Arinsun Clean Energy Pvt Ltd. Vs State of Madhya Pradesh And Others (Madhya Pradesh High Court)
The Madhya Pradesh High Court considered a petition challenging the order dated 24 January 2025 passed by the Deputy Commissioner of State Tax, Circle Rewa, by which the refund of Integrated Goods and Services Tax (IGST) paid on ocean freight under the reverse charge mechanism was rejected. The petitioner company, incorporated under the Companies Act and engaged in the business of generation and sale of electricity, is registered under the Goods and Services Tax Act, 2017.
During the financial year 2018–19, the petitioner imported solar photovoltaic modules on a CIF (Cost, Insurance, and Freight) basis and paid IGST on ocean freight under Entry No.10 of Notification No.10/2017–Integrated Tax (Rate) dated 28 June 2017 through the reverse charge mechanism. As the tax was paid belatedly, interest under Section 50 of the GST Act was also paid. Subsequently, the petitioner filed an application seeking refund of ₹26,19,546 along with interest of ₹2,26,036 for June 2019 through Form RFD-01.
The petitioner relied on the judgment of the Gujarat High Court in Mohit Minerals Pvt. Ltd. vs. Union of India, which had declared the levy of IGST on ocean freight and the imposition of tax liability on importers under the reverse charge mechanism as unconstitutional. The petitioner submitted the necessary documents in support of the refund claim. However, the refund application was initially rejected on 24 July 2024 with the reason that the application was inappropriate under GST law. The petitioner then approached the High Court in a previous writ petition, which was disposed of on 18 December 2024 with directions to reconsider the matter in light of the Supreme Court judgment in Union of India vs. Mohit Minerals (2022).
