Madras High Court authorizes GST refund to SEZ


The Madras High Court, while allowing the goods and services tax (GST) refund to the Special Economic Zone (SEZ), held that any entity can claim a refund under section 54 of the law. CGST.

The petitioner is a Special Economic Zone (SEZ) and has affected the purchases of several vendors / vendors for the development of the SEZ. The petitioner requested reimbursement of taxes paid under the Central Goods and Services Tax Act 2017, the Goods and Services Tax Act 2017 and the Integrated Tax Act 2017 on products and services.

The Applicant had filed requests for reimbursement of taxes which it had erroneously remitted to its suppliers on various dates. A justification notice was issued when the applicant’s location for requesting reimbursement was placed in the SEZ itself.

The Applicant argued that he erred in remitting taxes on supplies made to him because the supplies made to him were zero-rated supplies exempt from tax. It was further argued that the reference in Article 54 of the CGST law to “any person” and would also include the SEZ and, therefore, it would have the right to claim the refund of the tax paid in error.

Single Judge Anitha Sumanth ruled that the statutory refund regime under CGST and national GST laws allows any entity to claim a tax refund, including a SEZ. It was observed that the provisions of article 54 of the CGST Law, providing for a reimbursement, apply to any person who claims such reimbursement and who requests it. Thus, it was decided that in the present case, the applicant falls within the meaning of “any person” as listed in article 54 of the CGST law and, consequently, can request the reimbursement of the taxes he has paid.

“Thus, on a combined reading of Article 54 and Rule 89, the restriction which was read in the provision by the tax authorities is, in my opinion, misplaced. In fact, the officer in the contested order assumes that the second provision of section 89 uses the word “”alone‘, which I cannot find in the second condition. It is a well established position that there can be no insertion of a word or phrase in a legislative provision or in a rule which must be read and applied, as drafted. No restriction or amplification of the Rule is permitted by interpretation. On the legal question of the right to reimbursement, I am in favor of the applicant ”, declared the court.

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