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2022 (4) TMI 1194 - MADRAS HIGH COURTRefund of accumulated Integrated Goods and Service - Zero Rated Supply - It is submitted that petitioner's Head Office in Mumbai has distributed proportionate input tax on the services, which were commonly used for the petitioner's Head Office, petitioner’s SEZ unit and the EOU unit - recipient of service - HELD THAT:- On the supply of common service to the petitioner’s Head office, the supplier of such common services could not have claimed any refund either under 16(3)(b) of the IGST Act, 2017 as such a supply did not qualify as a “zero rated supply” within the meaning of Section 2(23) of the IGST Act, 2017 - there is no question of the supplier claiming refund under Section 16(3)(a) or (b) of the IGST Act, 2017. The suppliers of these input service also could not have availed refund under Section 54 (3) of the Central Goods and Service Tax Act, 2017 r/w Rule 89 of Central Goods and Service Tax Rules, 2017. To avail such refund to the supplier should also have filed a declaration to that effect, incident of tax has not been passed on to the SEZ. The supplier also could not have claimed any exemption as the supply was for a common service and the invoice was raised on the petitioner’s Head Office at Mumbai - the purpose of granting refund on zero rated supply is to ensure that the exports are competitive in the international market and such transactions are not burdened with taxes. Section 54 of the Central Goods and Service Tax, 2017 allows the refund of tax and includes refund in case of zero rated supply made without payment of tax. Proviso to Section 54 (3) of the Central Goods and Service Tax Act, 2017 allows refund of unutilized input tax credit of zero-rated supplies made without payment of tax - No refund of input tax credit is allowed only if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. This is admittedly not the case here. The impugned order proceeds on the assumption that application for refund in respect of supplies to a Special Economic Zone or a Special Economic Zone Developer, can be filed only by a supplier of the goods or services in terms of second proviso to Rule 89 (1) of Central Goods and Service Tax Rules, 2017 - there is no merit in the impugned order passed by the respondent denying the benefit of refund of unutilized input tax credit of zero rated supplies effected by the petitioner. Petition allowed.
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