TaxTMI 
TaxTMI 
2021 (2) TMI 115
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....his appeal briefly stated are that the appellant is a unit located in Special Economic Zone (hereinafter referred to as 'SEZ' for short). The appellant is engaged in the business of software development. It is the case of the appellant that in terms of Section 20(2) of the Act, the appellant was entitled to refund of tax paid on purchase of inputs. The appellant, for the tax periods May 2012 to December 2012, made an application of refund of an amount of Rs. 28,30,481/- being tax paid on purchase of inputs, before the Assistant Commissioner of Commercial Taxes, who by an order dated 27.08.2013 granted refund to the extent of Rs. 22,82,460/- only. The refund was further reduced by the Joint Commissioner of Commercial Taxes to Rs. 20,....
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....6 (hereinafter referred to as 'the SEZ Rules' for short). Section 50 of the SEZ Act empowers the States to grant exemptions from State taxes, levies and duties to the SEZ developers and units located in SEZ. Rule 5(5) of the SEZ Rules also provides that the State shall endeavour to exempt the SEZ developers and units from State and local taxes, levies and duties on goods required for their authorized operations. It is also pointed out that in accordance with the aforesaid policy of the Central Government, the Government of Karnataka issued a Government Order dated 25.02.2002 introducing the SEZ policy and paragraph 5(2) of the aforesaid policy provides that SEZ units shall be exempted from State and local body taxes in respect of pu....
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.... of the legal provisions, had passed a detailed order on 15.07.2014 relying on a decision of Karnataka Appellate Tribunal in the case of COGNIZANT TECHNOLOGY which was subsequently affirmed by this Court in 'STATE OF KARNATAKA Vs. COGNIZANT TECHNOLOGY SOLUTIONS INDIA PRIVATE LIMITED' (2017) 98 VST 45 (KAR). It is submitted that invocation of power under Section 64 of the Act in the fact situation of the case is erroneous and cannot be justified in the eye of law. 6. On the other hand, learned Additional Government Advocate, while inviting our attention to Section 20(2) of the Act, submitted that the inputs are eligible for refund subject to restrictions contained in Section 20(2) of the Act read with Rule 130(A) of the Rules. It is....
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....essary that SEZ unit should be engaged in the activity of involving goods as output. The Joint Commissioner of Commercial Taxes has also taken note of Rule 130(A) of the Rules and has held that the aforesaid provision makes a SEZ unit or SEZ developer entitled to claim refund of input tax under Section 20(2) of the Act on the purchases made. It has also been held that no condition has been specified under Section 20(2) of the Act to claim refund. The Joint Commissioner of Commercial Taxes has also placed reliance on 'MP PORTAL INDIA WIRELESS SOLUTION Vs. COMMISSIOENR OF COMMERCIAL TAXES, BENGALURU' and has held that even though the export of software was not a taxable service, the assessee shall not be denied the CENVAT credit. 8. ....