100% EOU entitled to refund of unutilized ITC on exports made without payment of tax, where deemed export provisions not followed and its benefits not availed

Last updated: 19 December 2025

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The Gujarat High Court has ruled that a 100% Export Oriented Unit (EOU) is entitled to a refund of unutilised Input Tax Credit (ITC) on goods exported without payment of tax. This applies even if the EOU did not strictly follow deemed export provisions or if its suppliers did not avail of related benefits. The court found that the EOU was making zero-rated supplies and was therefore eligible for the refund under Section 54(3) of the CGST Act, not subject to the restrictions of deemed export rules.

Court :
Gujarat High Court

Brief :
The Hon'ble Gujarat High Court in M/s. Shah Paperplast Industries Ltd. &Anr. v. Union of India & Ors.[R/Special Civil Application No. 17246 of 2022, 17080 & 18892 of 2023, 96 & 8319 of 2025dated November 13, 2025], set aside the Appellate Order ("Impugned Order") withdrawing refund granted towards unutilised input tax credit ("ITC") and held that a 100% Export Oriented Unit ("EOU") exporting goods without payment of tax is entitled to refund of unutilized ITC under section 54(3) of the Central Goods and Services Act, 2017 ("the CGST Act") read with Rule 89(4) of the Central Goods and Service Tax Rules, 2017 ("the CGST Rules"), and that Appellate Authority could not deny refund only on the ground that the claim was not filed under Rule 89(4A) of the CGST Rules where neither the supplier nor the recipient had availed deemed export benefits under Notification No. 48/2017 - Central Tax dated October 18, 2017 ("Notification No. 48") nor the procedure prescribed under Circular No. 14/14/2017 - GST dated 6.11.2017("Circular No. 14") in case of deemed export has been followed by the suppliers.

Citation :
R/Special Civil Application No. 17246 of 2022, 17080 & 18892 of 2023, 96 & 8319 of 2025dated November 13, 2025

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Attached File : 671907_5928_shah_paperplast_industries_ltd_anr.pdf

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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