GST ITC from Input Service Distributor lying unutilized due to exports is eligible for refund: HC

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  • Last Updated on 7 March, 2022

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Refund; Refund of unutilized credit; Zero rated supply/export by SEZ unit; GST ISD; GST ITC

Case Details: IPCA Laboratories Ltd. v. Commissioner - [2022] 136 taxmann.com 68 (Gujarat)

Judiciary and Counsel Details

    • J.B. Pardiwala and Ms. Nisha M. Thakore, JJ.
    • Anandodaya S. Mishra for the Petitioner. 
    • Nikunt K. Raval for the Respondent.

Facts of the Case

The applicant was a pharmaceutical company and located in a Special Economic Zone (SEZ). It was engaged in the export of goods under the Letter of Undertaking (LUT) from the SEZ Unit. It had accumulated Input Tax Credit (ITC) which was received from its Input Service Distributor (ISD) and lying unutilized in the Electronic Credit Ledger. It filed the refund application in Form GST RFD – 01A and the same was rejected. It preferred an appeal before the appellate authority but appeal was dismissed. Thereafter it filed writ petition against the same.

High Court Held

The Honorable High Court observed that this Court has already decided in the case of M/s. Britannia Industries Limited vs. Union of India [2020] 122 taxmann.com 32 (Gujarat) that assessee situated in SEZ could claim refund with regard to credit of IGST distributed by ISD for services pertaining to SEZ unit as there is no specific supplier who can claim the refund under the provisions of the CGST Act with respect to ITC distributed by the ISD. Thus, the present writ application was no longer res integra in view of the aforesaid judgement and therefore, the applicant was also entitled to claim the refund of the IGST lying in the Electronic Credit Ledger.

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