Last reviewed: 10 September 2026. Importers who bring in goods on a CIF (Cost, Insurance, Freight) basis have, for years, effectively paid IGST twice on the ocean-freight component of their imports — once embedded in the customs-value-based IGST at the port, and again separately under reverse charge on the notional value of the ocean-freight service itself. The Supreme Court's ruling in Union of India v. Mohit Minerals Pvt Ltd (2022) struck down this reverse-charge levy as unconstitutional double taxation, and importers who paid it in earlier years remain eligible to claim refunds — but with two live disputes, on limitation and on unjust enrichment, still deciding how much of that refund actually comes back in 2026.
Background: why CIF importers paid IGST twice
Under a CIF import contract, the price the Indian importer pays to the foreign supplier already includes the cost of ocean freight and insurance up to the Indian port. Customs law computes IGST on imported goods on this full CIF value, so the freight component is already taxed once as part of the landed value of the goods. Separately, under Notification 8/2017-Integrated Tax (Rate) and Notification 10/2017-Integrated Tax (Rate), the government had treated the ocean-freight service itself as a distinct supply, and cast the liability to pay IGST on that service — under reverse charge — on the Indian importer, computed on a notional value of the freight (typically 10% of the CIF value where the actual freight was not ascertainable). The result was that Indian importers on CIF terms were paying IGST on the same freight component twice: once inside the CIF-value-based IGST at customs, and again separately under RCM on the deemed freight service.
The Mohit Minerals ruling
The Supreme Court in Union of India v. Mohit Minerals Pvt Ltd (2022) struck down this reverse-charge levy on ocean freight for CIF imports, holding it amounted to unconstitutional double taxation of the same value. The ruling also carried a significant, broader holding on GST federalism — that recommendations of the GST Council are recommendatory rather than binding on Parliament and State legislatures — but for importers, the operative consequence was narrower and very concrete: the RCM levy on ocean freight for CIF imports could no longer be sustained, and it was discontinued going forward. Importers who had paid this RCM IGST in earlier years — broadly across the FY 2017-18 to FY 2021-22 period, before the levy was discontinued — became entitled, in principle, to claim a refund of tax paid on a levy the Supreme Court had held was never validly imposed.
Live dispute 1: limitation under Section 54
Section 54 of the CGST Act ordinarily requires a refund claim to be filed within two years of the "relevant date." For a straightforward refund of tax paid, that relevant date is usually the date of payment. Applied mechanically here, that would mean refund claims for RCM IGST paid, say, in FY 2018-19 would already be time-barred by the time Mohit Minerals was decided in 2022 — let alone by 2026. Courts have not applied the limitation clock uniformly on this point. Some High Courts have taken the view that where the underlying levy itself has been declared unconstitutional, the "relevant date" for limitation purposes should reasonably be read as the date the levy was struck down (or, in some formulations, the date the importer could first reasonably have known the levy was invalid), rather than the original date of payment — and have accordingly allowed refund claims filed even several years after the original RCM payment, so long as they were filed within a reasonable period after the Mohit Minerals ruling or a related order. This position is not settled uniformly across all jurisdictions, and importers should treat the limitation question as one requiring specific legal evaluation of their facts and filing timeline, not a foregone conclusion either way.
Live dispute 2: unjust enrichment
Separately, any refund claim under Section 54 is subject to the unjust enrichment bar — the claimant must show that the incidence of the tax was not passed on to another person (typically, the ultimate customer). Revenue sometimes argues, particularly for larger importers with cost-plus or pass-through pricing arrangements, that the RCM IGST cost was built into the landed cost of goods and effectively recovered from customers through the sale price, which would disentitle the importer from a cash refund (the amount would instead go to the Consumer Welfare Fund). Importers seeking a refund therefore need to be able to demonstrate, typically through a CA certificate supported by contemporaneous costing records, that the specific RCM IGST amount was borne by the importer and not separately recovered in the price charged to customers.
