2025-VIL-1083-GUJ
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SGST High Court Cases

GST - Section 54(3) of the CGST Act, 2017 - SEZ unit, Refund of unutilised IGST credit distributed by ISD - As an SEZ unit, petitioner receives input services which are proportionately distributed by the Input Service Distributor. The petitioner, being a zero-rated supplier, was unable to utilize the input tax credit (ITC) lying in its Electronic Credit Ledger and hence filed refund applications under Section 54(3) of the CGST Act, 2017. The refund applications were initially allowed by the Assistant Commissioner, but later set aside by the Appellate Authority - Whether the SEZ unit is eligible to refund of input tax credit on the services received while making zero rated supply - HELD - This Court in its earlier judgment in the case of Britannia Industries Limited v. Union of India, held that the ISD, as defined under Section 2(61) of the CGST Act, is an office of the supplier of goods and services which receives tax invoices and distributes the credit of IGST paid on such goods or services. Therefore, in the facts of the present case, it is not possible for the supplier of goods and services to file a refund application to claim the refund of the ITC distributed by the ISD. The stance of the department that the petitioner is not entitled to seek the refund of the ITC paid in connection with goods or services supplied to SEZ unit is not tenable - The ratio laid down in the Britannia Industries case is not disturbed and there is no stay against the order. Accordingly, the ration laid down by this Court in the case of Britannia Industries Ltd squarely applies to facts of present case, and therefore, the petition succeeds and is accordingly allowed
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