• Dated 20^th August, 2026

Omission of Rule 96(10) of CGST Rules applies to pending proceedings: Supreme Court ruling

Brief Facts

A batch of matters before the Hon'ble Supreme Court concerned the effect of omission of sub-rule (10) of Rule 96 of the Central Goods and Services Tax Rules, 2017 ("CGST Rules"). Rule 96(10) had imposed a restriction on refund of integrated tax paid on goods and services exported out of India where the prescribed benefits under specified notifications had been availed.

Rule 96(10) was omitted vide Notification No. 20/2024 with effect from 08.10.2024. The principal issue before the Hon'ble Supreme Court was whether such omission would benefit assessees in proceedings that were already pending on the date of omission, particularly where refund claims had been made but proceedings concerning the applicability of Rule 96(10) were pending.

Assessee's Contention

The assessees contended that, upon omission of Rule 96(10) without any saving clause, the restriction contained therein could no longer be applied to pending proceedings. It was submitted that the omitted provision stood obliterated and could not continue to govern proceedings merely because such proceedings had commenced before the date of omission.
The assessees relied upon the Constitution Bench decision in Kolhapur Canesugar Works Ltd. v. Union of India, wherein it was held that, in the absence of a saving provision or a legal device providing for continuation, proceedings under an omitted rule could not be continued.

Respondent's Contention

The Union of India contended that the omission of Rule 96(10) was intended to operate prospectively and, therefore, should not affect proceedings relating to the period when the provision was in force.

Reliance was placed on the recommendation of the 54th GST Council meeting held on 09.09.2024, which had recommended that Rule 96(10), along with Rules 89(4A) and 89(4B), be omitted with prospective effect. The Department sought to rely upon this recommendation to contend that the omission should not disturb pending proceedings.

Court's Decision

The Hon'ble Supreme Court held that the omission of Rule 96(10), without any saving clause, would apply to all proceedings pending as on the date of its omission. The Court relied upon the Constitution Bench decision in Kolhapur Canesugar Works Ltd. v. Union of India and reiterated that, where a rule is omitted, pending proceedings can continue only if there is a specific provision for their continuance or a legal device creating such a fiction.

The Court further observed that Section 6 of the General Clauses Act was not applicable to the omission of a rule in the circumstances considered in Kolhapur Canesugar Works. In the present case, there was no saving clause or sunset clause accompanying the omission of Rule 96(10).

The Hon'ble Court also noted that the GST Council recommendation regarding prospective application was advisory in nature and did not bind the rule-making authority. Since Rule 96(10) was omitted to bring the unnecessary complications to an end and no saving provision was introduced, the Court held that the provision could not be kept alive for pending proceedings.

Accordingly, the Hon'ble Supreme Court declined to interfere with the High Court's judgment and dismissed the appeals. The Registry was also directed to circulate the judgment to the High Courts and facilitate expeditious disposal of matters concerning the omission of Rule 96(10).

BTA's Comment

This judgment settles an important issue concerning the effect of omission of Rule 96(10) of the CGST Rules. The Hon'ble Supreme Court has held that, in the absence of a saving clause or any other legal mechanism providing for continuation, the omitted Rule 96(10) cannot be applied to proceedings pending on the date of its omission. Accordingly, pending proceedings seeking to deny refund by relying solely upon the restriction under the omitted Rule 96(10) would not survive.

Case Reference: M/s Goodluck India Limited & Anr. v. Union of India & Ors., Special Leave Petition (C) No. 24550 of 2025 and connected matters, Supreme Court of India, order dated 06.08.2026 (2026 INSC 821).

Author: Harsh Kr Gupta

Edited By: Sneha Nandi