Urjita Electronics Private Limited Vs Joint Commissioner of GST And Central Excise (Madras High Court)
In a significant ruling, the Madras High Court has allowed Urjita Electronics Private Limited, a Special Economic Zone (SEZ) unit, to claim a refund of Goods and Services Tax (GST) that was erroneously paid by its suppliers on procurements. The court set aside the common order-in-appeal passed by the Joint Commissioner of GST and Central Excise (Appeals-II), Chennai, which had rejected the company’s refund applications. The judgment underscores the overriding effect of the SEZ Act, 2005, and the principle that SEZ units should not be burdened with taxes on their authorized operations.
Urjita Electronics is engaged in the manufacture of Radio Frequency (RF) Equipments, with its unit situated within an SEZ. As per the special dispensation for SEZ units, all supplies to such units are generally intended to be without payment of duty by the suppliers. However, the petitioner’s specific grievance arose because its status as an SEZ unit was not accurately reflected in the GST portal. Consequently, its suppliers proceeded to pay GST on the supplies made to Urjita Electronics, and this tax burden was ultimately borne by the petitioner.
The company subsequently claimed a refund of this erroneously paid GST under Section 54 of the CGST Act, 2017, read with Rule 89 of the CGST Rules, 2017. The original refund applications were rejected by the Assistant Commissioner, and these rejections were upheld by the Joint Commissioner (Appeals-II) in a common order dated April 27, 2021.
