Exporters caught in long-running disputes over IGST refunds under Rule 96(10) of the CGST Rules have received an important clarification.

The Central Board of Indirect Taxes and Customs (CBIC) has accepted the Supreme Court’s August 6, 2026 ruling in Goodluck India Limited & Anr. v. Union of India & Ors., confirming that the omission of Rule 96(10) applies to proceedings that were still pending when the Rule was removed.

CBIC communicated its acceptance through an Office Memorandum dated August 24, 2026. The practical consequence is significant: restrictions under the erstwhile Rule 96(10) cannot continue to be applied merely because the exports or refund claims relate to a period when the Rule was still in force, where the proceedings had not attained finality on the date of its omission.

For exporters with pending show cause notices, refund disputes, appeals or court proceedings involving Rule 96(10), this could provide a substantial route to relief.

What Was Rule 96(10) and Why Did It Create Problems?

Under GST, exports are treated as zero-rated supplies. An exporter can generally export goods or services on payment of IGST and claim a refund of that IGST, subject to the conditions prescribed under the law.

Rule 96(10), however, placed a restriction on this refund route where the exporter had availed benefits under certain specified concessional or exemption notifications relating to inputs.

Put simply, the Rule sought to prevent an exporter from enjoying specified benefits on inputs and simultaneously claiming a refund of IGST paid on exports.

While the objective was to prevent unintended double benefits, its operation created significant complexity. Exporters faced disputes over eligibility, interpretation of exemption notifications and recovery of refunds already sanctioned.

Even CBIC had earlier recognised practical difficulties surrounding Rule 96(10). Circular No. 233/27/2024-GST, dated September 10, 2024, addressed situations where exporters had imported inputs without payment of IGST and Compensation Cess and subsequently sought to regularise their position.

The Government ultimately decided to remove the provision.

Rule 96(10) Was Omitted From October 8, 2024

Through Notification No. 20/2024-Central Tax dated October 8, 2024, Rule 96(10) was omitted from the CGST Rules.

The omission simplified the GST refund framework for exporters. But it immediately raised another question:

What happens to disputes that had already started under Rule 96(10)?

Consider an exporter who had received a show cause notice before October 8, 2024, but whose case was still pending. Or a business whose refund had been denied and whose appeal was yet to be decided.

Could the GST Department continue enforcing a Rule that no longer existed?

That became the central legal issue.

Gujarat High Court: Pending Proceedings Cannot Continue

The Gujarat High Court considered this question in a batch of matters led by Addwrap Packaging Pvt. Ltd.

The Court drew an important distinction. It held that the omission of Rule 96(10) operated prospectively from October 8, 2024 — meaning that the Rule was not treated as though it had never existed.

However, the Court also held that the omission applied to pending proceedings that had not attained finality.

Accordingly, proceedings pending before adjudicating authorities or courts could not continue merely by relying upon the omitted Rule. The Court consequently set aside the impugned proceedings in the cases before it and recognised the exporters’ ability to maintain their IGST refund claims in accordance with law.

The distinction is important: this was not a declaration that every historical action under Rule 96(10) automatically disappeared. The focus was on matters that were still alive when the Rule was omitted.

Supreme Court Settles the Issue in Goodluck India

The dispute eventually reached the Supreme Court in Goodluck India Limited & Anr. v. Union of India & Ors.

On August 6, 2026, the Supreme Court upheld the principle that, in the absence of a saving provision, proceedings pending under Rule 96(10) could not simply continue after its omission.

A “saving clause” is essentially a legal provision that expressly preserves existing rights, liabilities or proceedings even after the underlying law is amended or removed.

No such saving provision accompanied the omission of Rule 96(10).

The Supreme Court relied upon the Constitution Bench ruling in Kolhapur Canesugar Works Ltd. v. Union of India, which had examined the legal effect of omission of a statutory rule. The principle is that where a rule is omitted without an appropriate saving mechanism, pending proceedings under that rule may not survive merely because they were initiated before its omission.

The Court also noted the policy background: Rule 96(10) had itself been removed because its operation was resulting in unnecessary complications without achieving the intended benefit.

CBIC Has Now Accepted the Supreme Court Position

The latest and perhaps most commercially relevant development is CBIC’s acceptance of the Supreme Court ruling.

According to the Office Memorandum dated August 24, 2026, the GST Policy Wing examined the judgment after receiving a reference from CBIC’s Legal Cell and concluded that the Supreme Court decision may be accepted.

CBIC also recognised an important structural point in GST law.

After the Supreme Court’s earlier decision in Kolhapur Canesugar Works, specific saving provisions were introduced in laws such as Central Excise and Customs to preserve proceedings despite amendments or omissions of rules.

No comparable saving provision currently exists under GST law for Rule 96(10).

This makes CBIC’s acceptance especially relevant for pending litigation.

Which Exporters Should Revisit Their GST Refund Cases?

Businesses should consider reviewing cases involving Rule 96(10) that were pending as on October 8, 2024, particularly where:

• a show cause notice was pending for adjudication;
• a refund rejection or recovery order was under appeal;
• proceedings were pending before a High Court or another judicial forum; or
• the Department was seeking recovery of an IGST refund by relying principally on Rule 96(10).

The precise benefit will still depend on the facts and procedural stage of each case. For example, a matter that had already attained finality before the omission may stand on a different footing from an appeal or adjudication that remained pending.

That distinction should be evaluated carefully before taking action.

What Does This Mean for GST Refund Litigation?

The larger significance of the development goes beyond one refund provision.

For exporters, the immediate takeaway is that pending Rule 96(10) disputes now have considerably greater legal certainty. With both the Supreme Court ruling and CBIC’s acceptance of that position, authorities should not continue applying the omitted restriction to qualifying pending proceedings merely because the underlying export took place when Rule 96(10) existed.

It may therefore be worthwhile for exporters to identify historical Rule 96(10) cases, examine their status as on October 8, 2024 and determine whether the Supreme Court ruling can be relied upon before the relevant adjudicating or appellate authority.

For businesses with significant export refunds tied up in litigation, that review could have a direct working-capital impact.

Key Takeaway

Rule 96(10) disappeared from the CGST Rules in October 2024. The remaining uncertainty was whether the litigation created by it would continue.

The Supreme Court has now clarified that in the absence of a saving clause, the omitted Rule cannot continue to govern proceedings that were still pending when the omission took effect. CBIC’s subsequent acceptance of that ruling strengthens the position further.

For exporters, the issue is therefore no longer simply whether they had once fallen within Rule 96(10).

The more important question is:

Was their Rule 96(10) dispute still pending on October 8, 2024?

If yes, the latest development deserves a fresh look.