Case Law Details
Tata Steel Limited Vs Union of India (Jharkhand High Court)
Jharkhand High Court held that the explanation inserted in Rule 89 (4) of CGST Rules, 2017 vide Notification No. 14/2022-Central Tax dated 05.07.2022 is not clarificatory in nature and thus will have a prospective effect.
Facts- The petitioner requires coal for manufacturing iron and steel. The petitioner avails Input Tax Credit (“ITC”) of the said compensation cess charged on supply of coal. Since the Petitioner undertakes export of goods under Bond/ Letter of Undertaking without payment of tax, it results in accumulation of balance of ITC of Compensation Cess.
Petitioner filed its application for refund of unutilized ITC of Compensation Cess in respect of zero-rated supplies, claiming refund of Rs. 4,95,64,373/-. Refund was claimed as per the formula prescribed in 89(4). The component “Turnover of zero-rated supply of goods” is defined as the ‘value of zero-rated supply of goods …”. Therefore, the Petitioner reflected the actual value of exports (reflected I GSTR- 1 of September 2019).
An amount of Rs. 3,32,08,130/- was provisionally refunded to the Petitioner in terms of Section 54(6) of the CGST Act read with Rule 91(2) of the CGST Rules. Thereafter, a show cause notice was issued to the Petitioner in RFD-08. It was indicated that value of “Turnover of zero rated supply of goods” indicated in the refund application could not be ascertained with certainty. Thereafter, Impugned Order in Original was passed in RFD-06 denying refund to the tune of Rs. 1,12,49,220/-.
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