The Jharkhand High Court has allowed Rs. 1.23 crores GST refund with interest to Tata Steel laid down the principles of refund applications being processed.
The bench of Chief Justice M. S. Ramachandra Rao and Justice Deepak Roshan have observed that proof of payment is only required for export of services and not of goods as per Rule 89(2)(b) and 89(2) (c) of the CGST Rules).
The bench observed that for export of goods, only a reconciliation statement of the Shipping Bill and Export Invoices is required, which has already been annexed to the refund application. The insistence on proof of realization of export proceeds for processing of refund claims related to export of goods has not been envisaged in the law and should not be insisted upon.
The bench held that the requirement of payment should be within 9 months of export as per clause A2 of RBI Circular being FED Master Direction No. 16/2015-16 dated 1.1.2016 as amended from time to time; and the record suggests that all payments have been received by petitioner within 9 months.
The bench stated that Rule 96A-3 clearly stipulates that if goods are not exported within such time, then recovery under Section 79 of the Act may be done. Therefore, specific recourse is available under the Act. Further, Circular provides that “as long as goods have actually been exported even after a period of three months, payment of Integrated tax first and claiming refund at a subsequent date should not be insisted upon”.
The petitioner-Company,Tata Steel manufactures steel and sponge iron for which it requires coal as a raw material. The petitioner purchases coal and pays Compensation Cess under Section 8(2) of the Goods and Service Tax (Compensation to States) Act, 2017 and thus the petitioner avails Input Tax Credit of Cess. Petitioner’s-Company also exports goods under letter of undertaking without payment of tax as a result, there is an accumulation of ITC of Cess.
The refund application was filed by the petitioner-Company for the period F.Y.2021-2022 along with all relevant documents for refund. However, a show cause notice was issued to the petitioner- Company why not the refund application filed by the petitioner-Company be rejected. Thereafter, the petitioner immediately filed the reply to the show cause notice; however, the refund application of the petitioner was rejected on the ground of non- furnishing of documents/certificates.
The court while allowing the writ petition, directed to refund the amount of Rs. 1,23,22,617/- along with the stipulated interest under Section 56 of the Central Goods and Services Tax Act, 2017, within a period of 12 weeks from the date of receipt/production.
Case Details
Case Title: TATA Steel Ltd. Versus State of Jharkhand
Case No.: W.P. (T) No. 2900 of 2024
Date: 03/04/2025
Counsel For Petitioner: Salona Mittal
Counsel For Respondent: Ashok Kumar Yadav
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