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TMI Blog2022 (9) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... Heard Mr. Sai Chandra Haas, learned counsel for the petitioner and Mr. Dominic Fernandes, learned Senior Standing Counsel for CBIC appearing for respondent Nos.2 and 4 to 6. 2. By filing this writ petition, under Article 226 of the Constitution of India, petitioner prays for the following relief:- "a) That this Hon'ble Court be pleased to issue a writ of certiorari or any other appropriate writ, order or direction setting aside the Impugned Order in Appeal No.HYD-GST-SC-AP2-002-21-22 dated 09.04.2021 (received on 21.04.2021) passed by the Respondent No.5 in confirming the Speaking Order No.19/2020- Refund dated 04.01.2021 passed by the Respondent No.6 for rejecting the claim for Refund of Rs.77,91,857/- liable to the Petitioner for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on 02.12.2020 before respondent No.6 claiming refund of Rs.77,91,857/- under inverted tax structure in terms of Section 54 of the CGST Act. Respondent No.6 issued show cause notice dated 28.12.2020 calling upon the petitioner to show cause as to why refund application should not be rejected for contravention of Section 54(3)(ii) of the CGST Act. Thereafter petitioner submitted reply dated 01.01.2021. 5. Notwithstanding the reply submitted by the petitioner, respondent No.6 rejected the refund application dated 02.12.2020 by a speaking order dated 04.01.2021. While rejecting the refund application of the petitioner, respondent No.6 relied upon a Circular of the Central Board of Indirect Taxes and Customs (briefly, 'the Board' hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DO which had issued the requisite certificates. Petitioner is eligible for refund of the aforesaid amount of credit paid by it towards procuring raw materials at full rate of tax. Therefore, the request for refund under the inverted tax structure in terms of Section 54 of the CGST Act read with Rules 89(4) and 89(5) of the Central Goods and Services Tax Rules, 2017 (briefly, 'the CGST Rules' hereinafter) was made. Respondent No.6 adverted to the Board Circular dated 31.03.2020 more particularly to para 3.2 thereof as per which it was clarified that refund of accumulated Input Tax Credit (ITC) under clause (ii) of sub-section (3) of Section 54 of the CGST Act would not be applicable in cases where the input and the output supplies are the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where input and output supplies are the same. 13. We find that representations were received seeking clarification of paragraph 3.2 of the Board Circular dated 31.03.2020. The clarification was sought for in cases where the supplier is required to supply goods at lower rate under concessional notification issued by the Government. In order to clarify the issue and to ensure uniformity, Board exercised power under Section 168(1) of the CGST Act and issued Circular No.173/05/2022-GST dated 06.07.2022. Board has clarified that it was not the intent of paragraph 3.2 of Circular dated 31.03.2020 to cover the cases where the supplier is making supply of goods under a concessional notification and the rate of tax on output supply is less than th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies is less than the rate of tax on inputs. In such cases, as the rate of tax of output supply is less than the rate of tax on inputs at the same point of time due to supply of goods by the supplier under such concessional notification, the credit accumulated on account of the same is admissible for refund under the provisions of clause (ii) of the first proviso to sub-section (3) of section 54 of the CGST Act, other than the cases where output supply is either Nil rated or fully exempted, and also provided that supply of such goods or services are not notified by the Government for their exclusion from refund of accumulated ITC under the said clause." 14. The above Circular dated 06.07.2022 is clarificatory in nature whereby paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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