Refund of IGST lying unutilized in Electronic Credit Ledger would be entitled to SEZ unit making zero-rated supplies

Facts:

• The petitioner/assessee has been a pharmaceutical company which operates as a Special Economic Zone (SEZ) and is engaged in the export of goods under the Letter of Undertaking (LUT) from the SEZ Unit. In the year 2017-18, the writ petitioner accumulated Input Tax Credit (ITC) to the tune of Rs. 21,66,887/-. The ITC accumulation was
  on account of :
  “i. During the period from July 2017 to March 2018, the company has received Input Tax Credit in respect of ISD credit to the petitioner amounting to ₹ 18,67,578/-.
  ii. Further the petitioner had accumulated ITC of GST paid by the petitioner in case of inward supplies received for export of goods as charged by the supplier amounting to ₹ 2,99,289/-.”
• The petitioner received the aforesaid Input Tax Credit of the integrated tax from its ISD and ITC inward supply charged by the supplier as is permissible under the law. It is the case of the writ petitioner that being a SEZ Unit making Zero Rated Supplies under the GST, the writ petitioner has not utilised the credit and it is lying unutilized in the Electronic Credit Ledger.
•  The petitioner filed the refund application to claim refund of unutilized credit in FORM GST RFD-01A, but the same was rejected by the Assistant Commissioner after issuing a show cause notice in FORM GST RFD-08. 
• An appeal filed before the appellant authority by the petitioner was also dismissed. 

Held: The Gujarat High court held as

• In reliance with the judgment and order passed by this court in the case of M/s. Britannia Industries Ltd. vs. Union of India reported in 2020 (42) G.S.T.L. 3 (High Court – Gujarat), the present writ application is no longer res integra. In the case of M/s. Britannia Industries Ltd. vs. Union of India, it was held that the stance of the department that the petitioner is not entitled to seek the refund of the ITC paid in connection with goods or services supplied to SEZ unit is not tenable. 
• The writ petitioner is entitled to claim the refund of the IGST lying in the Electronic Credit Ledger as there is no specific supplier who can claim the refund under the provisions of the CGST Act and the CGST Rules as Input Tax Credit is distributed by the ISD.
• The impugned order is hereby quashed and set aside. The respondent/department are directed to process the claim of refund made by the writ petitioner/assessee for the unutilized IGST Credit lying in the Electronic Credit Ledger under Section 54 of the CGST Act 2017.

To read the complete judgment 2022 Taxo.online 170