The Goods and Services Tax Appellate Tribunal (GSTAT), Kolkata Bench, has set aside an appellate order upholding rejection of a ₹9.06 lakh input tax credit refund claim and directed the jurisdictional Proper Officer to examine the claim afresh after verifying supporting documents and reconciling turnover discrepancies.

The Bench of Satya Gopal Chattopadhyay (Judicial Member) and Anindya Mitra (Technical Member) did not sanction the refund and remanded the matter for a reasoned decision after giving the taxpayer a reasonable opportunity of being heard.

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The dispute arose after supplies claimed to have been made to Special Economic Zone (SEZ) units were reported as exports in GST returns. Conflicting assertions about the submission of documents, together with inconsistencies in the turnover figures, prompted the Tribunal to order fresh factual verification.

The appellant/assessee filed a refund application in Form GST RFD-01 on February 28, 2024, seeking ₹9,06,045 for April 2021 to March 2022 under the category of supplies made to an SEZ unit or developer without payment of tax.

The application declared zero-rated turnover of ₹1,40,95,971.65, adjusted total turnover of ₹1,40,95,971 and net input tax credit of ₹9,06,045.

The Proper Officer found that supplies to SEZ units or developers without payment of tax had not been disclosed in GSTR-1 for the claim period. Consequently, the officer treated the zero-rated turnover of goods as nil while applying the refund formula under Rule 89(4) of the CGST Rules, 2017, and rejected the claim.

The First Appellate Authority upheld that rejection.

The First Appellate Authority recorded several inconsistencies in the taxpayer’s explanation.

During the personal hearing, the taxpayer stated that only one invoice related to an SEZ supply in financial year 2021-22 and that the remaining supplies were exports under a Letter of Undertaking (LUT).

However, a letter dated October 17, 2025, claimed SEZ supplies of ₹1,40,95,971.65 and export sales of ₹1,69,37,571.07. According to the taxpayer, the combined turnover of ₹3,10,33,542.72 had mistakenly been reported under Table 6A of GSTR-1, which relates to exports.

The appellate authority noted that the statutory returns did not separately report SEZ supplies and that the turnover declared in the refund application did not match the figures appearing in those returns.

It further recorded that the taxpayer had not submitted documents necessary to substantiate the claim, including export invoices, shipping bills, Export General Manifest details, SEZ endorsements, LUT or bond, and reconciliation statements.

Before the Tribunal, the taxpayer sought to set aside the appellate order and obtain the refund of ₹9,06,045.

The taxpayer maintained that invoices, SEZ endorsements, Bills of Export and supporting records had already been furnished. It also alleged that the authority had accepted one invoice as an SEZ supply while treating other invoices as exports without providing adequate reasons.

The Department disputed the description of the discrepancies as merely clerical errors. It argued that consistency in aggregate turnover across GST returns could not establish the nature of each individual supply.

According to the Department, the claim required verification of individual invoices, recipient status, the nature of supplies, endorsements by the Specified Officer, export and SEZ documentation, and corresponding input tax credit.

Examining Section 16 of the IGST Act and the refund formula under Rule 89(4), the Tribunal emphasised the need to correctly disclose zero-rated supplies in GSTR-3B and provide their proper breakup in GSTR-1.

It explained that Table 6A of GSTR-1 concerns exports, Table 6B concerns supplies to SEZ units or developers, and Table 6C concerns deemed exports. Supplies to SEZs without payment of tax must also be disclosed in Serial No. 5(B) of the annual return in GSTR-9.

The Tribunal described the omission of the purported SEZ supplies from both GSTR-1 and GSTR-9 as “gross negligence”.

Nevertheless, it found that the dispute involved questions of fact requiring examination. While the taxpayer asserted that supporting documents had been submitted, the First Appellate Authority had expressly recorded that mandatory documents were not furnished.

The discrepancies in the turnover attributed to SEZ supplies also required reconciliation.

The Tribunal set aside the appellate order and remanded the matter to the jurisdictional Proper Officer for re-examination of the refund claim.

It directed the taxpayer to submit an invoice-wise reconciliation of the different categories of zero-rated supplies appearing in GSTR-1, GSTR-3B, RFD-01 and GSTR-9.

The taxpayer must also furnish copies of tax invoices and shipping bills relating to exports and supplies of goods to SEZs, the requisite endorsements by the Specified Officer, and the LUT.

These documents must be submitted within four weeks from communication of the Tribunal’s order. The taxpayer must prepare a list of the documents furnished and obtain an acknowledgment from the Proper Officer’s office.

After providing a reasonable opportunity of being heard, the officer must pass a speaking order under Rule 92 of the CGST Rules within four weeks from the conclusion of the hearing.

The Tribunal also permitted the officer to seek any additional material document or information relevant to deciding the refund claim.

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