Quick Summary
The CBIC clarification (Letter No. CBIC-110267/107/2023-CX) issued on 18.07.2025 has put an end to the significant litigation initiated by the Sikkim GST authorities regarding alleged excess refund claims under the BSS for eligible manufacturing units in Sikkim. The CBIC clarification confirms that
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The CBIC clarification resolves the litigation initiated by Sikkim GST authorities regarding the calculation of BSS refunds, specifically addressing disputes over whether refunds should be based on actual value addition or a fixed cap.
The Sikkim GST authorities interpreted Para 5.8 of the BSS Notification to mean that BSS refunds were capped at the value addition specified in the notification's table, leading to demands for excess refunds.
The CBIC clarification states that eligible units are entitled to claim BSS refunds based on their actual value addition, not restricted by the fixed cap mentioned in the table under Para 5.8 of the BSS Notification.
The Budgetary Support Scheme (BSS) was introduced in light of the GST regime in 2017 to continue support for eligible units for the remaining exemption period, replacing the Area-Based Exemption Scheme.
The clarification has put an end to the interpretational dispute, leading GST authorities to drop previously issued demand notices and resulting in the disposal of writ petitions filed by affected industries.
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