Section 16 of the IGST Act, 2017 – Refund — Export of Electrical Energy -- The petitioner challenged the order of Appellate Authority and adjudication order, whereby the refund was rejected. Since export of electrical energy is treated as Zero rated supply under Section 16 of IGST Act, 2017, the petitioner applied for refund of unutilized ITC through a refund claim by filing application. The respondent issued a SCN on 28.06.2019, rejecting the claim for refund, on the ground that as the Petitioner failed to submit shipping bill and Export General Manifest [EGM]. The Appellate Authority also confirmed the demand. The court observed that Act and Rules cannot curtail the benefit of ITC. The petitioner was justified in not producing shipping bills to prove the quantity of energy units transmitted and that the reports of REA filed by the petitioner, could be made the basis to deal with the claim for refund of Input Tax Credit. Circular No.175/07/2022-GST dated 06.07.2022 clearly establishes that amendment to Rule 89 of CGST (Amendment) Rules, 2022 was carried out to cure the defect in Rule 89 of CGST Rules, 2017, because of the problem faced by power generating units in filing refund claims of unutilised ITC on export of electricity.  A perusal of the amendment to Rule 89(2), would inter-alia show that the said Rule came to be amended only to clarify the anomaly that was existing with regard to production of material evidencing export of a thing which is intangible in nature. Hence, by no stretch of imagination, the amendment can be said to be declaratory in nature, but it can only be a one, which would be curing the defect by issuing necessary clarification as to how transmission of electrical energy can be proved. Rule 89 of CGST (Amendment) Rules, is only clarificatory in nature.

Held that:- The Hon’ble High Court allowed these writ petitions and set aside the orders under challenge and remanded the matter back to Appellate Authority  to deal with the claim of refund. The petitioner shall file relevant reports evidencing transmission of electricity before appropriate authorities, if not already filed.