TaxTMI 
TaxTMI 
2025 (1) TMI 1856
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....he Impugned Common Order-in-Appeal Nos.62 and 63 of 2021 dated 27.04.2021 is extracted below :- "11. Thus, proof of receipt of goods or services as evidenced by the specified officer of the zone is a pre-requisite for filing of refund claim by the DTA supplier. The claim for refund when made for supplies made to SEZ Unit/Developer has to be filed along with the prescribed documents. Further, no proof has been given by the appellant to the effect that their suppliers have not claimed any refund within their jurisdictional GST authorities. 12. It could be seen that the entire procedure is stipulated for a person having GST Registration making a zero-rated supply is eligible to claim GST refund in accordance with the provisions of the CGST Act, 2017 when the option of supply of goods or services with payment of integrated tax is exercised under claim of GST refund on tax paid. 13. A harmonious reading of Section 54(3) of the CGST Act, 2017 and Section 16 & 2(5) of the IGST Act, 2017 reveals that any person doing exports is eligible to claim refund of ITC; that the second proviso to Rule 89(1) of CGST Rules, 2017 unambiguously stipulates that refund shall be ....
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....ioner would submit that the tax was paid by mistake by the supplier on the supplies made by the petitioner and since the petitioner is a SEZ unit, it is not expected to be burdened with tax liability and therefore the petitioner is entitled for refund in terms of Section 54(1) of the CGST Act read with Explanation 2(g) to Section 54(14) of the CGST Act. 9. Learned counsel for the petitioner also drew attention to Rule 89 of the Central Goods and Service Tax (CGST) Rules, 2017 to state that merely because the supply in the hands of the supplier to the petitioner was a zero rated sale and exempted supply ipso facto would not mean that the petitioner was not entitled to refund of tax paid by the suppliers and borne by the petitioner. 10. On the other hand, learned Senior Panel Counsel for the respondents would submit that the Impugned Order of the Appellate Commissioner dismissing the appeals of the petitioner does not merit any interference and therefore these Writ Petitions are liable to be rejected. 11. Defending the Impugned Order, the learned Senior Standing Counsel for the respondents on the other hand would submit that the Impugned Order dated 27.04.2021 upholding the ....
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....e IGST Act, 2017, any supply made to SEZ unit is zero-rated. In case, a supplier opts to pay tax on the supply to a unit in SEZ, it is the supplier who is eligible to claim refund. Similarly, Rule 89 of the CGST Rules, 2017 prescribes refund application to be made by the supplier in case of supplies to SEZ be made by the supplier. Considering these provisions, it is submitted that sanction of refund of amounts to SEZ is not available as Rule 89 of the CGST Rules, 2017 provides refund only to the supplier of goods or services to claim refund in case of supplies made to SEZ. 18. It is further submitted that under Rule 89(2)(f) of the CGST Act, 2017, the refund is available to the supplier only if tax has not been collected from the Special Economic Zone Unit or the Special Economic Zone developer, in a case where the refund is on account of supply of goods or services or both to a Special Economic Zone Unit or to the Special Economic Zone. Therefore, it is submitted that refund can be claimed by SEZ developer. 19. It is submitted that a conjoint reading of all the above provisions undoubtedly point towards a conclusion that SEZ unit/developers cannot claim any refund if the sup....
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.... 2022 (4) TMI 1194 wherein a reference was made to the decision of this Court rendered in Platinum Holdings Private Limited Vs. Additional Commissioner of GST and Central Excise (Appeals-II), 2021 (10) TMI 630 and the subsequent decision of this Court rendered in Thryve Digital LLP Vs. The Joint Commissioner (Appeals-II) and others, 2023 (12) TMI 594. 26. At the outset, it has to be stated that these 3 decisions are not directly applicable to the facts of the present case. Nevertheless, I am of the view that the refund of taxes paid by the supplier on the supplies effected to the petitioner are to be allowed in view of the special dispensation under the Special Economic Zone Act, 2005 [SEZ Act, 2005], subject to a factual determination that the supplier of goods has not availed the benefit of refund under the provisions of the IGST Act, 2017 and the CGST Act, 2017 as the supply of goods and service are exempt from payment of tax both under IGST Act, 2017 and the SEZ Act, 2005, it being a special enactment. I shall explain the position. 27. The provisions of the SEZ Act, 2005 have an overriding effect over the other enactments. This is evident from a reading of Section 51 of t....
