The short answer
On 26 October 2026 CBIC issued two circulars that matter to every exporter claiming GST refunds:
- Circular No. 264/10/2026-GST accepts the Supreme Court's judgment in Goodluck India Ltd. v. Union of India (6 August 2026). It clarifies that the omission of rule 96(10) of the CGST Rules is effective retrospectively from 23 October 2017. Field formations are to deal with pending rule 96(10) proceedings in line with the judgment. The same treatment applies to the omission of rules 89(4A) and 89(4B).
- Circular No. 263/09/2026-GST clarifies which ways of receiving export payment satisfy the "convertible foreign exchange" condition for export of services. It covers SNRR and INR Nostro accounts, NRE accounts for stock brokers, set-off against import payables and reinsurance net retention. It also ties the realisation period for export of goods under rule 96B to the RBI's timelines.
Rule 96(10): what it did and why the circular matters
Rule 96(10) was introduced from 23 October 2017. As Circular 264 describes it, the aim was to stop a double benefit: exporters who procured inputs with an IGST exemption or concession under specified notifications could not also claim a refund of IGST paid on exports of those goods. The circular records that exporters faced difficulty with refunds on exports because of this restriction.
After the 54th GST Council meeting, rule 96(10) was omitted from 8 October 2024 by Notification No. 20/2024-Central Tax. That omission was on its face prospective, which left the question open for refunds of earlier periods.
What the Supreme Court held, and what CBIC now says
According to Circular 264, the Supreme Court in Goodluck India Ltd. v. Union of India (SLP (Civil) No. 24550 of 2025 and connected matters, judgment dated 6 August 2026) held:
- the omission of rule 96(10) came with no saving clause or sunset clause, so it applies to all proceedings pending on the date of omission;
- relying on the Constitution Bench in Kolhapur Canesugar Works Ltd. v. Union of India [(2000) 2 SCC 536], section 6 of the General Clauses Act, 1897 does not apply to the omission of a rule. Pending proceedings survive only where an express provision or a legal device preserves them.
In paragraph 6 the Board clarifies that the omission of rule 96(10) will be effective retrospectively from 23.10.2017, and directs officers to deal with pending proceedings concerning rule 96(10) in accordance with the judgment. The same applies, mutatis mutandis, to the omission of rules 89(4A) and 89(4B).
What this means for exporters
- Pending notice or demand under rule 96(10): if you have a show cause notice, adjudication or appeal still pending on a rule 96(10) ground, Circular 264 and the judgment are the basis for asking that it be dropped. Cite both in your reply or appeal.
- Refunds withheld or rejected on a rule 96(10) ground: where the matter is still pending (including in appeal), raise the judgment and the circular.
- Matters already closed: the judgment, as the circular summarises it, speaks of proceedings pending on the date of omission. Whether anything can be done in a concluded case depends on its facts and the remedies still open; take advice before acting.
- Rules 89(4A) and 89(4B): paragraph 6 of the circular extends the same treatment to their omission, so check pending refund matters under those rules too.
Circular 263: receiving payment for export of services
For a supply to count as an export of services, one of the conditions in section 2(6) of the IGST Act (sub-clause (iv)) is that the supplier receives payment in convertible foreign exchange, or in Indian rupees wherever the RBI permits. Circular 263 clarifies:
- Repatriable rupee accounts. Payment received in convertible foreign exchange, or in repatriable INR accounts such as an SNRR account, an INR Nostro account or any similar account for repatriation of foreign exchange, satisfies the condition. This builds on Circular 202/14/2023-GST, which covered Special Rupee Vostro Accounts.
- Stock brokers. Payment by overseas clients (FPIs, NRIs, OCIs) through repatriable INR accounts (SNRR, NRE) satisfies the condition. Payments from NRO accounts should be routed through a repatriable account (SNRR, NRE) to qualify.
- Set-off. Where export receivables are set off against import payables in accordance with RBI directions, the condition is treated as met. The circular notes that the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, apply from 1 October 2026.
- Reinsurance brokers. Where an Indian reinsurance broker retains its commission out of the premium before remitting the net amount abroad (net retention), the condition is treated as satisfied.
Circular 263: realisation period for export of goods (rule 96B)
Rule 96B requires an IGST refund on exports to be repaid, with interest, where the sale proceeds are not realised within the period allowed under FEMA (including any extension). The circular clarifies:
- the time limit is the period, or extended period, in the RBI's FED Master Direction No. 16/2015-16 (as amended, last on 5 June 2026);
- where the realisation requirement has been written off by the AD bank, wholly or partly, no recovery is to be made under rule 96B.
For the RBI's own change to the realisation period, see our news item on export realisation from 1 October 2026.
What to do now
- List every pending rule 96(10), 89(4A) or 89(4B) notice, order or appeal, and file a reply or additional ground citing Goodluck India and Circular 264.
- Service exporters paid in INR: check that the money came through an SNRR, NRE, Nostro or Vostro route, and keep the bank advice with the FIRC or BRC.
- Goods exporters: track realisation against the RBI period, and get the AD bank's write-off on record wherever proceeds will not come in.
Related: the 2026 refund rule changes and our 57th GST Council overview.
Sources: CBIC Circular No. 263/09/2026-GST and Circular No. 264/10/2026-GST, both dated 26 October 2026, read from the copies on CBIC's Tax Information Portal. The judgments are described as Circular 264 summarises them; we have not reproduced the judgment text. This article is not legal advice on a particular case.
