Can we avail refund of CESS paid on purchase of coal stock held as at 22nd September-2025
This query is : Resolved
23 September 2025
sir/s, from 22nd September onwards government removed cess on coal and increased gst rate, but plenty of stock held in trade and cess was paid on inward supplies, and there is credit balance of cess,
how to utilize said cess credit balance, can we cross utilize against I/C/S/GST Liability or claim refund, kindly inform
how to utilize said cess credit balance, can we cross utilize against I/C/S/GST Liability or claim refund, kindly inform
23 September 2025
Existing coal cess credit cannot generally be set off against regular GST (IGST, CGST, SGST) liabilities and is not eligible for refund except in the case of exports (zero-rated supplies), subject to fulfillment of all statutory provisions and proper documentation.
23 September 2025
Cross-utilization with GST: The accumulated compensation cess credit cannot be cross-utilized against IGST, CGST, SGST, or UTGST liabilities. As per GST law and interpretation, compensation cess credit is permitted to be utilized only for payment of compensation cess on outward supplies, which is now abolished for coal.
23 September 2025
Refund of unutilized compensation cess credit is generally permitted where coal (or the final goods) is exported (zero-rated supply), subject to usual conditions. Courts have ruled that refund is possible under Section 54 of the CGST Act read with the Compensation to States Act—even if cess is no longer levied on output—provided no dual benefit (drawback/refund/ITC) is claimed for the same input. Recent jurisprudence allows refund for exporters; merchants trading in India without export may face credit blockage.
23 September 2025
For trade stocks of coal meant for domestic supplies, the credit for compensation cess—already paid on inward supplies—remains unusable for future GST liabilities since the outward supply does not attract cess anymore. There is no provision for direct set-off against IGST, CGST, SGST, or UTGST, nor is there any blanket refund/encashment for unutilized credits.
23 September 2025
For more clarification...
Refer:: https://gstcouncil.gov.in/sites/default/files/2025-09/faq.pdf
Refer:: https://gstcouncil.gov.in/sites/default/files/2025-09/faq.pdf
24 September 2025
Good Luck...
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