MUMBAI : The Bombay High Court has held that outside India, CGST or IGST on such supplies was paid by the
GST does not apply to the services rendered abroad as petitioner.
they amount to the export of services. The petitioner filed its first refund application for the period
The division bench of Justice S.V. Gangapurwala and from April to July, 2019. The claim was allowed by the Assistant
Justice M.G. Sewlikar has allowed the GST refund to the Commissioner.
petitioner/assessee as the department has failed to The petitioner filed another refund claim for the subsequent
establish that the incidence of tax was passed on to the period of August 2019 to October 2019. The petitioner received a
client amounted to unjust enrichment. show cause notice (SCN). The petitioner replied to the notice.
The petitioner/assessee is in the business of providing The respondent rejected the claim of the petitioner on the
production services to “A Suitable Company Ltd.” (ASCL) ground that the incidence of tax has been passed on to the client,
located in London. The petitioner has entered into an resulting in unjust enrichment of the petitioner. The respondent
agreement with ASCL for the purpose of providing the rejected the claim for a refund of the GST.
services. The agreement provides that if any refund of tax The petitioner, being aggrieved by the order of the Assistant
component is received by the petitioner, the production Commissioner, filed the appeal before the appellate authority.
expenses shall be reduced from the consideration while The appeal was dismissed, and it was held that if a refund were
computing the consideration towards production services. granted, it would amount to unjust enrichment.
The amount of the tax component received as a refund will The petitioner contended that the principle of unjust
be deducted from the production expenses. enrichment does not apply to export services. Being a zeroThe
petitioner received and used various input rated supply, the principle of unjust enrichment does not apply
services for supplying production services to ASCL, on to the services rendered by the petitioner. The agreement
which applicable CGST/MGST/IGST services were paid clearly stipulates that if a refund is received, it shall be deducted
as charged by the vendors. In cases where the services from the expenses of production. The principle of unjust
were received from a service provider/vendor located enrichment does not apply to export services.