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....he SEZ Act, 2005, it can be read as under :- (a) (b) (c) Exported out of, or Imported into, or Procured from a Domestic Traffic Area (DTA) by a (a) (b) (c) (i) a unit in a Special Economic Zone: or (ii) a Developer of Special Ecomonic Zone 31. For the sake of clarity, Section 7 of the SEZ Act, 2005 is also reproduced below :- "7. Exemption from taxes, duties or cess :- Any goods or services exported out of, or imported into, or procured from the Domestic Traffic Area by, (i) a Unit in a Special Economic Zone; or (ii) a Developer, shall, subject to such terms, conditions and limitations, as may be prescribed, be exempt from enactments specified in the First Schedule." 32. Thus, under Section 7 of the SEZ Act, 2005, there is exemption from payment of taxes, duties or cess under the enactments specified in the 1 st schedule to the Act, which is subject to such terms and conditions as may be prescribed under the Act. It has to be borne in mind that SEZ Act is an enactment which was enacted in 2005. At that point of time, independently other incentives were already operating in the Central E....
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....n in Section 17(5) of the CGST Act, 2017. Section 17(5) of the CGST Act, 2017, prescribes limitation for availing of Input Tax Credit by the supplier. For the sake of clarity, Section 16(2) of the IGST Act, 2017 and Section 17(5) of the CGST, 2017 are reproduced below :- Section 16(2) of the IGST Act, 2017 Section 17(5) of the CGST Act, 2017 (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. (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely :- [(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely :- A) further supply of such motor vehicles; or B) transportation of passengers; or C) imparting training on driving such motor vehicles; (aa) vessels and aircraft exc....
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....other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation: For the purposes of clauses (c) and (d), the expression "construction" includes re- construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property; (e) goods or services or both on which tax has been paid under section 10; (f) goods or services or both received by a non-resident taxable person except on goods imported by him; [(fa) goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013 (18 of 2013);] (g) goods or services or both used for personal consumption; (h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and (i) any tax paid in accordance with the provisions of sections 74, 129 and 130. 39. In this case, the dispute is not relating to limitation under Section 17(5) of the CGST Act, 2017. Therefore, we nee....
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.... ii. A class of goods or services which may be exported on payment of integrated tax and the supplier of such goods or services may claim the refund of tax so paid." 44. The aforesaid provisions are thus intended to facilitate a supplier making supply of goods or services to claim refund of unutilised input tax credit on supply of goods or services or both to the either to a "Special Economic Zone Developer" and/or a "Special Economic Zone Unit", without payment of integrated tax, under bond or letter of undertaking in accordance with the provisions of Section 54 of the CGST Act, 2017. The said notification Came into force with effect from the 1st day of October, 2023. Relevant portion of the above Notification reads as under :- "In exercise of the powers conferred by sub-section (4) of section 16 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) (hereafter referred to as the "said Act"), the Central Government on the recommendations of the Council, hereby notifies all goods or services (except the goods specified in column (3) of the TABLE below) as the class of goods or services which may be exported on payment of integrated tax and on which the suppl....
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.... be deemed to have been substituted with effect from the 1st day of October, 2023, namely :- "(i) all goods or services (except the goods specified in column (3) of the TABLE below) as the class of goods or services which may be exported on payment of integrated tax and on which the supplier of such goods or services may claim the refund of tax so paid; and (ii) all suppliers to a Developer or a unit in Special Economic Zone undertaking authorised operations as the class of persons who may make supply of goods or services (except the goods specified in column (3) of the TABLE below) to such Developer or a unit in Special Economic Zone for authorised operations on payment of integrated tax and on which the said suppliers may claim the refund of tax so paid:" Explanation. - For the purpose of this clause :- (i) the term "authorised operations" shall have the same meaning as defined in clause (c) of Section 2 of the Special Economic Zone Act, 2005 (28 of 2005), (ii) the term "Developer" shall have the same meaning as defined in clause (g) of Section 2 of the Special Economic Zone Act, 2005 (28 of 2005), (iii) the term "Special Econ....
