2025-VIL-1333-TEL
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SGST High Court Cases

GST – Supply to SEZ Unit, Refund of Unutilised Input Tax Credit of Compensation Cess – Petitioner paid Compensation Cess on the purchase of coal, which was used as an input in the manufacturing process. The petitioner made claims for refund of the unutilized ITC of the Compensation cess on zero-rated – Rejection of refund on the ground that the petitioner had exported the goods on payment of IGST whereas, as per the Circular No. 45/19/2018-GST dated 30.05.2018, a supplier cannot claim refund of compensation cess in case of zero-rated supplies made on payment of IGST - Whether the petitioner is entitled to claim refund of the unutilized input tax credit of the Compensation cess paid on the inputs (coal) used in the manufacturing of goods exported as zero-rated supplies under the Cess Act – HELD - The Gujarat Court in the cases of Patson Papers Private Limited v. Union of India and Others and Atul Limited and Another v. Union of India and Others, has held that the petitioner is entitled to claim the refund of the unutilized input tax credit of the Compensation cess paid on the inputs (coal) used in the manufacturing of goods exported as zero-rated supplies under the Cess Act - The goods exported by the petitioner were non-taxable supplies under the Cess Act, and therefore, the petitioner was not required to pay any compensation cess on such exports. In such a scenario, the petitioner is eligible to claim the refund of the unutilized ITC of Compensation cess paid on the inputs used in the manufacturing of the exported goods, which were zero-rated supplies - The impugned orders are set aside and the matter is remanded to the original authority to take a fresh decision in accordance with law after providing an opportunity of hearing to the petitioner – The Writ Petitions are disposed of
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