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Case Law

Supreme Court: Omission of Rule 96(10) Applies to Pending IGST Refund Proceedings — No Saving Clause, No Survival

Published 12 Aug 2026· Updated 25 Aug 2026· 4 min read

Executive Summary

The Supreme Court, in M/s Goodluck India Limited & Anr. v. Union of India & Ors. (2026 LiveLaw (SC) 781; 2026 INSC 821 — independently verified; also reported as SLP(C) No. 24550/2025, 2026 TAXSCAN (SC) 228, not independently confirmed; decided 6 August 2026), has dismissed the Union of India’s appeal and held that the omission of Rule 96(10) of the CGST Rules, 2017 — effected without any saving clause via Notification No. 20/2024-Central Tax with effect from 8 October 2024 — applies to all proceedings that were pending as on that date. A Bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran held that, absent a saving clause or legal fiction preserving them, proceedings initiated under an omitted rule cannot continue, applying the Constitution Bench’s ruling in Kolhapur Canesugar Works Ltd. v. Union of India. The Court rejected the Revenue’s argument — based on GST Council minutes describing the omission as “prospective” — noting that Council recommendations are advisory and cannot substitute for an express saving clause in the notification itself. High Courts nationally have been directed to dispose of similar pending matters in line with this ruling.

Background / Facts

Rule 96(10) of the CGST Rules restricted an exporter’s entitlement to refund of Integrated GST paid on exported goods or services where the exporter had availed benefits under specified duty-exemption schemes (including Advance Authorisation and EPCG) on inputs used in the exported goods. The rule generated years of litigation and compliance friction. The 54th GST Council meeting’s Law Committee observed that Rule 96(10) (along with Rules 89(4A) and 89(4B)) was “leading to unnecessary complications without any intended benefit being served” and recommended omission. The Central Government omitted Rule 96(10) with effect from 8 October 2024 via Notification No. 20/2024-Central Tax — critically, without inserting any saving clause to preserve proceedings already initiated under the rule. The Union of India appealed to the Supreme Court by Special Leave Petition after the Bombay High Court held such proceedings could not survive the omission.

The Court’s Reasoning

The Additional Solicitor General relied on the 54th GST Council meeting’s minutes to argue the omission was intended to operate prospectively only. The Supreme Court rejected this, applying the Constitution Bench’s holding in Kolhapur Canesugar Works Ltd. v. Union of India: where a rule is omitted without a saving clause or a legal fiction deeming it to continue, proceedings initiated under that rule cannot survive the omission. The Court found no saving provision anywhere in Notification No. 20/2024-Central Tax itself. The Bench observed: “The intention to omit the rule without any saving clause was to bring to an end, the unnecessary complications once and for all and the intention cannot be to keep alive the unnecessary complications insofar as the pending proceedings are concerned.” The Court directed the Registries of High Courts to place similar pending Rule 96(10) matters before the respective Chief Justices for disposal in line with this ruling.

Why It Matters

This is now the Supreme Court’s definitive word on a question litigated inconsistently across High Courts for nearly two years, resolved firmly in exporters’ favour. Any client with a pending Rule 96(10)-based IGST refund denial, demand notice, or unadjudicated SCN — where the underlying proceeding was pending as on 8 October 2024 — is now entitled to have that proceeding dropped and the withheld IGST refund released.

Key Takeaways

  • Rule 96(10), which restricted IGST refunds where duty-exemption schemes were availed on inputs, was omitted from 8 October 2024 without a saving clause.
  • The Supreme Court has confirmed, applying Kolhapur Canesugar Works, that omission without a saving clause means pending proceedings cannot continue.
  • GST Council minutes describing an amendment as “prospective” are advisory only and cannot cure the absence of an express saving clause.
  • The ruling covers SCNs, demand orders, appeals and refund rejections pending as on 8 October 2024.
  • High Court Registries have been directed to dispose of pending Rule 96(10) matters in line with this judgment.

Practical Implications

Firms should audit exporter clients for any pending Rule 96(10)-related matter where the proceeding was pending as on 8 October 2024, and cite this ruling to seek closure and release of the withheld IGST refund, including applicable Section 56 interest.

Action Checklist

  • Identify exporter clients with IGST refund claims denied, withheld or under demand citing Rule 96(10).
  • Confirm the proceeding was pending as on 8 October 2024.
  • Pursue closure citing Goodluck India Limited, plus Section 56 interest on delayed refunds.
  • For matters already pending before a High Court, bring this ruling to the Court’s attention.

Relevant Sections / Rules / Notifications

  • Rule 96(10), CGST Rules, 2017 (omitted)
  • Notification No. 20/2024-Central Tax, effective 8 October 2024
  • Section 56, CGST Act, 2017 (interest on delayed refunds)
  • Supreme Court: M/s Goodluck India Limited & Anr. v. Union of India & Ors., 2026 LiveLaw (SC) 781; 2026 INSC 821 (independently verified); also reported as SLP(C) No. 24550/2025, 2026 TAXSCAN (SC) 228 (not independently confirmed), decided 6 August 2026
  • Followed: Kolhapur Canesugar Works Ltd. v. Union of India (Constitution Bench)

FAQs

Q: Does this ruling mean Rule 96(10) never applied to any exporter?
A: No. It applies specifically to proceedings pending as on 8 October 2024. Matters already finally concluded before that date are not automatically reopened.

Q: Can the Department argue the omission was only “prospective”?
A: No — the Supreme Court has rejected this; GST Council recommendations are advisory and cannot cure the absence of an express saving clause.

Reading Time

6 minutes

Author & Disclaimer

Prepared by Finoscape Editorial Team — contact@finoscape.com. This article is for general informational purposes and does not constitute legal or tax advice. Readers should consult a qualified professional and verify the primary judgment text before relying on this analysis for any specific matter.

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