STPI Unit Refund with payment of tax 96(10)

[Abhijeet Mane]

Hi Team, Whether STPI unit can claim refund with payment of tax if they are claiming Customs Duties (BCD+IGST+Cess) as per NN 50/2003. Because Rule 96 (10) does not directly mention about NN 50/2003 and talk about NN 78/2017 which only Cover EOU units. Hence please clarify the position.

[Vijay kumar]

STPI unit can apply for refund under Rule 96. There is no bar u/r 96(10). This is basically because STPI units are into software exports and are service incentive which is the manpower of such unit, which is procured in India whereas import could be limited to goods like laptops etc. On the other hand, the bar on EOUs is because they are manufacturing units and are input/ goods-incentive which are imported without payment of IGST. 

[Shilpi Jain]

Notification 78/2017 or 79/2017 do amend the notification 50/2003.

So if you are claiming benefit of notification 50/2003-Cus then you are barred from claiming refund under 96(10). 

However, do also have a look at a recent HC decision which states that applying u/r 96(10) merely should not deny refund. Dept can re-calculate u/r 89(4) and give the eligible refund.

[KASTURI SETHI]

In this context, it is worth while to go through the Madras High Court judgement dated 01.07.2024 in the case of Shobika Impex Pvt. Ltd. Vs. UOI & Others - 2024 (7) TMI 1107 - MADRAS HIGH COURT

AI Summary

GST refund eligibility when customs notification benefits are claimed: overlap may bar refunds unless recalculation restores eligibility. Whether STPI units claiming customs notification relief can also obtain a GST refund with payment of tax hinges on whether the refund bar for beneficiaries of customs notifications applies to STPI units; one view distinguishes STPI service exports from manufacturing EOUs and finds no express bar, while another notes amendments to customs notifications may preclude refunds, and departmental recalculation procedures should be used rather than automatic denial.