Circular 264: Rule 96(10) Omission Is Retrospective From 23 October 2017
CBIC Circular 264/10/2026-GST: omission of rule 96(10) effective from 23 Oct 2017 after the Supreme Court judgment in Goodluck India, plus rules 89(4A) and 89(4B).
Key takeaways: circular 264
- The circular 264 is effective retrospectively from 23 October 2017, says Circular 264.
- The Supreme Court judgment of 6 August 2026 in Goodluck India Limited is the basis.
- The same treatment applies to the omission of rules 89(4A) and 89(4B).
Table of contents
CBIC’s Circular No. 264/10/2026-GST, dated 26 October 2026, clarifies that the omission of rule 96(10) of the CGST Rules is effective retrospectively from 23 October 2017. It follows the Supreme Court’s judgment of 6 August 2026 in Goodluck India Limited v. Union of India.
Background
- Rule 96(10) was introduced with effect from 23 October 2017 to prevent a double benefit to exporters: an IGST exemption on inputs procured under specified notifications and an IGST refund on exports of the same goods.
- After the 54th GST Council meeting (9 September 2024), the rule was omitted prospectively with effect from 8 October 2024 through the CGST (Second Amendment) Rules, 2024.
- Courts had differed on whether the omission applied to earlier periods and pending cases.
The Supreme Court’s ruling
In its judgment of 6 August 2026 (SLP (Civil) No. 24550 of 2025), the Supreme Court held that, with no saving or sunset clause, the omission applies to all proceedings pending on the date of omission. It relied on the Constitution Bench decision in Kolhapur Canesugar Works Ltd. v. Union of India (2000), which holds that section 6 of the General Clauses Act, 1897 does not apply to the omission of a rule.
What the circular directs
- The omission of rule 96(10) is effective retrospectively from 23 October 2017.
- Field formations must deal with pending rule 96(10) proceedings in line with the judgment.
- The same treatment applies, with the necessary changes, to the omission of rules 89(4A) and 89(4B).
- Field formations are to issue trade notices to publicise the circular.
What exporters should do
- Check whether you have any pending demand, show cause notice or refund rejection based on rule 96(10), 89(4A) or 89(4B).
- Reply citing the circular and the Supreme Court judgment, or ask your advisor to do so.
- Where a refund was withheld on this ground, consider applying within the time limit; take advice on the time limits for your case.
Related: Circular 263 on export proceeds and how to reply to a GST notice. If you have received a notice, see our notice reply service.
What to do next about circular 264
Review how circular 264 affects your business: note the effective date, check your records and software, brief your team and keep a copy of the official text on file. Where the position is unclear for your case, take professional advice before filing or changing your process.
Official sources for circular 264
Always read the original text. You can find notifications, circulars and rules on the CBIC Tax Information Portal and file returns and applications on the GST Portal. This guide on circular 264 is a summary and is not a substitute for the official text.
Frequently asked questions
From when is rule 96(10) treated as omitted?
The circular says the omission is effective retrospectively from 23 October 2017, although the notification itself omitted it from 8 October 2024.
Does this apply to rules 89(4A) and 89(4B)?
Yes, the same treatment applies to their omission, with the necessary changes.
What was the basis for the circular?
The Supreme Court’s judgment of 6 August 2026 in Goodluck India Limited v. Union of India.
This article is for general information only and is not tax, legal or financial advice. It is based on the text of the notification or circular as published by CBIC. Rules, rates and criteria change, so confirm the latest position with the official source or a professional before acting.
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