Transitional refund of service tax on ocean freight remained prima facie admissible under the GST migration framework, subject to verification.

Refund of service tax paid on ocean freight after the GST transition was examined under the transitional refund mechanism in section 142(3) of the CGST Act. The service tax related to a pre-01.07.2017 period when CENVAT credit was otherwise available, so the claim could not be rejected merely because payment was made after GST commencement. Earlier decisions on eligibility supported the appellant's prima facie case. However, the refund claim required factual verification on several aspects and could not be finally allowed on the available record, so the matter was remitted for fresh scrutiny.

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Issues: Whether refund of service tax paid on ocean freight after 01.07.2017 could be allowed as refund of cenvat credit under section 142(3) of the Central Goods and Services Tax Act, 2017.

Analysis: The refund claim was rejected on the premise that service tax was paid after the GST regime commenced and, therefore, no cenvat credit was admissible. The payment, however, related to a period prior to 01.07.2017 when such credit was otherwise available. Since the appellant could not avail the credit after the transition, the refund mechanism under section 142(3) was applicable. The issue of eligibility had already been considered in earlier decisions relied upon by the appellant. At the same time, the refund claim required factual verification on various aspects and could not be finally granted on the available record.

Conclusion: The appellant was held to be prima facie eligible for refund, but the matter was remitted for fresh consideration and scrutiny of the refund claim.

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