TaxTMI 
TaxTMI 
2026 (9) TMI 725
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....ner was utilised while paying taxes on the export of services. Asserting that the supplies made by the petitioner qualify as zero-rated supplies, the petitioner applied for a refund in relation to multiple assessment periods. These applications were rejected under orders impugned herein. 2. Learned senior counsel for the petitioner referred to the definition of zero-rated supply under Section 16 of the Integrated Goods and Services Tax Act, 2017 (the IGST Act) and contended that export of services falls within the scope of Section 16(1)(a). Adverting to Section 54, he contended that an SEZ unit is entitled to claim a refund if taxes are paid on exports. He also contended that there is no prohibition applicable under GST legislation preventing an SEZ unit from availing of credit, including from an Input Service Distributor. After asserting that such credit was distributed by the Input Service Distributor fully in compliance with Section 20 of the Central Goods and Services Tax Act, 2017 (the CGST Act), he contended that the refund applications were not liable to be rejected by relying on the proviso to Rule 89(1) of applicable Rules. In particular, he contended that said proviso ....
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....nd Services Tax Act, 2017 (the IGST Act). Sub-Section (3) thereof enables a registered person making zero-rated supply to claim refund. Section 16 is set out below: Section 16. Zero rated supply.- (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 zero-rated 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 Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of untilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, s....
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....d on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent of the total amount so claimed, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under sub-section (5) for final settlement of the refund claim after due verification of documents furnished by the applicant. 8. On examining Section 54, it appears that the petitioner's application for refund falls within the scope of sub-section (1). The procedure pertaining to a refund claim under Section 54 is prescribed in Rule 89 of the CGST Rules. Rule 89, in relevant part, reads as under: Rule 89. Application for refund of tax, interest, penalty, fees or any other amount.- (1) Any person, except the persons covered under notification issued under section 55 claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49 or any tax, interest, penalty, fees or any other amount p....
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....efund of the input tax credit. Rule 89 of the CGST Rules provides for procedure for application for refund of tax, interest, penalty, fees and prescribes that in respect of supplies to a SEZ unit, the application for refund has to be filed by the supplier of goods or services. The contention of the respondents that as the petitioner is not the supplier of the goods and services, the petitioner would not be entitled to file application for refund is not tenable because in facts of the present case input service distributor i.e., ISD as defined under Section 2(61) of the CGST Act is an office of the supplier of goods and services which receives tax invoices issued under Section 31 of the CGST Act towards the receipt of input services and issues a prescribed document for the purpose of distributing the credit of CGST, SGST or IGST paid on such goods or services. Therefore, in facts of the case, it is not possible for a supplier of goods and services to file a refund application to claim the refund of the input tax credit distributed by ISD. Therefore, the stance of the department that the petitioner is not entitled to seek the refund of the ITC paid in connection with goods or service....
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....spute makes it clear that a registered person who makes a "Zero Rated Supply" as defined in Section 2(23) of the IGST Act, 2017 r/w. Section 16 of the said Act is eligible to claim refund of tax paid, in accordance with the provisions of Section 54 of the CGST Act or the rules made thereunder and subject to such conditions, safeguards and procedure as may be prescribed under either of the following two situations: (a) Where there is a supply goods or services or both under "bond" or "Letter of Undertaking", subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilized input tax credit; or (b) Where there is a supply of goods or services or both on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, subject to such conditions, safeguards and procedure as may be prescribed. 26. In the present case, the petitioner is a recipient of certain input services from its own sister concern and its Head Office. Hence, the petitioner is eligible to avail Input Tax Credit (ITC) passed on which was utilized. The supplying units of the petitioner h....