SEZ unit's advance ruling application for input tax credit refund rejected as not maintainable under section 98

The AAR, Andhra Pradesh rejected an advance ruling application concerning refund of unutilized input tax credits under sections 16(1) and 16(3)(a) of IGST Act. The applicant, a SEZ unit, sought clarification on zero rating provisions and supplier status. The authority determined the application was not maintainable under section 98 of the Act since the proper officer had already initiated action on the same subject matter, which the applicant acknowledged during hearing.

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Issues involved:
1. Interpretation of provisions of CGST Act, 2017 and APGST Act, 2017 in relation to refund of Input Tax Credit (ITC) for export of goods without payment of IGST.
2. Eligibility of refund of ITC under section 16 (1) and 16 (3) (a) of the IGST Act.
3. Applicability of Rule 89 of CGST/APGST Act regarding refund application filing by supplier to SEZ unit.
4. Claiming refund of unutilized input tax credits in the scenario of zero rating of tax for SEZ.
5. Treatment of SEZ unit as a supplier to SEZ under Rule 89 (1) (a) of CGST/APGST Act.
6. Sanctioning refund claim in line with a recent Gujarat High Court decision.
7. Appropriate section and rule for filing refund application without rejection by the officer.

Analysis:
1. The Authority clarified that provisions of CGST Act, 2017 and APGST Act, 2017 are similar unless specified otherwise. The applicant, engaged in export of goods under Letter of Undertaking from SEZ unit, sought advance ruling on GST rates and refund eligibility under IGST Act.
2. The applicant claimed eligibility for refund of ITC under section 16 (1) and 16 (3) (a) of IGST Act due to zero-rated supplies made to SEZ units and exports outside India. The refund processing officer raised concerns about the application filing process under Rule 89.
3. The applicant argued that as a SEZ unit making zero-rated supplies, they should be considered as a supplier to SEZ units for refund purposes. They disagreed with the officer's view and cited the lack of distinction in the CGST Act regarding ITC eligibility for SEZ units.
4. The Authority conducted a virtual hearing and reviewed the arguments and facts presented. They noted deficiency memos issued by the jurisdictional officer and discrepancies in the application regarding the type of ruling sought.
5. Citing Section 98 of the Act, the Authority highlighted that the application might be rejected if the question raised is already pending or decided in other proceedings. Considering the actions initiated by the jurisdictional officer, the application was rejected as the subject matter was already under scrutiny.

This detailed analysis covers the issues raised in the judgment, the applicant's arguments, the officer's concerns, and the final decision based on legal provisions and proceedings.

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