SEZ exemption from GST compensation cess: interpretation finds customs duty wording excludes GST compensation cess, so no exemption applies.

The text analyses whether SEZ units are exempt from GST compensation cess, distinguishing cess from general taxes and duties and explaining that exemption provisions refer specifically to duties. It notes Section 7 conditions exemption on inclusion of the relevant enactment in the First Schedule and observes the GST Compensation Act is not listed there, and that the phrase duty of customs in Section 26(1)(a) is confined to duties leviable under the Customs Act and does not encompass GST compensation cess; consequence: GST compensation cess is not covered by the SEZ duty exemption.

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Issues Involved:
1. Exemption from GST Compensation Cess for SEZ Units.
2. Maintainability of Writ Petitions due to availability of alternative remedies.
3. Interpretation of relevant provisions of SEZ Act, 2005 and GST Compensation Act, 2017.

Summary:

1. Exemption from GST Compensation Cess for SEZ Units:
The petitioners, SEZ units, claimed exemption from GST compensation cess on coal imports under Section 26 of the SEZ Act, 2005. They argued that Section 26(1)(a) of the SEZ Act exempts them from any duty of customs under the Customs Act, 1962 or Customs Tariff Act, 1975. The respondents contended that the exemption does not extend to compensation cess under the GST Compensation Act, 2017, as it is not included in the First Schedule of the SEZ Act. The court upheld the respondents' view, stating that the term "duty" in Section 26(1)(a) does not encompass "cess," and the GST Compensation Act is not listed in the First Schedule of the SEZ Act.

2. Maintainability of Writ Petitions due to availability of alternative remedies:
The respondents argued that the impugned letters were appealable orders under Section 128 of the Customs Act, 1962, and hence, the writ petitions were not maintainable due to the availability of an alternative remedy. The court noted that while alternative remedies were available, writ petitions could still be entertained if the impugned orders were issued without jurisdiction, as claimed by the petitioners.

3. Interpretation of relevant provisions of SEZ Act, 2005 and GST Compensation Act, 2017:
The court examined the provisions of the SEZ Act, 2005, particularly Sections 7, 26, and 50, which provide exemptions on taxes, duties, and cess for SEZ units. The court also analyzed the GST Compensation Act, 2017, and relevant constitutional amendments. The court concluded that the term "duty" in Section 26(1)(a) of the SEZ Act refers to customs duties under the Customs Act, 1962, and Customs Tariff Act, 1975, but does not include compensation cess under the GST Compensation Act, 2017. The court emphasized that the SEZ Act is a self-contained code, and exemptions must be derived from its provisions.

Conclusion:
The court dismissed the writ petitions, ruling that SEZ units are not exempt from paying GST compensation cess on coal imports under the current legal framework. The court also highlighted the distinction between "duty" and "cess" and the specific requirements for exemptions under the SEZ Act.

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