TaxTMI 
TaxTMI 
2023 (3) TMI 56
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....er of the petitioner. The petitioner filed refund application in Form GST RFD-01 on 28.9.2020 for the period of September 2018 to December 2019 for the amount of Rs.8,88,079/- in relation to such unutilized Input Tax Credit (`ITC' for short). It was done under the category of `Export of Goods/Services without payment of tax'. The application had been moved under Section 54(3) of the Central Goods and Services Tax Act, 2017 (`CGST' Act for short) and Rule 89(4) of the Central Goods and Services Tax Rules, 2017 (`CGST Rules' for short). 3. The show cause notice was issued on 28.10.2020, reply to which had been given by the petitioner. The Assistant Commissioner, on 23.11.2020, rejected the refund claim of the petitioner vide Order in Original No.GSTD-VII/Vad-I/AC/Ref/04/SE Forge/2020-21 dated 23.11.2020. 4. Aggrieved, the petitioner preferred appeal before the Commissioner, CGST and Central Excise (Appeals), Vadodara, which rejected the appeal on 3.2.2021 vide OIA No.VAD-CGST-001-APP-ADC-107-2020- 21. 5. Another refund application dated 12.3.2022 in Form GST RFD-01 vide ARN AA2403220420117 for the period of January-2020 to November-2021 amounting to Rs.22,64,582/- has been m....
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....he petitioner's unit is located in SEZ and enjoy the special status under the Special Economic Zone Act, 2005, (`SEZ Act' for short) where other benefits are extended as per the provisions of law including the benefit of tax free supply from suppliers located in Domestic Tariff Area (`DTA' for short) under the CGST and IGST and Rules made thereunder. 9. According to the respondent, the petitioner has received the supplies from DTA unit on which DTA unit charges GST. The petitioner filed refund claim dated 28.9.2020 under the category of `Export of goods/service without payment of tax of unutilized Input Tax Credit for the period from September, 2018 to December, 2019 amounting to Rs.8,88,079/- before the respondent no.3. The rejection of the refund claim on 23.11.2020 is after following principle of natural justice. The appeal has been filed against the order dated 23.11.2020 before the respondent, which after following due process, is rejected. The appellate authority upheld the order issued by respondent no.1. 10. It is further contended that the petitioner filed refund claim amounting to Rs.22,64,582/- for same purpose for the period from January, 2020 to November, 2021, w....
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....ibutor (ISD) for the services pertaining to the SEZ units as it is not possible for a supplier of services to file a refund application to claim the refund of the Input Tax Credit (ITC) distributed by the ISD. As per Section 2(61) of CGST Act, 2017, Input Service Distributor means : (a) It is the office of supplier of goods and/or services (b) The said office receives tax invoices towards receipt of input services (c) The said office distributes credit of CGST/SGST/IGST/UTGST to a supplier of goods/services having same PAN (d) The said office issues tax invoice or other prescribed documents for distribution of credit. A supplier of goods/services may have various offices such as head office, registered office, regional office, marketing office, branch, godown, sales depot etc., which avail various input services such as security services, communication charges, courier expenses, housekeeping expenses to name a few, and pay service tax. Such units and premises may obtain registration as an Input Service Distributor for availment of credit on such input services and distribution of credit to other units to resolve the challenge of efficient utilization of accumulated credit. A sole S....
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....rthermore, if any such eventuality is noticed, it has taken the responsibility for the refund of amount. This is squarely covered by the decision of this Court in M/s. Britannia Industries versus Union of India (Coram : J.B. Pardiwala,J (as His Lordship then was) and Bhargav Karia,J), where the petitioner unlimited company had filed that petition through their Director and it was situated in SEZ. It filed an application for refund in Form GSTRF3018 with regard to the credit of integrated goods and service tax distributed by the Input Service Distributor (`ISD' for short) for the services pertaining to the SEZ unit. It was also the case of the petitioner that since it was a SEZ unit making zero rated supplies under the GST, was not in a position to utilize the credit of ITC of IGST from its IST, which remained unutilized in electronic credit ledger and hence, the application to claim such refund was made. The same has been dealt with by the Court extensively. The Court has not upheld the stance of the department that the petitioner would not be entitled to seek the refund of the ITC paid in connection with the goods or services supplied to the SEZ unit. So, the relevant findings and....
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....y paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or installments, the registered person shall be entitled to take credit upon receipt of the last lot or installment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed: Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. (3) Where the registered person has claimed depreciation on the tax c....
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....the Council: Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. Xxx" Integrated Goods Service Tax Act,2017 16. (1) "zero rated supply" means any of the following supplies of goods or services or both, namely:- (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zerorated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:- (a) he may supply goods or services or both under bond or Le....
