Vedanta moves High Court fearing a loss of ₹150 crore due to “arbitrary” deadline fixed by DGFT

Firm also insists on utilising duty credit certificate to set off IGST and GST compensation cess

Vedanta Limited, formerly Sterlite Industries (India) Limited, has moved the Madras High Court claiming that it might end up suffering a loss of ₹150 crore if it is not allowed to use duty credit certificates beyond 24 months, besides using them to set off Integrated Goods and Services Tax (IGST) and GST Compensation Cess.

The writ petitions filed by the company have been listed for admission before the first Division Bench of Chief Justice Munishwar Nath Bhandari and Justice D. Bharatha Chakravarthy on Monday. In its affidavit, the company said it was engaged in mining and extraction of metals such as copper, zinc, aluminium and iron ore.

It's name got changed due to corporation reorganisation in 2013. Import and export of inputs and final products was part and parcel of its business activities. The Foreign Trade Policy (FTP) for 2004-09 provided a scheme for import duty set off to business houses, which meet certain targets with respect to their exports.

As per the Target Plus Scheme (TPS), star export houses, which secure an incremental growth between 20 to 24.99%, were entitled to 5% duty credit. Similarly, those who had secured a growth between 25 and 99.99% were entitled to 10% duty credit and those who had secured more than 100% growth were entitled to 15% credit.

The duty credit could be used for import of any inputs, capital goods, spares, office equipment, professional equipment, office furniture and so on. Vedanta claimed that it had registered an incremental export growth of 149% in 2005-06 as against the figure for the previous year and was therefore eligible to avail 15% duty credit under TPS.

However, in 2006, the Centre amended the FTP and held that the duty credit would be restricted to only 5% for all categories of star exporters and also gave retrospective effect to the notification. Hence, Vedanta first claimed duty credit of ₹101.9 crore (accounting to 5%) and moved the court along with others to claim the rest of ₹216.38 crore.