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TMI Blog2022 (4) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... a declaration to that effect, incident of tax has not been passed on to the SEZ. The supplier also could not have claimed any exemption as the supply was for a common service and the invoice was raised on the petitioner s Head Office at Mumbai - the purpose of granting refund on zero rated supply is to ensure that the exports are competitive in the international market and such transactions are not burdened with taxes. Section 54 of the Central Goods and Service Tax, 2017 allows the refund of tax and includes refund in case of zero rated supply made without payment of tax. Proviso to Section 54 (3) of the Central Goods and Service Tax Act, 2017 allows refund of unutilized input tax credit of zero-rated supplies made without payment of tax - No refund of input tax credit is allowed only 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. This is admittedly not the case here. The impugned order proceeds on the assumption that application for refund in respect of supplies to a Special Economic Zone or a Special Economic Zone Developer, can be filed only by a supplier of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Act, 2017 [hereinafter referred to as ''the CGST Act] to petitioner SEZ unit. This credit was claimed as refund by the petitioner under Section 16(3)(i) of the IGST Act. 7. It is submitted that petitioner's Head Office in Mumbai has distributed proportionate input tax on the services, which were commonly used for the petitioner's Head Office, petitioner s SEZ unit and the EOU unit. 8. The learned counsel for the petitioner submits for the exports made by the petitioner from its SEZ Unit in Gangaikondan, Tirunelveli District, the Petitioner filed refund claims of accumulated input tax credit which was transferred/distributed by the petitioner's Head Office as Input Service Distributor. 9. Under these circumstances, the petitioner filed six different refund claims under Section 54(3) of the CGST Act read with Rule 89 of the Central General Services Tax Rules 2017 [hereinafter referred to as ''the CGST Rules''], as detailed below:- Sl. No. ARN No. Date Period of Claim Refund Type Claim Amount (Rs.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same has been admitted on 09.09.2021. 14. The learned counsel for the petitioner submits that even in the course of direct supply by a third party Unit to SEZ refund has been allowed by this Court in the case of Platinum Holdings Private Limited vs. Additional Commissionerof GST and Central Excise (Appeals-II), Assistant Commissioner of GST and Central Excise reported in 2021 (10) TMI 630 W.P.No.13284 of 2020 etc. batch, vide order dated 11.08.2021. The learned counsel for the petitioner also submits that an appeal is however pending before the Principal Seat of this Court in W.A.No.3066 of 2021. 15. The learned counsel for the petitioner submits that as far as the maintainability of the present Writ Petition is concerned, under the scheme of the C.G.S.T. Act, an appeal is to be filed before the respective G.S.T. Tribunal. However, till date, such Tribunal has not been constituted and therefore, the present Writ Petition has been filed against the impugned order of the first respondent Joint Commissioner [Appeals], upholding/confirming the order of the second respondent. 16. As far as the merits of the case are concerned, the learned counsel for the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that when the supply is made to a Special Economic Zone Unit or a Special Economic Zone developer, the supplier of goods or receiver is entitled to file refund application. 22. It is, therefore, submitted that since the petitioner is a recipient of service, the benefits of refund on IGST bond on input service in terms of above provision would not inure to the petitioner. 23. The learned Standing Counsel for the respondents further submits that the refund granted vide subsequent order dated 16.08.2021 in Refund Order No.16/2021-2022 is not relevant, as it is based on the decision of the Gujarat High Court in Britannia Industries Ltd. Case [supra], which itself under challenge before the Hon'ble Supreme Court in S.L.P.No.13431 of 2021. 24. It is further submitted that the order of the second respondent for the subsequent period vide Refund Order No.16-2021-2022, dated 16.08.2021 itself, is now subject matter of an appeal in Appeal No.2 of 2021 GST (D) and therefore, the petitioner is not entitled to any relief based on the decision. 25. That apart, the learned Standing Counsel for the respondents further submits that the decision of this Court rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the petitioner and the learned counsel for the respondents. I have perused the impugned order dated 07.10.2021 passed by the first respondent. I have also examined the provisions from the respective GST enactments. 32. The impugned order seeks to deny the benefit of refund of accumulated Integrated Goods and Service by placing reliance on the second proviso to Rule 89 of Central Goods and Service Tax Rules, 2017. The operative portion of the impugned order reads as under:- 7. The appellant is an SEZ unit. The above provisions of law clearly exhibit as to how supplies to an SEZ unit are to be treated and the necessary stipulations for filing of refund. A plain reading of Section 16(1) of the IGST Act, 2017 makes it clear that the term 'zero rated supplies' includes exports of goods and services as well as supply of goods and services to an SEZ developer or an SEZ unit. Section 16(3) of the IGST Act, 2017 makes it evident that zero rated supplies are either eligible for refund of unutilized input tax credit where the integrated tax is not paid or refund of such tax when integrated tax has been paid subject to being in accordance with provisions of Section 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Government has consciously stipulated the conditions under proviso to Rule 89(1) making it incumbent that only the supplier of goods or services shall file the refund claim after due endorsement by the Specified Officer of the SEZ for receipt of goods in full / receipt of services with evidence, for authorized operations. 