Sopariwala Export Pvt. Ltd. Vs Joint Commissioner (Gujarat High Court)
Gujarat High Court held that levy of Compensation Cess at the rate of 160% on the supply of goods i.e. branded tobacco products supplied to merchant exporters for export is kept in abeyance and the matter is referred to GST Council to decide the issue.
Facts- By these petitions under Article 227 of the Constitution of India, the petitioners have prayed for quashing and setting aside the order-in-original for levy of goods and service tax in form of compensation Cess at the rate of 160% on branded tobacco products i.e. scented/flavoured chewing tobacco manufactured by the petitioners for export through merchant exporters which are subject to GST at 0.1% as per Notifications No.40/2017 and 41/2017 dated 23/10/2017.
Conclusion- Held that the impugned action of levy of Compensation Cess at the rate of 160% on the supply of goods i.e. branded tobacco products by the petitioners to merchant exporters for export is required to be kept in abeyance and the matter is referred to GST Council to decide the issue as to whether exemption is required to be granted on levy of Compensation Cess on supply of goods to merchant exporters for export at par with exemption granted for levy of GST and IGST in excess of 0.1% so as to enable the petitioners to avail input tax credit or refund as the case may be as per the provisions of section 16(3) of the IGST Act read with section 54(3) of the GST Act.
