Servicetax cenvat credit refund

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karan

karan (Querist)
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28 January 2019 Hi,

Can i claim refund of Service Tax Cenvat credit transfered via TRANS1
Thanks in advance

Karan

CA Anita Bhadra

CA Anita Bhadra (Expert)
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28 January 2019 There appears no provision in GST law for such situations.

Otherwise also , TRAN 1 date has gone now.

karan

karan (Querist)
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29 January 2019 We have transfered 15L cenvat credit in july17 itself, we are unble to utilise this credit as we are fully export unit

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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25 July 2025 Hi Karan,

Thanks for your question — it's a situation that affected quite a few businesses during the transition from Service Tax to GST. Here's a detailed response based on your scenario:

Background:
You're an exporter who transferred ₹15 lakh of Service Tax CENVAT credit into GST via TRAN-1 in July 2017. You are unable to utilize this credit under GST because you are a 100% export unit (likely operating under LUT or bond with zero-rated supplies and no tax liability).

Key Points to Consider:
No Direct Refund Provision for CENVAT Credit under GST:
The GST law does not provide for a refund of pre-GST CENVAT credit transferred via TRAN-1 unless it is utilized against output tax liability.
Zero-rated Supplies and Unutilized ITC:
Under GST, exporters can claim refund of unutilized ITC, but this ITC must be under GST regime, not legacy credits (i.e., CENVAT from Service Tax transferred via TRAN-1).
Judicial Precedents:
Some High Courts (e.g., Madras High Court, Gujarat High Court) have taken a liberal view and allowed relief in certain cases of inverted duty structure or non-utilizable legacy credits, especially when the credit was legitimately carried forward.
Alternative Routes (Litigation / Representation):
Writ Petition: You may explore filing a writ petition in High Court if the refund is significant.
CBIC Representation: Businesses have also made representations to the CBIC or jurisdictional GST Commissioner.
Doctrine of Unjust Enrichment:
Any refund under litigation must satisfy that you haven’t passed on the incidence of credit — i.e., no unjust enrichment.
Conclusion:
There is no automatic refund mechanism for Service Tax CENVAT credit transferred via TRAN-1 under GST if it remains unutilized. However, given that you're a 100% export unit and the credit is legitimate, you may consider the judicial route or a representation to the department, especially citing that the credit cannot be utilized due to the nature of your business (export without tax).

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