TaxTMI 
TaxTMI 
Can one claim refund of unutilised input tax credit of compensation cess paid on coal purchase, in application for inverted duty structure along with CGST and SGST refund.
REFUND OF COMPENSATION CESS IN INVERTED DUTY STRUCTURE
09 Sep 2018 
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Compensation cess refund limited: available only for zero-rated exports under bond/LUT; not for inverted duty or IGST-paid exports.
Refund of unutilised compensation cess on inputs (e.g., coal) is not available where input cess can only be utilised against output cess; refunds are disallowed for exports where IGST is charged. Refund is permitted only for zero-rated exports effected under bond/LUT (no tax payment), and taxpayers should treat nonrefundable cess as a material cost, report it in GSTR-3B, and consider advance ruling only for clarity where circular guidance is inconclusive. (AI Summary)
Refund of unutilised compensation cess on inputs (e.g., coal) is not available where input cess can only be utilised against output cess; refunds are disallowed for exports where IGST is charged. Refund is permitted only for zero-rated exports effected under bond/LUT (no tax payment), and taxpayers should treat nonrefundable cess as a material cost, report it in GSTR-3B, and consider advance ruling only for clarity where circular guidance is inconclusive. (AI Summary)