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....y the applicant out of the advance tax deposited by him under section 27 at the time of registration, shall be claimed in the last return required to be furnished by him. Explanation.- For the purposes of this rule- (i) in case of refunds referred to in clause (c) of subsection (8) of section 54, the expression "invoice" means invoice conforming to the provisions contained in section 31; (ii) where the amount of tax has been recovered from the recipient, it shall be deemed that the incidence of tax has been passed on to the ultimate consumer. (3) Where the application relates to refund of input tax credit, the electronic credit ledger shall be debited by the applicant by an amount equal to the refund so claimed. (4) In the case of zero-rated supply of goods or services or both without payment of tax under bond or letter of undertaking in accordance with the provisions of sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), refund of input tax credit shall be granted as per the following formula - Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero rated supply of s....
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....iled in respect of other inputs or input services used in making zero-rated supply of goods or services or both, shall be granted. (4B) Where the person claiming refund of unutilised input tax credit on account of zero rated supplies without payment of tax has - (a) received supplies on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1320 (E), dated the 23rd October, 2017 or notification No. 41/2017-Integrated Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1321(E), dated the 23rd October, 2017; or (b) availed the benefit of notification No. 78/2017- Customs, dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R 1272(E), dated the 13th October, 2017 or notification No. 79/2017-Customs, dated the 13th October, 2017, published in the Gazette of India, Extraordin....
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....amount so determined will have to be credited to the Fund referred to in Section 57 of the CGST Act, 2017. 26. Rule 96 of the CGST Rules provides for a deeming fiction. The shipping bill that the exporter of goods may file is deemed to be an application for refund of the integrated tax paid on the goods exported out of India. Section 54 referred to above should be read along with Rule 96 of the Rules. Rule 96(4) makes it abundantly clear that the claim for refund can be withheld only in two circumstances as provided in subclauses (a) and (b) respectively of clause (4) of Rule 96 of the Rules, 2017. 27. In the aforesaid context, the respondents have fairly conceded that the case of the writ-applicant is not falling within sub-clauses (a) and (b) respectively of clause (4) of Rule 96 of the Rules, 2017. The stance of the department is that, as the writ-applicant had availed higher duty drawback and as there is no provision for accepting the refund of such higher duty drawback, the writ-applicant is not entitled to seek the refund of the IGST paid in connection with the goods exported, i.e. 'zero rated supplies'. 28. If the claim of the writ-applican....
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....e Board are not binding on the assessee but are binding on revenue authorities. It was submitted that once the Board issues a circular, the revenue authorities cannot take advantage of a decision of the Supreme Court. The consequences of issuing a circular are that the authorities cannot act contrary to the circular. Once the circular is brought to the notice of the Court, the challenge by the revenue should be turned out and the revenue cannot lodge an appeal taking the ground which is contrary to the circular. 6. Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the Court to declare what the particul....
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....r proper administration of fiscal law, so that undue hardship may not be caused. Circulars are binding on the authorities administering the enactment but cannot alter the provision of the enactment, etc. to the detriment of the assessee. Needless to emphasise that a circular should not be adverse and cause prejudice to the assessee. (See : UCO Bank, Calcutta v. Commissioner of Income Tax, West Bengal - (1999)4 SCC 599. 26. In Commissioner of Central Excise, Bolpur v. Ratan Melting and Wire Industries - (2008)13 SCC 1, it has been held that circulars and instructions issued by the Board are binding on the authorities under respective statute, but when this Court or High Court lays down a principle, it would be appropriate for the Court to direct that the circular should not be given effect to, for the circulars are not binding on the Court. In the case at hand, once circular dated 15.04.1994 stands withdrawn vide circular dated 16.04.2001, the appellant-assessee cannot claim the benefit of the withdrawn circular. 27. The controversy herein centres round the period from 1st April, 2001 to 31st March, 2002. The period in question is mostly post the circular dated 16.....
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....be repelled and we do so. We hold that it would certainly not apply to the notification dated 21.01.2000." 34. We take notice of two things so far as the circular is concerned. Apart from being merely in the form of instructions or guidance to the concerned department, the circular is dated 9th October 2018, whereas the export took place on 27th July 2017. Over and above the same, the circular explains the provisions of the drawback and it has nothing to do with the IGST refund. Thus, the circular will not save the situation for the respondents. We are of the view that Rule 96 of the Rules, 2017, is very clear. 35. In view of the same, the writ-applicant is entitled to claim the refund of the IGST. 36. In the result, this writ-application succeeds and is hereby allowed. The respondents are directed to immediately sanction the refund of the IGST paid in regard to the goods exported, i.e. 'zero rated supplies', with 7% simple interest from the date of the shipping bills till the date of actual refund." 21. In facts of the present case, instead of Rule 96 as was applicable in case of M/s. Amit Cotton Industries(supra), Rule 89 would be appli....