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....of goods shall, in case of non-realisation of sale proceeds, be liable to deposit the refund so received under this sub-section along with the applicable interest under section 50 of the Central Goods and Services Tax Act within thirty days after the expiry of the time limit prescribed under the Foreign Exchange Management Act, 1999 (42 of 1999) for receipt of foreign exchange remittances, in such manner as may be prescribed. Section 16(4)(i) of IGST, 2017 (4) The Government may, on the recommendation of the Council, and subject to such conditions, safeguards and procedures, by notification, specify- i. a class of persons who may make zero rated supply on payment of integrated tax and claim refund of the tax so paid. ii. A class of goods or services which may be exported on payment of integrated tax and the supplier of such goods or services may claim the refund of tax so paid. 54. Refund of tax .- (1) ...... (2) ...... (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be a....
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.... be, the inputs or input services used in such supplies, the due date for furnishing of return under section 39 in respect of such supplies.] (c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of- i. receipt of payment in convertible foreign exchange [or in Indian rupees wherever permitted by the Reserve Bank of India], where the supply of services had been completed prior to the receipt of such payment; or ii. issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice; (d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction; (e) [in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises;] (f) in t....
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....from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub- section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed. (2) ..... (3) ...... (14) Notwithstanding anything contained in this section, no refund under subsection (5) or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees. Explanation .- For the purposes of this section,- (1) refund includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3). (2) relevant date means- (a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,- (i) if the goods are exported by sea or air, the date o....
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.... may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub- section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub- section (2) substituted by that Act :] [Provided further that] the limitation of [one year] shall not apply where any duty has been paid under protest. (2) If, on receipt of any such application, the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] is satisfied that the whole or any part of the duty of excise paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund : Provided that the amount of duty of excise as determined by the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] under the foregoing prov....
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....of any notification issued under clause (f) of doubts, it is hereby declared that the first proviso to sub-section (2), including any such notification approved or modified under subsection (4), may be rescinded by the Central Government at any time by notification in the Official Gazette.] [Explanation. - For the purposes of this section, - (A) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (B) "relevant date" means, - (a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods, - (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or (ii) if the goods are exported by land, the date on which such goods pass the frontier, or (iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India; (b) in the case of goods r....
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....lanation .- For the purposes of this sub-section, "the date of payment of duty or interest" in relation to a person, other than the importer, shall be construed as "the date of purchase of goods" by such person. (1A) The application under sub-section (1) shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty or interest, in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty or interest, has not been passed on by him to any other person. (1B) Save as otherwise provided in this section, the period of limitation of one year shall be computed in the following manner, namely :- (a) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 25, the limitation of one year shall be computed from the date of issue of such order; (b) where the duty becomes refundable as a consequence of any judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year shall be computed from the date ....
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....ed in sub-section (2). (4) Every notification under clause (f) of the first proviso to subsection (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its reassembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder. (5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to subsection (2), including any such notification approved or modified under sub section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette. SECTION 27A. Interest on delayed refunds. - ....
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....y to any other person. 57. The definition of "relevant date" in clause B(e) to Explanation to Section 11 of the Central Excise Act, 1944, also makes it clear that refund can be made by a person, other than the manufacturer, the date of purchase of the goods by such person in the case of goods which are exempt from payment of duty. 58. Similarly, under Section 27(1)(b) of the Customs Act, 1962, any person who has borne incidence of duty can file a refund claim before expiry of one year from the date of payment of duty or interest. As per Explanation to Section 27(1) of the Customs Act, 1962, in relation to a person, other than the importer, the date of payment of duty or interest shall be the date of purchase of goods by such person. 59. Clause (f) to Section 27(2) of the Customs Act, 1962, the amount of duty and interest, if any, paid on such duty as determined by the Assistant Commissioner of Customs or Deputy Commissioner of Customs under Section 27(1) of the said Act shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to the duty and interest, if any, paid on such duty borne by any other such class of applicants as the Cen....