Transitional GST refund rights preserve service tax refunds despite loss of Cenvat credit under the earlier regime.

Refund of service tax paid under the erstwhile regime was held admissible where credit could not be carried forward after GST transition. Section 142(3) of the CGST Act requires refund claims relating to amounts paid under the existing law to be dealt with under that law, with any sum found due paid in cash. The Tribunal followed prior decisions that the loss of Cenvat credit under GST does not defeat the substantive entitlement to refund of tax paid under the earlier regime, and remanded the matter to the jurisdictional authority to process the claims accordingly.

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Issues: Whether refund of service tax paid under the erstwhile regime, where credit could not be availed after transition to GST, was admissible under the transitional provisions of the CGST Act.

Analysis: The refund claim arose from tax paid under the earlier service tax law after the appointed day, when the assessees could no longer take Cenvat credit because the GST regime had come into force. The governing provision was Section 142(3) of the CGST Act, 2017, which mandates that refund claims for amounts paid under the existing law are to be disposed of under that law and any amount found due is to be paid in cash. The Tribunal followed prior decisions holding that such claims are covered by the transitional scheme and that the inability to carry forward or utilise credit in GST does not defeat the substantive right to refund of amounts paid under the erstwhile law.

Conclusion: Refund of the service tax paid under the earlier law was admissible, and the matter was remanded to the jurisdictional authority to consider and allow the refund claims in accordance with the Tribunal's findings.

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