Merck Life Science Private Limited Vs Union of India (Karnataka High Court)
Karnataka High Court held that IGST wrongly paid to Centre on intra-state supplies is required to be refunded back since CGST/SGST already paid to the State GST Authorities. Accordingly, petition is allowed and order rejecting refund claim set aside.
Facts- The petitioner is said to be a Science and Technology Company operating across healthcare, life science and electronics and has been engaged in providing intermediary services to foreign entities including the periods under dispute i.e., November 2017, July, 2017, October, 2017, August, 2017 and September 2017, for which, the petitioner is said to be in receipt of commission income.
The petitioner was under the bonafide belief/impression that the services provided by them to the foreign entity qualified as export of services and accordingly, paid IGST in their GST or 3B returns filed for the periods November 2017, July, 2017, October, 2017, August, 2017 and September 2017 under the provisions of the Integrated Goods and Services Tax Act, 2017. The petitioner paid the said IGST to the Central Government in December, 2017, July, 2017, October, 2017, August 2017 and September, 2017. Subsequently, the petitioner having realised that the services rendered by them did not qualify as export of services and that the same was not Inter-State supply, but was actually in fact Intra-State supply, discharged and paid State GST under the Provisions of the Karnataka Goods and Services Tax Act, 2017, by making the payment in Form GST or 3B in the month of March 2018. Subsequently, refund application dated 30.03.2024 was filed by the petitioner before respondent Nos.2 and 3 – Central Tax Authorities, inter-alia contending that the tax wrongly/erroneously paid by them to the Central Authorities under the bonafide belief that it was Inter-State supply and it deserves to be refunded in favour of the petitioner in terms of Section 19(1) of the IGST Act and Section 77(1) of the Central Goods and Services Act, 2017 read with Rule 89(1A) of the CGST Rules, 2017.
