The Supreme Court has dismissed SLP against Gujarat High Court judgment in the case of Patson Papers Private Limited which allowed refund of Compensation Cess paid on coal utilized for manufacture of exported goods
The case involved multiple petitions challenging two CBIC circulars issued under Section 168 of the Central Goods and Services Tax Act, which clarified that refund of Input Tax Credit (ITC) on Compensation Cess paid on inputs would not be permissible when exports are made on payment of Integrated GST (IGST).
The petitioners—manufacturers and exporters—contended that they were entitled to a refund of ITC on the Cess paid for inputs used in the production of exported goods, as their finished products were not subject to the Cess.
The Gujarat High Court observed that although the petitioners had paid IGST on their export supplies, they were not liable to pay Compensation Cess and, therefore, were eligible to claim refunds of the unutilized ITC of such Cess.
Upon examining the relevant statutory provisions and circulars, the court held in favor of the petitioners, ruling that the exports qualified as zero-rated supplies under the GST law. Consequently, the court set aside the earlier orders that had denied the refund claims.
Case Details
Case Title: UOI Versus Patson Papers Pvt Ltd.
Case No.: SPECIAL LEAVE PETITION (CIVIL) Diary No. 49578/2025
