Order Date: 09 June 2022

Facts:  

• The Petitioner, Jar Productions Private Limited, is engaged in providing production services to ‘A Suitable Company Ltd’ located in London United Kingdom (U.K.) (‘ASCL’). For providing the production services to ASCL, the petitioner received and utilised various inputs/ input services on which appropriate GST was paid as charged by the vendors. 
• The Petitioner filed refund for the period August 2019 to October 2019 and November 2019 to July 2020. The Authority rejected the claim of the refund of the GST on the grounds that the incidence of tax had been passed on to the recipient of the services and if refund was allowed, it would amount to unjust enrichment.
• Revenue submitted that the Petitioner has admitted that even in case of alleged unjust enrichment by the petitioner, the credit notes will nullify the effect of the same. GST law does not contemplate any mechanism for paying back the GST by way of issuance of credit note. Further, the incident of tax has been passed on to the recipient. Therefore, the petitioner is not entitled.
• Aggrieved, the petitioner challenged the order by filing a writ petition.

Issue:

• Whether the claim of refund of tax by the petitioner is valid if the services are rendered abroad?

Order:

• The High Court observed that the applicant is entitled to refund of the amount if the incidence of tax has not been passed on to the recipient of the services. GST does not apply to the services rendered abroad as they amount to the export of services. In addition to that the respondent could not establish that the incident of tax has been passed on to the recipient ASCL located in London.
• Clause 4.10 of the agreement shows that if the amount of GST is refunded, then the same will be deducted from the total cost in connection with the production services. This clearly shows that the incidence of tax has not been passed to the recipient ASCL
• The High Court relying on Motilal Oswal Securities Ltd vs Commissioner of Service Tax 2016 (12) TMI 1527 held that that the services rendered by the petitioner falls within the expression ‘export of services’ and when services are rendered abroad, CGST will not apply, and hence the refund application of the petitioner shall be accepted.
• Accordingly, the writ petition was allowed.