Refund of accumulated -ITC of Compensation Cess

[Prem Choudhary]

Dear Expert

Please advice for refund provision if any for following Case:-

The manufacturer are producing Cement and Clinker under HSN-2526 and Sales within in India. Cement is taxable @28% ( SGST-14% & CGST-14%) and no any GST Compensation Cess is leviable. However in production of Cement, Coal is require to running the Kilan(generating the heat) and on procurement of Coal Cess is leviable @ ₹ 400/- per tone.

As per provision of Act, Compensation Cess can be utiliase for payment of out put Cess only. Hence Compensation Cess is going to accumulation.

Further, Whether answer will be same if manufacturer is exporting as well selling Cement and Clinker within India.

AI Summary

Compensation cess refund available when inputs bear cess but the final product is not leviable, exports treated separately.
Refund of accumulated Compensation Cess can be claimed where cess was paid on inputs but the final product (cement) is not subject to compensation cess; refund cannot be obtained by treating supplies as zero rated on payment of IGST. Refund on exports is separately admissible under the IGST framework and has been clarified by CBIC circulars.