Refund process and evidentiary checklist
| Requirement | What it typically needs |
|---|---|
| Identify the RCM IGST paid | GSTR-3B filings and challans showing RCM IGST paid on ocean freight for CIF imports, period-wise |
| Establish the refund basis | Reference to the Mohit Minerals ruling and the discontinuation of the RCM notification for CIF ocean freight |
| Address limitation | Legal evaluation of the relevant filing date argument applicable in your jurisdiction, and prompt filing |
| Rebut unjust enrichment | CA certificate and costing records showing the RCM IGST was not passed on to customers in the sale price |
| File the claim | Refund application under Section 54 with supporting documents, through the standard GST refund process |
Worked example
An importer of industrial raw materials paid RCM IGST of ₹6 lakh in aggregate across FY 2018-19 and FY 2019-20 on CIF ocean freight, computed at the notional 10% valuation prescribed under the relevant notification. Having not filed any refund claim at the time, the importer now, in 2026, wants to recover this amount. The importer first needs to reconstruct, from its GSTR-3B filings and RCM challans, the exact amount paid period-wise. It then needs a considered legal view on whether a claim filed now can still be treated as within limitation — given that the plain two-year window from the original payment dates has long since passed, the claim would need to rest on the argument that the relevant date should run from the Mohit Minerals ruling or a related order, which is not free from doubt and depends on the specific High Court jurisdiction and how the claim is framed. Assuming the limitation hurdle can be credibly argued, the importer separately needs a CA certificate demonstrating that this ₹6 lakh was not built into and recovered through its sale prices — typically by showing the pricing methodology used for the relevant years did not itself factor in the RCM IGST as a cost pass-through. Only once both hurdles are addressed does the claim proceed to standard refund processing.
Common mistakes and red flags
- Assuming the refund is automatic simply because Mohit Minerals struck down the levy — both limitation and unjust enrichment must still be separately satisfied.
- Filing a refund claim without first reconstructing period-wise RCM IGST payment evidence from GSTR-3B and challans.
- Treating the limitation question as settled in the importer's favour everywhere — the position genuinely varies by court and by how the claim is framed, and needs case-specific legal evaluation.
- Not preparing a CA certificate or costing evidence on unjust enrichment until Revenue raises the objection, rather than building the file upfront.
- Overlooking that only the RCM component on ocean freight for CIF imports is affected — IGST paid at customs on the CIF value of the goods itself is unrelated and not part of this refund.
What importers should do now
Businesses that imported on CIF terms during roughly FY 2017-18 to FY 2021-22 should check, as a first step, whether they in fact paid RCM IGST on ocean freight during that window and, if so, whether any refund claim has already been filed or is time-barred beyond salvage. Where an unclaimed exposure exists, the practical path is to reconstruct the payment trail, obtain a considered legal view on the limitation argument applicable to the specific filing timeline and jurisdiction, and simultaneously assemble the costing evidence needed to rebut an unjust enrichment objection before, not after, Revenue raises it. Given that both live disputes are genuinely fact- and timing-sensitive, importers should treat each refund claim as needing individual evaluation rather than assuming a uniform outcome across the industry.
Frequently asked questions
What did the Mohit Minerals judgment actually decide?
The Supreme Court in Union of India v. Mohit Minerals Pvt Ltd (2022) struck down the reverse-charge IGST levy on ocean freight for CIF imports as unconstitutional double taxation, since the freight component was already taxed as part of the customs-value-based IGST on the imported goods. It also held that GST Council recommendations are not binding on the Centre and States.
Am I still eligible for a refund of RCM IGST paid on ocean freight before Mohit Minerals?
In principle, yes, if you paid RCM IGST on ocean freight for CIF imports (typically in the FY 2017-18 to FY 2021-22 period) and have not already claimed a refund. The claim remains subject to satisfying both the limitation requirement and the unjust enrichment test under Section 54.
Has the two-year limitation period under Section 54 already expired for my old RCM payments?
It depends on how the claim is framed and which court's view applies. Some courts have treated the relevant date for limitation as the date the levy was struck down rather than the original payment date, allowing later-filed claims; this position is not uniform, so it needs a specific legal evaluation of your payment dates and intended filing timeline.
What is unjust enrichment and why does it matter for this refund?
Unjust enrichment is the requirement under Section 54 that a refund claimant show the tax was not passed on to another person, typically the end customer. Revenue may argue the RCM IGST cost was embedded in your sale price and recovered from customers; a CA certificate backed by contemporaneous costing records is generally needed to show it was not.
Does this refund also cover the IGST I paid on the CIF value of the goods at customs?
No. This refund opportunity relates only to the separate reverse-charge IGST paid on the notional ocean-freight service value. The IGST paid at customs on the CIF value of the imported goods itself is a different levy and is not affected by the Mohit Minerals ruling.
What documents do I need to support a refund claim on RCM ocean freight?
You typically need GSTR-3B filings and RCM payment challans showing the period-wise amounts paid, a reasoned legal position on limitation for your specific filing timeline, and a CA certificate with supporting costing records to rebut unjust enrichment.
If you imported on CIF terms and paid RCM IGST on ocean freight in earlier years, we can help evaluate your unclaimed refund exposure, assess the limitation position for your specific dates, and prepare the costing evidence needed to support the claim.
GST Notice Handling GST Advisory Services Talk to usThis article is general information for educational purposes, not a legal opinion on any specific case or notice. GST law, circulars and judicial positions referenced above are subject to change and to the final orders of the relevant courts and authorities; verify the current status before acting, and consult a qualified professional with your specific facts before deciding how to respond to any notice.