 October 2024.
• Rules 89(4A) and 89(4B) receive the same retrospective treatment.
• Field officers are directed that pending refund-denial and demand proceedings on this ground do not survive.
• The circular rests on the Supreme Court’s application of Kolhapur Canesugar Works: an omission, unlike a repeal, is not automatically saved under Section 6 of the General Clauses Act absent an express saving clause.
• Nearly three months separated the Supreme Court’s ruling (6 August 2026) from this circular (26 October 2026) — the practical gap this article exists to flag.

Practical Implications

Exporters with any pending or past IGST refund denial or demand founded on Rule 96(10), 89(4A) or 89(4B) — across any assessment year since October 2017 — now have a departmental instrument, not just a court order, to cite. GST litigators currently relying on Goodluck India alone should update their submissions to reference this circular directly; field officers are more likely to act on an instruction from their own department than on a case citation, however authoritative.

Action Checklist

• Identify every client with a live or recently-closed Rule 96(10)/89(4A)/89(4B) dispute and cite Circular No. 264/10/2026-GST directly in any pending submission or follow-up with the officer.
• For refund claims denied on this ground before 8 October 2024, re-examine whether a fresh claim or rectification is now warranted given the confirmed 23 October 2017 retrospective date.
• Track whether field formations actually close out pending proceedings on this ground promptly, or whether a further round of litigation is needed to enforce the circular itself.

Relevant Sections, Rules & Notifications

CGST Rules, 2017 — Rule 96(10) (omitted), Rule 89(4A), Rule 89(4B) · CGST Act, 2017 — Section 168(1) · General Clauses Act, 1897 — Section 6 · Circular No. 264/10/2026-GST, F. No. CBIC-20001/2/2026-GST, dated 26 October 2026 · Supreme Court ruling in Goodluck India Ltd. v. Union of India, SLP(C) No. 24550/2025, dated 6 August 2026 · Kolhapur Canesugar Works Ltd. v. Union of India (2000) 2 SCC 536.

FAQs

From what date does the Rule 96(10) omission actually apply?
Retrospectively from 23 October 2017 — the date Rule 96(10) itself originally came into force — per Circular No. 264/10/2026-GST, not merely from 8 October 2024 when the omission was notified.

Can a field officer still press a Rule 96(10)-based demand after this circular?
The circular directs that pending refund-denial and demand proceedings on this ground do not survive. Any officer continuing to press such a proceeding after 26 October 2026 can now be shown the circular directly, rather than relying only on the Supreme Court ruling.

Does this circular affect Rules 89(4A) and 89(4B) as well?
Yes — the same retrospective treatment is extended to both.

This article is for general informational purposes only and does not constitute legal or professional advice. Readers with an active Rule 96(10)/89(4A)/89(4B) dispute should obtain the full circular text and specific advice before relying on it. Prepared by Finoscape Editorial Team — hello@finoscape.com.