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 Rule 89 of the CGST Rules in respect of exports made under LUT without payment of tax. The Court observed that, having regard to the refund amount, interference was not warranted, while expressly leaving the question of law open.

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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.

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