The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) allowed a refund for the tax paid on input services used for exported goods after the implementation of the Goods and Services Tax ( GST ) citing Section 142(4) of the Central Goods and Services Tax ( CGST ) Act and Circular.
Vaibhav Gems, the appellant engaged in the export of cut and polished diamonds. The appellate company availed technical inspection and certification services for the export process but did not claim credit for the service tax paid before GST was introduced.
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The appellant sought a refund for the services obtained before the introduction of GST, but the diamonds were exported between July 2017 and March 2018, after the GST regime began.
The adjudicating authority initially allowed the rebate claim, confirming that the appellant met all conditions stipulated under the notification. However, the Commissioner (Appeals) rejected the refund claim stating that the provisions of Notification No. 41/2012-ST were repealed after the implementation of GST.
The appellant challenged the Commissioner (Appeals) order before the Mumbai Bench of CESTAT arguing that they were eligible for a rebate under Notification No. 41/2012-ST as they fulfilled the stipulated conditions.
A single bench led by Rajeev Tandon (Technical Member) explained Section 142(4) of the Central Goods and Service Act (CGST), which clearly states that refund claims filed after the appointed date (implementation of GST) for services used in export before or after GST should be governed by the pre-GST law.
The tribunal noted that the CBIC through Circular No. 37/11/2018-GST had issued a clarification supporting the refund claim for service tax paid on input services related to exports, even after GST was implemented. The tribunal referred to previous cases such as Vinod Kumar Diamond India Pvt Ltd and Fine Automotive and Industrial Radiators Pvt Ltd, where similar claims were allowed.
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Thus, the tribunal allowed the refund of service tax paid on input services related to the export of goods. The tribunal set aside the impugned order of the Commissioner (Appeals) and directed that the refund be processed with any consequential benefits as per law.
The appellant’s appeal was allowed, and the refund of the service tax was granted.
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