2025 (10) TMI 323 - SCH - GST

Special leave petition dismissed; refund of unutilised input tax credit under CGST Rule 89 for exports under LUT upheld

SC dismissed the special leave petition and refused to interfere with the impugned order directing refund of unutilised input tax credit accumulated under ... Refund of unutilised ITC accumulated under Rule 89 of CGST Rules - exports are made without payment of tax under LUT - low tax effect - HELD THAT:- Having regard to the amount which has been ordered to be refunded, it is not inclined to interfere with the impugned order. However, the question of law is kept open. SLP dismissed. The High Court, relying on its decision in 'Britannia Industries Limited vs. Union of India' (2020 (42) G.S.T.L. 3 (Guj)), accepted that an SEZ Unit is entitled to claim refund of 'unutilised ITC accumulated under Rule 89 of CGST Rules' on the ground that 'exports are made without payment of tax under LUT.' The revenue contended that the earlier Britannia challenge failed before this Court on account of low tax effect and argued that only the supplier, not the SEZ Unit, could prefer an application for such a refund. Having regard to the peculiar facts and the amount ordered to be refunded, the Court declined to interfere with the impugned order but expressly kept the 'question of law...open.' The Special Leave Petition is dismissed and pending application(s), if any, stand disposed of.