SEZ Unit Wins Input Tax Credit Refund, Secured Full Reimbursement with 6% Interest Under IGST Act Section 16

HC allowed SEZ unit's refund application for unutilized Input Tax Credit, overturning respondent's rejection. Based on precedent cases, the court directed the 1st respondent to refund specific amounts with 6% interest within 60 days. The judgment affirmed SEZ units' right to file refund applications under IGST Act, contrary to the respondent's initial stance.

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Issues:
The judgment involves the rejection of a refund application by a petitioner, who is a Special Economic Zone (SEZ) unit, for the assessment years 2020-2021 and 2021-2022, challenging the orders passed by the 1st respondent.

Refund Application Rejection:
The petitioner, a SEZ unit, filed a refund application for unutilised Input Tax Credit due to zero-rated supplies under the IGST Act. The application was rejected by the respondent on the basis that only the supplier of service, not the SEZ unit, is entitled to file the refund application as per Rule 89 of the CGST Rules, 2017.

Legal Arguments:
The respondents contended that as a SEZ unit, the petitioner is not entitled to file the refund application, and only the supplier of the SEZ unit can do so. The rejection of the refund application was justified based on this argument.

Precedent Cases:
Both parties referred to previous judgments of the court where SEZ units were allowed to file refund applications. Citing cases like Platinum Holdings Private Limited vs. Additional Commissioner of GST and Central Excise and M/s. ATC Tires Private Limited vs. Joint Commissioner of GST and Central Excise, the court found precedent for allowing the present writ petitions.

Judgment:
In line with previous court decisions, the High Court set aside the impugned orders and allowed the refund application filed by the petitioner. The 1st respondent was directed to refund specific amounts for the respective periods along with 6% interest per annum within 60 days. The writ petitions were allowed with no costs, and connected miscellaneous petitions were closed.

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