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TMI Blog2022 (6) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... pose for providing the said services, the petitioner has entered into an agreement dated 12th September, 2019 with ASCL effective from 28th March, 2018. It is further alleged that Clause 4.10 of the agreement provides that if any refund of tax component is received by the petitioner, such amount shall be reduced from the production expenses i.e. while computing the consideration towards production services, the said amount of tax component received as refund will be deducted from the production expenses. 4] For providing the production services to ASCL, the petitioner received and utilised various inputs/ input services on which appropriate CGST/MGST/IGST services were paid as charged by the vendors. In cases, where the services were received from service provider/ vendor located outside India, CGST+MGST or IGST on such supplies was paid by the petitioner. 5] The petitioner filed its first refund application for the period from April to July, 2019 on 31st March, 2020. The said claim was allowed by the respondent no 4 The Assistant Commissioner. 6] The Petitioner filed another refund claim of Rs. 1,43,56,999/-for the subsequent period of August 2019 to October, 2019. Thereafter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jape submitted that the principle of unjust enrichment does not apply to export services. Being a zero rated supply, the principle of unjust enrichment does not apply to the services rendered by the petitioner. Clause 4.10 of the agreement clearly stipulates that if refund is received, it shall be deducted from the expenses of production. He further submitted that there are judgments of this court indicating that the principle of unjust enrichment does not apply to export services. 11] Shri Jetly learned senior counsel for the Respondents submitted that the Petitioner has admitted that even in case of alleged unjust enrichment by the petitioner, the credit notes will nullify the effect of the same. GST law does not contemplate any mechanism for paying back the GST by way of issuance of credit note. He further submitted that the petitioner has admitted that when the refund is obtained, the GST collected from the recipient would be paid back. This itself shows that the incident of tax has been passed on to the recipient. He, therefore, submitted that the Adjudicating Authority and the Appellate Authority have rightly held that the petitioner is not entitled to the refund of GST as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council 16] Thus, refund of unutilised tax credit shall be allowed in cases of zero rated supply. Zero rated supply has been defined in Section 16 of the Integrated Goods and Services Tax Act, 2017 thus:- 16 (1) zero rated supply means any of the following supplies of goods or services or both, namely:- (a) export of goods or services or both or (b) supply of goods or services or both to a Special Economic Zone developer or Special Economic Zone unit 17] Section 54(8)(e) of the CGST Act states refund cannot be claimed when incidence of tax has been passed on to the recipient or any other person. Section 54(8)(e) of the CGST Act states thus:- Notwithstanding anything contained in sub section(5) , the refundable amount shall, instead of being credited to the Fund, be paid to the applicant if such amount is relatable to - (e) if the tax and interest , if any, or any other amount paid by the applicant , if he had not passed on the incidence of such tax and interest to any other person 18] Thus, the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment of Export of Services Rules, 2005 discussed supra. That export of taxes along with commodity or invisible exports renders them unviable in the international market placed and handicaps exporters, so vital to robustness of the domestic economy, is an accepted parameter that Governments build into policy and framework of taxation. Consequently, within the rigour of tax administration, the tax collector is mandated assume the existence of such relief to the exporter, identify it and apply it to the assessment instead of relying upon the first provision or construct available to deny the relief. This is the fundamental principle evident in the various decisions of the Tribunal cited supra : that except in few commodities or services, and with deliberate intent, some instrument is promulgated by Government to ensure nontaxability of exports." 7. We also find that the Hon'ble Bombay High Court in the case of Commissioner of Service Tax, Mumbai II v. SGS India Pvt. Ltd. 2014(34) STR 554 (BOM) was considering the same issue and in paragraph 24 held as under : "24. In the present case the tribunal has found that the assessee like the respondent render services, but they we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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