IGST on Ocean Freight Refund – Interest Payable | HC

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  • Last Updated on 30 January, 2026

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IGST on ocean freight

Case Details: Paradeep Phosphates Ltd. vs. Additional Commissioner Goods and Services Tax [2026] 182 taxmann.com 587 (Orissa)

Judiciary and Counsel Details

  • Harish Tandon, CJ. & Murahari Sri Raman, J.
  • Jagabandhu Sahoo, Sr. Adv., Ronit Ghosh, Subhajeet Sahu, Urmila Sahoo, Romeet Panigrahi & Ms Kajal Sahoo, Advs. for the Petitioner.
  • Sujan Kumar Roy Choudhury, Senior Standing Counsel for the Opposite Parties.

Facts of the Case

The petitioner, being a manufacturer of fertiliser, imported raw materials and discharged customs duty on the assessable value of such imports. It paid IGST under the reverse charge mechanism on ocean freight. The petitioner challenged the levy of IGST on ocean freight. However, the Department declined to grant interest on such a refund, contending that the refund was processed within the statutory time under Section 54 of the CGST Act and that the statute did not expressly provide for interest in such circumstances. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the IGST collected on ocean freight was without authority of law, as such a levy had been declared unconstitutional by the Supreme Court in Mohit Minerals (P.) Ltd. The Court held that where a tax is collected pursuant to a levy that is subsequently found to be illegal and unconstitutional, the petitioner is entitled to interest on the refunded amount. The refund not arose from any misinterpretation by a quasi-judicial authority, and therefore, the Department’s denial of interest was unsustainable. It was further held that the interest was payable under Section 56 read with Section 54 of the CGST Act and the Odisha GST Act from the date of payment of IGST on ocean freight until the date of actual refund.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied