TaxTMI 
TaxTMI 
Dear sirs, ITC is claimed of compensation cess paid on eligible input used for the manufacturing of final product. Compensation cess levy is not applicable to the said final product. If we export the final product on payment of tax to claim the refund of GST u/r 96, how we can claim the refund of accumulated compensation cess attributable to export. Since cess is not levied on final product we cannot pay while filing refund u/r 96 thru shipping bill. Please guide
Refund of compensation cess u/r 96 when final product is not chargeable to cess
20 Jan 2025 
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Compensation cess refund when final product non leviable: seek refund via statutory cess refund route rather than shipping bill mechanism.
Where final goods are not leviable to compensation cess, accumulated cess credit attributable to exports may not be utilizable via the shipping bill route when exports are effected on payment of tax; exporters should instead pursue refund of accumulated cess credit through the dedicated statutory refund procedure for cess credits, while exports under LUT allow direct claim of cess refund. Circular guidance preserves zero-rated status for exports under either route but limits use of cess credit to payment of cess on outward supplies. (AI Summary)
Where final goods are not leviable to compensation cess, accumulated cess credit attributable to exports may not be utilizable via the shipping bill route when exports are effected on payment of tax; exporters should instead pursue refund of accumulated cess credit through the dedicated statutory refund procedure for cess credits, while exports under LUT allow direct claim of cess refund. Circular guidance preserves zero-rated status for exports under either route but limits use of cess credit to payment of cess on outward supplies. (AI Summary)