The court established that exports classified as zero-rated supplies are eligible for refunds of input cess, reinforcing the principles of GST applicability.

ORDER :

1. Sri Kailash Nath P.S.S. learned counsel for petitioner and Sri Swaroop Oorilla, learned Special Government Pleader for State Tax appears for respondents.

2. Writ Petition No.2391 of 2023 along with analogous Writ Petitions has been filed on behalf of the same petitioner.

3. The claim for refund of tax paid against zero rated supplies for different periods has been rejected by respondent No.2 vide impugned orders dated 04.05.2021 in W.P. Nos. 2391, 2404, 2411, 2412, 2418, 2438, 2439, 2442, 2445 and 2446 of 2023; dated 28.10.2024 in W.P. Nos.24133, 35895, 36000, 36077, 36130, 36186 and 37285 of 2025; dated 31.08.2024 in W.P. Nos.24224, 24500, 24578, 35222, 35228, 35470 and 36078 of 2025 which have been confirmed in appeals by respondent No.3 vide impugned orders dated 19.08.2022 in W.P. Nos. 2391, 2404, 2411, 2412, 2418, 2438, 2439, 2442, 2445 and 2446 of 2023; dated 07.05.2025 in W.P. Nos.24133, 24224, 24500, 24578, 35222, 35228, 35470, 35895, 36000, 36077, 36078, 36130, 36186 and 37285 of 2025. The relevant details in respect of which the petitioner filed individual Writ Petitions indicating the tax period, the amount of refund claim, the date of Order-In-Original and the date of Order-In-Appeal are furnished in the form of tabulation chart hereunder:

4. The petitioner is engaged in the business of manufacture and supply of pharmaceutical products. It primarily undertakes supplies to Special Economic Zone (SEZ) units and exports also. It is registered under the Goods and Services Tax Act, 2017 (for short ‘GST Act’). According to the petitioner, under the Goods and Services Tax (Compensation to States) Act, 2017 (for short ‘Cess Act’), a cess is levied under Section 8 of the Cess Act on intra-State or inter-State supplies of such goods or services as specified in column (2) of Schedule to the Cess Act for the purposes of providing compensation to the States for the loss of revenue for a period of five years from the date on which the Central Goods and Services Tax Act, 2017 (for short ‘CGST Act’), was brought into force. The Cess Act provides for manner of determining the shortfall in revenue for the States and the methodology for calculation and release of compensation. In terms of Section 11 (2) of the Cess Act, the provisions of the Integrated Goods and Services Tax Act, 2017 (for short ‘IGST Act’) and the Rules made thereunder apply mutatis mutandis to the levy and collection of cess on inter-State supplies of goods or services. The proviso thereto states that the cess on supply of goods or services shall be utilized only towards payment of cess on supply of goods or services leviable under this Section as such the cess paid on inputs can be utilized only for claiming credit for cess on supplies payable, if any, and not as a credit for any other tax including CGST or IGST. Section 9 of the Cess Act provides for furnishing of returns in respect of taxable supply of goods or services or both upon payment of cess in forms prescribed. It also provides for application for refund of such cess in such form as may be prescribed. In terms of Sections 9 and 11 of the Cess Act read with Section 16 of the IGST Act, direct export of goods and supplies made to SEZ units would qualify to be zero rated supplies under the Cess Act also. Therefore, the provisions relating to zero rated supplies would apply to export of goods and supplies made to SEZ units under the Cess Act also. As per the petitioner, in terms of (3) of the IGST Act, a person making zero rated supply shall be eligible to claim refund of cess in accordance with Section 54 of the CGST Act subject to fulfilment of conditions as