Gujarat HC Allows Refund of Compensation Cess claimed on Unitilised ITC on Captive Power Inputs Used...

The Gujarat High Court has allowed a refund of Compensation Cess claimed on unutilized ITC on captive power inputs used for SEZ/Export supplies. The court’s decision provides significant relief to businesses operating in Special Economic Zones (SEZs) and those involved in exports. The ruling clarifies that since the end product is either exported or supplied to an SEZ, the cess paid on inputs should be refunded. This judgment is a crucial precedent, ensuring that the tax burden on export-oriented businesses is minimized and that the government's policy of promoting exports is upheld.