Facts
The Petitioner, engaged in export of services, had claimed refund of unutilized GST Input Tax Credit (ITC) by providing a Chartered Accountant's (CA) certificate - instead of Foreign Inward Remittance Certificates (FIRCs) - for receipt of net foreign exchange. However, the refund was rejected on the ground of non-submission of FIRCs.
Notably, the Reserve Bank of India (RBI) had accorded approval to the Petitioner, to operate a pan‑India clearing mechanism for receiving foreign currency on exports after netting off any payments in foreign currency to the overseas group entities.
Issues
Whether the net foreign exchange received by the Petitioner, under the RBI’s approval for netting off, qualifies as “convertible foreign exchange” for export services?
Whether a CA's certificate, verifying net foreign exchange receipts, can be accepted as sufficient documentary proof in lieu of FIRCs?
Decision
[Judgment of the Hon'ble High Court of Gujarat, dated 26.03.2025, in R/Special Civil Application no. 13427 of 2024]
Refund is admissible even in case of receipt of net foreign exchange, since the mechanism of set off is approved by the RBI.
Further, CA's certificate, for the receipt of convertible foreign exchange for the export of the services, is sufficient in lieu of FIRCs. This was based on the Hon'ble Supreme Court's decision in Union of India v. Mangal Textile Mills (P.) Ltd. 2011 (269) E.L.T. 3 (S.C.), wherein the certificate issued by the CA is required to be considered by the authority as an authentic document and is bound to consider the same.
Comments
Apart from emphasizing the importance of substance over form, the aforesaid judgment highlights the evidentiary value of a CA certificate.
[Prepared with inputs from Adv. S Abirami & S Srimathi]
