Bombay High Court: Section 54 of CGST Act Provides Refund for Tax Paid on Zero Rated Supplies of Goods/Services/Both or on Inputs Services The Bombay High Court by its division judges bench comprising of Justices G.S. Kulkarni and Jitendra Jain while noting that Section 54 of Central Goods and Service Tax Act, 2017 (CGST Act) provides refund for tax paid on zero rated supplies of goods...
Bombay High Court: Section 54 of CGST Act Provides Refund for Tax Paid on Zero Rated Supplies of Goods/Services/Both or on Inputs Services
The Bombay High Court by its division judges bench comprising of Justices G.S. Kulkarni and Jitendra Jain while noting that Section 54 of Central Goods and Service Tax Act, 2017 (CGST Act) provides refund for tax paid on zero rated supplies of goods or services or both or on inputs services, allowed the refund of Integrated Goods and Services Tax (IGST) on zero-rated supply along with 7% interest.
The bench was of the view that the petitioner was entitled to a refund of the IGST paid on the exports in question, as it is certain that this is not a case where the petitioner is availing of any double benefit, that is, the IGST refund and a higher duty drawback.
In the present case, the Petitioner/assessee claimed an amount of Rs. 21,41,451 in respect of the zero-rated supply, which was denied by the department.
It was the Petitioner’s case that it had filed a GST Return in Form No. GSTR-1 for the month of August 2017, inadvertently mentioning an incorrect Invoice number and Port Code in respect of export transactions made. Upon noticing the same, the Petitioner filed an amended or corrected return, amending particulars with respect to the Tax invoice and correcting the invoice number and the Port Code.
The Petitioner argued that despite all complaints, there was no response from the Respondents. The Petitioner lodged a grievance in regard to the IGST refund with the Central Public Grievance Redress and Monitoring System (CPGRAMS).
The Petitioner’s grievance was acknowledged. The Petitioner received an email stating that the Petitioner’s grievance has been disposed of on the ground that the Petitioner had availed of a higher duty drawback on its exports under the said Export Invoice and corresponding Shipping Bill.
The Petitioner vehemently asserted that the reasons for rejection were not correct. The Petitioner submitted a fresh grievance on 9 October, 2020, justifying and clarifying that it had not realised any higher amount of drawback against the Shipping Bill.
However, by e-mail from the CPGRAMS, the Petitioner again received a communication that the grievance had been closed.
The petitioner contended that the petitioner’s exports were admittedly a zero-rated supply in terms of Section 16 of the IGST Act. Hence, considering the clear position in law as seen from the provisions of Section 54 of the CGST Act as well as Rule 96 of the CGST Rules, such a refund could not be denied to the Petitioner.
The bench after noting the facts and submissions of the case, noted that the case of the Petitioner was of a case of zero-rated supply under Section 16(3) of the IGST Act. Rule 96 of the CGST Rules, which provides for the refund of integrated tax paid on goods or services exported out of India, would be applicable.
Therefore, the Court held that the petitioner was entitled to a refund of the IGST paid on the exports, as it was certain that this was not a case where the Petitioner was availing of any double benefit, i.e., the IGST refund and a higher duty drawback.
Accordingly, the Court directed the Respondents to refund to the Petitioner the IGST paid by the Petitioner in respect of the goods exported, i.e., zero rated supply, under shipping bills in question being an amount of Rs. 21,41,451 with simple interest at 7% per annum with effect from 22 February 2018.