Case Law Details
ATC Tires Private Limited Vs Joint Commissioner of GST & Central Excise (Appeals) (Madras High Court)
The purpose of granting refund on zero rated supply is to ensure that the exports are competitive in the international market and such transactions are not burdened with taxes.
The export by the petitioner from its SEZ unit in Tirunelveli is a zero rated supply within a meaning of Section 2 (23) of the IGST Act, 2017 r/w Section 16of the IGST Act, 2017. Once, it is concluded that it was a zero rated supply, refund in terms of Section 16 (3)(a) of the IGST Act, 2017 cannot be denied. Sub Section (3) and (10) of Section 54 of the Central Goods and Services Tax Act, 2017 complement Section 16 of the IGST, 2017.
Section 54 of the Central Goods and Services Tax Act, 2017 allows the refund of tax and includes refund in case of zero rated supply made without payment of tax. Proviso to Section 54 (3) of the Central Goods and Services Tax Act, 2017 allows refund of unutilized input tax credit of zero-rated supplies made without payment of tax.
No refund of input tax credit is allowed only if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. This is admittedly not the case here.
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