Rule 96(10) Omission and GST Export Refunds: Circular No. 264/10/2026-GST Explained

The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 264/10/2026-GST dated 26 October 2026, clarifying the effect of omitting Rule 96(10) of the CGST Rules.

The circular addresses whether the omission affects earlier periods and how pending proceedings should be handled. It also extends corresponding treatment to the omission of Rules 89(4A) and 89(4B).

1. What Was the Purpose of Rule 96(10)?

The circular explains that Rule 96(10) was introduced with effect from 23 October 2017 to prevent a double benefit for exporters.

It restricted the export IGST refund route in circumstances where the exporter had benefited from specified exemptions or concessions on procurement.

Following recommendations of the 54th GST Council meeting held on 9 September 2024, the rule was omitted with effect from 8 October 2024 because of difficulties faced by exporters. (Notification No. 20/2024-Central Tax dated 8 October 2024)

2. Why Was Clarification Needed?

Questions arose about the effect of the omission on earlier periods and pending disputes.

In particular, taxpayers and officers sought clarity on whether the omission should apply retrospectively from the date the rule was introduced.

3. Supreme Court Decision Referred to in the Circular

The circular refers to the Supreme Court’s order dated 6 August 2026 in the matter of M/s Goodluck India Limited & Anr. v. Union of India & Ors.

As described in the circular, the Court held that, in the absence of a saving clause or sunset clause accompanying the omission, it applies to proceedings pending on the date of omission. (Paragraph 4)

The circular also records that the Court relied on the Constitution Bench decision in Kolhapur Canesugar Works Ltd. v. Union of India. The principle discussed is that pending proceedings under an omitted rule require an express provision or other legal mechanism preserving their continuation. (Paragraph 5)

4. CBIC Clarification on Retrospective Effect

In view of the Supreme Court decision, CBIC clarifies that the omission of Rule 96(10) is effective retrospectively from 23 October 2017.

Officers are directed to deal with pending proceedings concerning that rule in accordance with the judgment. (Paragraph 6)

The circular’s operative direction therefore expressly addresses pending proceedings.

5. Corresponding Treatment for Rules 89(4A) and 89(4B)

The circular states that the same treatment applies, with the necessary corresponding adjustments, to the omission of Rules 89(4A) and 89(4B). (Paragraph 6)

These rules are therefore included in the clarification’s scope.

6. Important Dates at a Glance

Conclusion

Circular No. 264/10/2026-GST clarifies the retrospective effect of the omission of Rule 96(10) and directs officers to handle pending proceedings in accordance with the Supreme Court judgment discussed in it. Corresponding treatment also applies to the omission of Rules 89(4A) and 89(4B).

To read the complete clarification and access the original circular, refer to Circular No. 264/10/2026-GST dated 26 October 2026: 

https://taxinformation.cbic.gov.in/view-pdf/1003355/ENG/Circulars

Disclaimer : This article is for informational purposes only and should not be construed as legal or professional advice. Taxpayers should consult their tax advisor based on the facts of their specific case before taking any action.