Clarification on refund of compensation cess to exporters and suppliers to SEZs.

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..... ters and suppliers to SEZs Madam/Sir, It is learnt that some manufacturer- exporters have claimed refund of accumulated credit of compensation cess along with ITC of IGST, CGST and SGST. They purchase coal as input on payment of appropriate GST and cess. Their output (finished products) does not attract levy of cess. As a result, cess paid on input keeps accumulating in the absence of any .....

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..... ing zero rated supplies without payment of tax. Input tax credit is defined in Section 2(63) of the CGST/OGST Act as credit of input tax. Further, in Section 2 (62) input tax is defined as tax charged on any supply of goods or services or both made to a registered person which includes IGST paid on import of goods, tax payable under sub-section (3) and (4) of Section 9 of the CGST/OGST Act and .....

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..... tered person making zero rated supplies- (a) to supply without payment of IGST under bond or LUT and claim refund of unutilized input tax credit; or (b) to supply on payment of IGST and to claim refund of the IGST paid on such supply. It may so happen that the goods involved in the zero rated supply may attract levy of cess as well and in that case, the registered person making the su .....

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..... ent of IGST only and will, thus, be entitled for refund of the IGST paid only. Similarly, if the zero rated supply is made without payment of IGST as provided in Section 16 (3) (a) of the IGST Act, the registered person making the supply will be entitled for refund of input tax credit as defined in Section 2 (63) read with Section 2 (62) of the CGST/OGST Act. He will not be entitled for refund of .....

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..... d against zero rate does not attract levy of cess. On the other hand, if the goods supplied against zero rate attract levy of cess, then there will be requirement for payment of cess along with 'GST and also there will be entitlement for refund of cess. The officers deciding refund claims are, hereby, advised to take due note of the above clarification while sanctioning refund of cess. You .....

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