ITC Refund Cannot Be Denied If Export Service Payment Is Received in Another Branch’s Bank Account | HC

Case Details: Cable And Wireless Global India Private Limited v. Assistant Commissioner, Cgst - [2024] 167 taxmann.com 288 (Delhi)

Judiciary and Counsel Details

• Yashwant Varma & Ravinder Dudeja, JJ.
• Ms Fereshte Sethna & Ameya Pant, Advs. for the Petitioner.
• Ms Sonu Bhatnagar, Sr. Standing Counsel, Ms Nishtha Mittal, Ms Apurva Singh, Ms K.S. Mary Jonet, Advs. & Santosh Kumar Pandey, Adv. for the Respondent.

Facts of the Case

The petitioner is engaged in providing Business Support Services to Vodafone Group Services Limited (VGSL). It filed an application for a refund of the unutilized ITC. The department rejected the refund application on the ground that payment for services was routed to the Bangalore branch’s bank account instead of the Delhi branch. It led the department to conclude that the “supplier” of services (Delhi branch) had not received the payments, thus invalidating refund under Section 2(6) of IGST Act, 2017, which defines “export of services”.

It filed writ petition against the rejection order and contended that the denial of refund was unjustified as the department had no power to deny refund on the ground that payment was made in different bank account.

High Court Held

The Honorable High Court noted that the Section 2(6)(iv) of IGST Act does not specify particular bank account where payment must be received but rather that it should be received by the supplier. Merely because payment of service provided by petitioner was received in a bank account at Bangalore, the same would neither warrant location of supplier identified in accordance with Section 2(15) being altered nor impact determination of actual supplier of service. The Court further noted that the department’s objections based on bank account remittance were overly technical and unsustainable. Therefore, the Court held that the impugned order rejecting refund was to be quashed.