The Gujarat High Court has directed the GST Authority to Refund IGST in Electronic Credit Ledger for SEZ Unit.
The writ applicant, IPCA Laboratories Ltd. is a pharmaceutical company. One of the manufacturing facilities of the writ applicant – company is located in a Special Economic Zone at Kandla, Gandhidham. The writ applicant claims that it is authorized to operate as a Special Economic Zone at the Kandla SEZ, Kandla, Kutch and is engaged in the export of goods under the Letter of Undertaking (LUT) from the SEZ Unit. In the year 2017-18, the writ applicant accumulated Input Tax Credit (ITC) to the tune of Rs.21,66,887/-.
The writ applicant received the aforesaid Input Tax Credit of the integrated tax from its ISD and ITC inward supply charged by the supplier as is permissible under the law. It is the case of the writ applicant that being a SEZ Unit making Zero Rated Supplies under the GST, the writ applicant has not utilized the credit and the same is lying unutilized in the Electronic Credit Ledger.
In such circumstances referred to above, the writ applicant filed the refund application in Form GST RFD – 01A. No sooner had the writ applicant filed the above refund application, a show cause notice in Form GST RFD – 08 came to be issued calling upon the writ applicant to show cause.
The Assistant Commissioner, thereafter, proceeded to pass an order in Form GST RFD – 06 dated 27th May 2019 rejecting the refund claim of the writ applicant of Rs.21,66,867/- under Section 54 of the CGST Act, 2017.
The division bench of Justice J.B.Pardiwala and Justice Nisha M.Thakore has held that the writ applicant could be said to be entitled to claim the refund of the IGST lying in the Electronic Credit Ledger as there is no specific supplier who can claim the refund under the provisions of the CGST Act and the CGST Rules as Input Tax Credit is distributed by the input service distributor.
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