11. From the foregoing, it is observed that the contentions of the appellant seeking eligibility for refund against the zero-rated supplies received by them, is found to be untenable. Further, the case laws adduced by the appellant are not relevant to the issue in hand. A reading of the above provisions undoubtedly point towards a conclusion that SEZ unit / developers shall not claim any refund against the ITC involved in supplies received by them from suppliers. The Act facilitates eligibility for refund of unutilized input tax-credit only where the integrated tax is not paid or refund of such tax when integrated tax has been paid for refund claim, only to the suppliers who made supplies to SEZ unit / developers. Towards this end, I am guided by the decision of Hon'ble Supreme Court of India in the case of M/s. Punjable Tractors Ltd. [2005 (181) EL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 un-utilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of Section 54 of the Central Goods and Services Tax Act or the rules made thereunder.'' 36. There is no doubt that the petitioner while exporting goods out of the country had made a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on such supplies. (4) The application shall be accompanied by - (a) such documentary evidence as may be prescribed to establish that a refund is due to the applicant; and (b) such documentary or other evidence (including the documents referred to in Section 33 as the applicant may furnish to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such tax and interest had not been passed on to any other person: Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be necessary for the applicant to furnish any documentary and other evidences but he may file a declaration, based on the documentary or other evidences available with him, certifying that the incidence of such tax and interest had not been passed on to any other person. (5) If, on receipt of any such application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which has not been stayed by any court, Tribunal or Appellate Authority by the specified date, the proper officer may- (a) withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be; (b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law. (11) Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine. (12) Where a refund is withheld under subsection (11), the taxable person shall, notwithstanding anything contained in Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, the application may be filed by, - (a) the recipient of deemed export supplies; or (b) the supplier of deemed export supplies in cases 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: Provided also that refund of any amount, after adjusting the tax payable by 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. (2) The application under sub-rule (1) shall be accompanied by any of the following documentary evidences in Annexure 1 in FORM GST RFD-01, as applicable, to establish that a refund is due to the applicant, namely:- (a) the reference number of the order and a copy of the order passed by the proper officer or an appellate authority or Appellate Tribunal or court resulting in such refund or reference number of the payment of the amount specified in sub-section (6) of section 107 and sub-section (8) of section 112 claimed as refund; (b) a statement containing the number and date of shipping bills or bills of export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of the amount of claim on account of excess payment of tax; (l) a declaration to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed does not exceed two lakh rupees: Provided that a declaration is not required to be furnished in respect of the cases covered under clause (a) or clause (b) or clause (c) or clause (d) or clause (f) of sub-section (8) of section 54; (m) a Certificate in Annexure 2 of FORM GST RFD-01 issued by a chartered accountant or a cost accountant to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed exceeds two lakh rupees: Provided that a certificate is not required to be furnished in respect of cases covered under clause (a) or clause (b) or clause (c) or clause (d) or clause (f) of subsection (8) of section 54; Explanation. For the purposes of this rule- (i) in case of refunds referred to in clause (c) of sub-section (8) of section 54, the expression ''invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum total of the value of- (a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and (b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services, excluding- (i) the value of exempt supplies other than zero-rated supplies; and (ii) the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or subrule (4B) or both, if any, during the relevant period. (F) ''Relevant period'' means the period for which the claim has been filed. (4A) In the case of supplies received on which the supplier has availed the benefit of the Government of India, Ministry of Finance, Notification No. 48/2017- Central Tax, dated the 18th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1305 (E) dated the 18th October, 2017, refund of input tax credit, availed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zero rated supply within the meaning of Section 2(23) of the IGST Act, 2017. 40. Therefore, there is no question of the supplier claiming refund under Section 16(3)(a) or (b) of the IGST Act, 2017. The suppliers of these input service also could not haveavailed refund under Section 54 (3) of the Central Goods and Service Tax Act, 2017 r/w Rule 89 of Central Goods and Service Tax Rules, 2017. 41. To avail such refund to the supplier should also have filed a declaration to that effect, incident of tax has not been passed on to the SEZ. The supplier also could not have claimed any exemption as the supply was for a common service and the invoice was raised on the petitioner s Head Office at Mumbai. 42. The purpose of granting refund on zero rated supply is to ensure that the exports are competitive in the international market and such transactions are not burdened with taxes. 43. The export by the petitioner from its SEZ unit in Tirunelveli is a zero rated supply within a meaning of Section 2 (23) of the IGST Act, 2017 r/w Section 16of the IGST Act, 2017. Once, it is concluded that it was a zero rated supply, refund in terms of Section 16 (3)(a) of the IGST Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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