2021 (6) TMI 19 - Commissioner - GST

100% EOU - Refund of unutilized Input Tax Credit - denial on the ground that the claimant has failed to give prior intimation in a prescribed proforma in Form A i.e. bearing a running serial number - procurement of Goods and Services, which were used for export of goods/services without payment of Tax - HELD THAT - The question of deemed export arises as the appellant is 100% EOU and supplies of goods received by them is treated as deemed export. The deemed export refer to supplies of goods manufactured in India, which are notified as deemed export under Section 147 of the CGST Act, 2017. Certain supplies of goods by a registered person to export oriented unit have been notified as deemed export supplies vide Notification No. 48/2017-Central Tax, dated 18-10-2017 - Rule 89 of the CGST Rules, 2017 as amended vide Notification No. 47/2017-Central Tax, dated 18-10-2017 allow either the recipient or supplier of deemed export supplies to claim the refund of tax paid thereon, where the recipient does not avail of Input Tax Credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund. Para 41 of Circular No. 125/44/2019-GST, dated 18-11-2019 it is also clarified that the procedure regarding procurement of supplies of goods from DTA by Export Oriented Unit (EOU)/Electronic Hardware Technology Park (EHTP) Unit/Software Technology Park (STP) Unit/Bio- Technology Parks (BTP) Unit under deemed export as laid down in Circular No. 14/14/2017- GST, dated 6-11-2017 needs to be complied with. Thus, the appellant was required to follow the procedure as prescribed under Circular No. 14/14/2017- GST, dated 6-11-2017 but they failed to do so. Since, the appellant has failed to follow the procedure and not complied the conditions as prescribed under the said circular, they are not eligible for refund. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Rejection of refund claims under Section 54 of the CGST Act, 2017.
2. Compliance with Circular No. 14/14/2017-GST, dated 6-11-2017.
3. Timeliness of refund application submission.

Issue-Wise Analysis:

1. Rejection of Refund Claims:
The appellant, an Export Oriented Undertaking (EOU) engaged in manufacturing and exporting jewelry, filed refund claims for unutilized Input Tax Credit (ITC) accumulated on procurement of goods and services used for export without payment of tax. The adjudicating authority rejected these refund claims on the grounds of non-compliance with procedural requirements as outlined in Circular No. 14/14/2017-GST, dated 6-11-2017. Specifically, the appellant failed to provide prior intimation in the prescribed proforma "FORM-A" containing the goods to be procured, as pre-approved by the Development Commissioner, and the details of the supplier before such deemed export supplies were made.

2. Compliance with Circular No. 14/14/2017-GST:
The primary issue was whether the appellant was required to follow the procedure prescribed under Circular No. 14/14/2017-GST. According to the circular, for supplies to EOU units, the recipient must give prior intimation in "FORM-A" to the registered supplier, jurisdictional GST officer in charge of the registered supplier, and its jurisdictional GST officer. The appellant argued that the circular's requirements were meant for the suppliers to EOUs and not for the EOU users themselves. However, the adjudicating authority and the appellate authority found that the appellant was indeed required to follow the procedure as prescribed and had failed to do so, making them ineligible for the refund.

3. Timeliness of Refund Application Submission:
The appellant contended that the refund application for July 2017 was filed within the stipulated two-year period as provided under Section 54(14)(b) of the CGST Act. The adjudicating authority rejected the refund on the ground that the date of filing was considered as the date of submission of the reply in compliance with the defect memo, which was dated 11-9-2019, whereas the original refund application was filed on 22-7-2019. The appellate authority upheld the adjudicating authority's decision, stating that the appellant's contention lacked merit and did not alter the outcome.

Conclusion:
The appellate authority concluded that the appellant failed to comply with the procedural requirements outlined in Circular No. 14/14/2017-GST, which was necessary for claiming refunds under deemed export provisions. The appellant's reliance on case law was found to be inapplicable due to differing facts. Consequently, the appeals filed by the appellant were rejected, and the impugned orders passed by the adjudicating authority were upheld.