2026-VIL-119-GSTAT-AGR
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  2. 2026-VIL-119-GSTAT-AGR

SGST Tribunal

GST - Availability of Input Tax Credit for service tax refunded to buyers on cancellation of bookings - Appellant contended that the service tax paid on cancelled bookings is refundable and Section 142(5) of CGST Act, 2017 is only an enabling provision which does not bar self-adjustment through the electronic credit ledger - Department contended refund of previously paid service tax is specifically provided for under sub-section 5 of Section 142 of the Act, and that a taxpayer cannot create its own mechanism for such refund - Whether service tax deposited under the erstwhile Finance Act, 1994 on advance received for booking of residential flats, and subsequently refunded to buyers along with the advance upon cancellation of bookings after the appointed date under the CGST Act, can be claimed as Input Tax Credit under the CGST/SGST Act and adjusted against GST liability - HELD - Service tax deposited by the taxpayer under the existing law, namely the Finance Act, 1994, does not fall within the definition of input tax under the Act and its credit cannot therefore be claimed as input tax credit - The transitional provisions under sub-section 5 of Section 142, govern refund of tax paid under the existing law in respect of services not ultimately provided, and any such claim must be disposed of in accordance with the existing law with the amount eventually accruing being paid in cash - Since the services promised through the bookings were not ultimately provided, the refund of the service tax deposited has to be dealt with under the existing law, and the taxpayer cannot avail ITC as a mode of refund nor unilaterally pass an entry in the electronic credit ledger to absorb or adjust such refund claim without explicit statutory sanction - The impugned order of the FAA is in compliance with the legal provisions and upheld - The appeal is dismissed
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