Rule 96(10) Omission Retrospective: CBIC Circular 264 for Exporters
October 30, 2026 · GST
CBIC Circular 264 says the rule 96(10) omission is effective retrospectively from October 23, 2017: what it means for exporters' pending IGST refund cases.
A rule that was deleted in 2024 is now, in CBIC's view, to be treated as if it had gone in 2017 for cases still open. CBIC Circular No. 264/10/2026-GST dated October 26, 2026 clarifies that the omission of rule 96(10), made with effect from October 8, 2024, will be effective retrospectively from October 23, 2017, the date from which the rule took effect, and directs officers to deal with pending proceedings in line with the Supreme Court judgment. Exporters who paid IGST on exports while using duty-free or concessional inputs, and who face refund recovery notices, demands or appeals, are the ones affected.
The same treatment applies to the omission of rules 89(4A) and 89(4B) of the CGST Rules, 2017. The position below is as of October 30, 2026.
What has changed under Circular 264/10/2026-GST
In plain English: tax officers should no longer use rule 96(10) to deny or recover IGST refunds in matters that are still open. The Board has issued the circular under section 168(1) of the CGST Act, 2017 to ensure uniform treatment across field formations.
The circular says the omission of rule 96(10) "will be effective retrospectively from 23.10.2017" . Field formations are advised to deal with pending proceedings concerning rule 96(10) in accordance with the Supreme Court judgment. It adds that such treatment applies, mutatis mutandis (with the necessary changes), to the omission of rules 89(4A) and 89(4B).
Rule 96(10) omission retrospective: timeline from 2017 to 2026
Date
Event
Source
October 23, 2017
Rule 96(10) restriction takes effect, to prevent a "double benefit" for exporters (originally inserted as rule 96(9) by Notification 75/2017-Central Tax dated December 29, 2017, with effect from October 23, 2017)
Circular 264/10/2026-GST, para 3
2018 to 2020
Rule 96(10) and rules 89(4A), 89(4B) amended several times: Notification 3/2018 (January 23, 2018) and Notification 39/2018 (September 4, 2018) with effect from October 23, 2017; Notification 53/2018 (October 9, 2018) substituting rule 96(10) with deemed effect from October 23, 2017; Notification 54/2018 (October 9, 2018) substituting rule 96(10) and rule 89(4B) from its publication; and Notification 16/2020 (March 23, 2020) adding an Explanation to rule 96(10)(b) with effect from October 23, 2017 (all Central Tax)
CGST Rules amendment notifications (CBIC Tax Information Portal)
September 9, 2024
54th GST Council meeting recommends omitting rules 96(10), 89(4A) and 89(4B) "with prospective effect"
Supreme Court order para 4 (Council minutes); Circular para 3 (meeting date)
October 8, 2024
Notification No. 20/2024-Central Tax (CGST (Second Amendment) Rules, 2024) omits rule 96(10) and rules 89(4A), 89(4B) from this date, with no retrospective or saving clause
Notification 20/2024-Central Tax (circular para 3 cites it as "20/2024-GST")
August 6, 2026
Supreme Court, M/s Goodluck India Limited & Anr. v. Union of India & Ors., SLP (Civil) No. 24550 of 2025 and connected matters: omission applies to all proceedings pending on the date of omission
Supreme Court order, 2026 INSC 821 (reproduced copy)
October 26, 2026
CBIC Circular No. 264/10/2026-GST, under section 168(1), clarifies that the omission will be effective retrospectively from October 23, 2017 and directs that pending proceedings follow the judgment
Circular 264/10/2026-GST , para 6
Questions exporters are asking
What did rule 96(10) do?
It blocked the refund of IGST paid on exports where the exporter had received inputs without tax or at a concessional rate under specified notifications. The circular describes the aim as preventing a double benefit : an IGST exemption on procurement plus an IGST refund on export.
In practice this hit exporters importing inputs under Advance Authorisation or as an Export Oriented Unit (EOU), using the IGST exemptions in Notification No. 79/2017-Customs (Advance Authorisation and EPCG) and Notification No. 78/2017-Customs (EOU imports), both dated October 13, 2017, and then exporting on payment of IGST. From October 9, 2018, Notification 54/2018-Central Tax carved out imports of capital goods under EPCG from rule 96(10).
What are rules 89(4A) and 89(4B)?
These were the parallel provisions for refund of input tax credit on zero-rated supplies where inputs were received under similar concessional notifications. Notification 20/2024-Central Tax omitted both sub-rules and removed the linked words from rule 89(4) and rule 89(5). The circular extends the same retrospective treatment to them.
What did the Supreme Court decide in Goodluck India?
In its order of August 6, 2026 , the Court held that rule 96(10) was omitted without any saving clause or sunset clause , so the omission applies to all proceedings pending on the date of omission. It relied on the Constitution Bench ruling in Kolhapur Canesugar Works Ltd. v. Union of India [(2000) 2 SCC 536] that section 6 of the General Clauses Act, 1897 does not apply to the omission of a rule.
The Court also said the GST Council's "prospective effect" recommendation was advisory and did not bind the rule-making authority. The Department's appeals were dismissed, and the two SLPs challenging the validity of rule 96(10), including the lead SLP, were dismissed as infructuous.
Is this a new amendment to the rules?
No. The circular is a clarification by the Board following the judgment; the rule itself was omitted with effect from October 8, 2024. As of October 30, 2026, no notification has been issued giving that omission retrospective effect or restoring rule 96(10), 89(4A) or 89(4B). The separate CGST (Amendment) Rules, 2026 notified on October 26, 2026 deal with other rules.
Which bucket are you in? A traffic-light guide
The circular speaks of "pending proceedings". It does not expressly deal with concluded matters or the refund of amounts already paid, so the colours below reflect how clearly each situation is covered.
Signal
Your situation
What the circular and judgment indicate
Green
Show cause notice or recovery demand under rule 96(10) still pending
Pending proceedings are to be dealt with in line with the judgment; the omission applies
Green
Appeal or writ pending against a rule 96(10) demand or refund rejection
Pending proceedings; the Supreme Court directed that rule 96(10) cases pending before High Courts be listed expeditiously
Amber
Amount paid under protest or deposited, with the dispute still open
The dispute may be a pending proceeding, but the circular does not say how amounts already paid or deposited are to be refunded
Red
Matter concluded: order accepted, not appealed, or time to appeal over
Not addressed by the circular, which speaks only of pending proceedings; relief for closed matters is uncertain
IGST refund for exporters using Advance Authorisation: why it matters
Many diamond and jewellery exporters import rough diamonds, gold or other inputs under Advance Authorisation or EOU schemes and export finished goods. Where they also paid IGST on exports and claimed a refund, rule 96(10) was a common ground for recovery notices.
For such exporters, rule 96(10) disputes relating to the period from October 23, 2017 onwards that are still pending are now to be dealt with in line with the circular and the judgment. The same applies to other export sectors using these schemes.
Common mistakes to avoid
Assuming every old case reopens. The circular addresses pending proceedings; concluded matters are not covered expressly.
Ignoring a pending notice. Replies and hearings still need a response; cite the circular and the judgment instead of letting deadlines pass.
Forgetting rules 89(4A) and 89(4B). ITC refund disputes on the same concessional inputs get the same treatment.
Withdrawing an appeal too early. Check how the appellate authority will dispose of it and how any pre-deposit is handled.
Treating the circular as a new refund scheme. It does not prescribe any fresh application f