Refund of C.Cess paid on coal for manufacturing of coke

[Karan Agarwal]

Dear all

Coal is the input for manufacturing of Coke.Coal attracts GST @ 5% and @ 400/- per MT as Compensation Cess whereas the rate of GST in case of coke is 5%.

As a manufacturer of coke, it is felt that, we are incurring loss to the extent of amount paid as Compensation cess as C.Cess is not leviable on supply of Coke.Unlike,in Central excise regime, can C.Cess is equatable with tax and the provisions of Section 54 of the CGST Act, 2017 be supportive for claiming refund of such C. Cess .

Please share the view

AI Summary

Compensation cess creditability limited: no refund for input cess used in cess exempt output, except possible refund on export under LUT.
Compensation cess on coal used to make cess exempt coke is not eligible for input credit and refunds are unlikely for domestic supplies; however, where exports are made under a Letter of Undertaking, cess credit and refund may be available. Pre GST decisions treating some cesses as duties and distinctions between tax and cess are relevant to arguments but do not change the basic GST treatment.