Page 104 - GSTL_ 28th May 2020_Vol 36_Part 4

550 GST LAW TIMES [ Vol. 36
In reply to objection 2.5, it is submitted that Section 54(3) and Rule 89(2)(f)
of the GST Law (APGST Act., CGST Act) read as below :
“Subject to the provisions of sub-section (10), a registered person
may claim refund of any unutilised input tax credit at the end of
any tax period :
Provided that no refund of unutilised Input Tax Credit shall be al-
lowed in cases other than -
(i) zero-rated supplies made without payment of tax;
(ii) where the credit has accumulated on account of rate of tax on
inputs being higher than the rate of tax on output supplies
(other than nil rated or fully exempt supplies), except supplies
of goods or services or both as may be notified by the Gov-
ernment on the recommendations of the Council :
Provided further that no refund of unutilised input tax credit shall
be allowed in cases where the goods exported out of India are sub-
jected to export duty :
Provided also that no refund of Input Tax Credit shall be allowed, if
the supplier of goods or services or both avails of drawback in re-
spect of central tax or claims refund of the integrated tax paid on
such supplies.”
Rule 89(2)(f)
The application under sub-rule (1) shall be accompanied by any of the fol-
lowing documentary evidences in Annexure-1 in FORM GST RFD-01, as
applicable, to establish that a refund is due to the applicant, namely :-
a declaration to the effect that tax has not been collected from the
Special Economic Zone unit or the Special Economic Zone develop-
er, in a case where the refund is on account of supply of goods or
services or both made to a Special Economic Zone unit or a Special
Economic Zone developer.”
As per provisions described above, the provision for refund of uti-
lized input tax credit is made available only to those taxpayers who
made supplies to SEZ unit or the developer, against LUT.
Further in Rule 89(2)(f) it has been clearly prescribed that the refund
application shall accompany a declaration to the effect that the Spe-
cial Economic Zone unit or the Special Economic Zone developer
has not availed the input tax credit of the tax paid by the supplier of
goods or services or both, in a case where the refund is on account
of supply of goods or services made to a Special Economic Zone
unit or a Special Economic Zone developer.”
Thus, the facility of getting refund of tax paid is statutorily made available
to those taxpayers who made supplies to SEZ only, with payment of tax.
This is to ensure that the refund of tax paid is claimed only by the suppliers
to SEZ, on filing of declarations from their SEZ purchasers, to avoid duplic-
ity of the claims, as there may be a situation where the SEZ Unit gets sup-
plies of goods/services from multiple number of Vendor taxpayers, spread
over different places, and it is not possible for the department to track their
refund claims, against the supplies made to such SEZ Unit, with payment
of tax. Therefore, the contention of the taxpayer that the SEZ Unit can also
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