Circular No 264/10/2026

The Central Board of Indirect Taxes and Customs (CBIC) has issued an important clarification regarding the retrospective applicability of the omission of Rule 96(10) of the CGST Rules, 2017, in view of various court judgments and doubts raised by taxpayers and GST authorities.

• Rule 96(10) was introduced with effect from 23.10.2017 to prevent double benefits to exporters. Under this provision, exporters who availed IGST exemption benefits on procurement under specified notifications were restricted from claiming IGST refunds on the export of such goods. Considering the difficulties faced by exporters, the GST Council, in its 54th meeting held on 09.09.2024, recommended the omission of this rule. Accordingly, Rule 96(10) was omitted prospectively with effect from 08.10.2024 through Notification No. 20/2024-Central Tax dated 08.10.2024.
• Supreme Court Judgment: The Hon’ble Supreme Court, in the case of M/s Goodluck India Limited & Anr. v. Union of India & Ors., SLP (Civil) No. 24550 of 2025 and connected matters, vide judgment dated 06.08.2026, held that since Rule 96(10) was omitted without any saving clause or sunset clause, its omission would apply to all proceedings pending as on 08.10.2024, being the date of omission.
• The Hon’ble Supreme Court relied upon the Constitution Bench judgment in Kolhapur Canesugar Works Ltd. v. Union of India [(2000) 2 SCC 536], wherein it was held that Section 6 of the General Clauses Act, 1897, does not apply to the omission of a rule. Accordingly, proceedings pending under an omitted rule can continue only where there is an express legal provision allowing their continuation or where the statute or rules contain a legal mechanism preserving such proceedings.
• In view of the above Supreme Court judgment, CBIC has clarified that the omission of Rule 96(10) shall be effective retrospectively from 23.10.2017, instead of being restricted to 08.10.2024. Accordingly, GST authorities have been instructed to deal with all pending proceedings relating to Rule 96(10) in accordance with the said judgment.
• CBIC has further clarified that the same treatment shall also apply, mutatis mutandis (with necessary modifications), to the omission of Rules 89(4A) and 89(4B) of the CGST Rules, 2017.
• CBIC has requested that suitable trade notices be issued to publicise the contents of this Circular. Further, any difficulties arising in its implementation may be brought to the notice of the Board.