Facts of the Case:

In this case, the petitioner engaged in providing information technology and business support services to its overseas parent company in the United States, filed a refund claim for unutilized Input Tax Credit (ITC) for the period January 2019 to March 2019 under Section 16(3) of the IGST Act read with Section 54(3) of the CGST Act. The refund arose from export of zero-rated services. The department rejected the claim on the ground that the petitioner qualified as an “intermediary” under Section 2(13) of the IGST Act and therefore did not satisfy the conditions for export of services under Section 2(6) read with Section 13(8)(b) of the IGST Act. The appellate authority upheld the rejection.

Challenging the order, the petitioner argued that for periods immediately preceding and succeeding the disputed quarter, namely June 2018 to December 2018, April 2019 to December 2019, and January 2020 to March 2020, the department had consistently treated the very same services as export services and granted refund of unutilized ITC. The petitioner contended that there was no change in the nature of services and therefore the contrary stand adopted for the intervening period was arbitrary and discriminatory.

Issue:

Whether the GST authorities can deny refund of unutilized ITC by treating a taxpayer as an “intermediary” for a particular period when the same services had been accepted as export of services and refund had been granted for earlier and subsequent periods without any material change in facts.

Held that:

The High Court allowed the writ petition and set aside the appellate order rejecting the refund claim. The Court held that once the department had consistently treated the petitioner as an exporter of services and granted refund of unutilized ITC for identical services during earlier and later periods, it could not adopt a contrary stand for an intervening period without demonstrating any distinguishing factual circumstances.

The Court observed that the department failed to establish that the services rendered during January 2019 to March 2019 were different from those rendered during the periods for which refunds had already been sanctioned. In the absence of any material change in facts, treating the petitioner as an exporter for some periods and as an intermediary for another period amounted to arbitrary and discriminatory action, violating the principle of consistency in tax administration.

Accordingly, the Court quashed the refund rejection order and directed release of the refund amount along with applicable interest within four weeks.

Case Name: Cvent India (P.) Ltd. v. Assistant Commissioner of CGST dated 21.07.2026