Principal Commissioner of Central Tax Vs Wipro Technologies (Karnataka High Court)
Conclusion: Refund of CENVAT Credit was permissible on input services used in export, even if the exported output service was not taxable during the relevant period.
Held: Assessee, provided IT services and claimed a refund of CENVAT Credit on inputs used for export services. Revenue filed appeals against the CESTAT’s decision allowing refund of CENVAT Credit on input services used for export of Information Technology services, even though such services were not taxable during the relevant period. Revenue contended that unless output services were taxable, refund of input credit could not be granted. Assessee argued that export of services was exempt and that refund of input credit could not be denied merely because the output service was not taxable at the time. Reliance was placed on a series of judgments, including mPortal India Wireless Solutions Pvt. Ltd. and subsequent rulings of the Karnataka High Court and Tribunal, which held that refund of CENVAT Credit was admissible in cases of export, irrespective of taxability of output services. It was held that the issue was no longer res integra, as multiple judgments, including mPortal India Wireless Solutions (2012) and others, had conclusively held that refund of input services was available even when exported output services were non-taxable. Since those rulings had attained finality, the substantial questions of law raised by the Revenue stood answered against it.
