Question ID : 40752

CESS ON COAL UNDER GST CAN BE REFUNDED TO A TRADER

A coal Trader has purchased coal and paid cess @400 per M.Tonne now subsequently the coal Trader has sold coal to SEZ unit where he has to charge NIL GST/cess. As a result of sale to SEZ now there is excess IGST input and cess is lying in his credit ledger. The trader wants to adjust IGST for susequent sale but he wants cess to be refunded because the cess now can not be utilised for subsequent sale as there is always cess on purchase of coal at fixed rate as input and on sale cess will be output at fixed rate hence, the cess of SEZ sale will always remain in his credit ledger,so he wants the refund. Now the question is whether 1. A TRADER of coal can file application for refund of cess or it is allowed only to manufacturer. 2. Trader of coal is eligible for refund or not. He is not manufaturing any goods. only Purchases COAL and sales COAL. Pl. clarify.

You can file GST Refund on account of supplies made to SEZ unit/ SEZ developer (w/o payment of tax) under Refund Tab. Moreover, if you want to claim refund of only Cess and not of IGST, you can edit the Net Input Tax Credit column. The concerned Assistant Commissioner, if satisfied may release the funds, else he may give you deficiency memo asking you to provide further information. But make sure that you physically deposit your related documents with the concerned officer within 7days because at times they used to reject your refund application if you do not reach the concerned officer with relevant documents by raising a deficiency memo.