M/S Seil Energy INDIA Limited vs. The Principal Commissioner Of Central Tax

The petitioner, after having exported electricity for some time, had sought refund of the input tax credit, which is accumulated in its account, by relying upon Section 16 of the I.G.S.T. Act, 2017 read with Section 54 of the C.G.S.T. Act, 2017. 3. The procedure for appraising the refund applications made under Section 54 of the C.G.S.T. Act, is set out under Rule 89 of the C.G.S.T. Rules. Rule 89 provides for a formula to be applied for refund of the Input Tax Credit available in the ledger of the registered person. The said formula reads as follows:

The petitioner, while seeking refund, had contended that, the Zero Rated Supplies made by him, constituted an aggregate of the transmission charges, which had been paid to the relevant transmission company as well as the cost of supply calculated, on the basis of the number of units supplied multiplied by the Tariff fixed in the agreement with the Bangladesh Power Development Board.

The details of the claim made by the petitioner, under each of these Writ Petitions, and the periods for which such refund is sought are set out in the table given below: S. No. WP No. Period Refund Application No & Date Refund rejection Order No. & Date Appellate Authority Order No. & Date Refund rejected in Rs. Electricity Charges

The respondents, while processing these applications, accepted the turnover relating to supply of electricity to the extent of number of units multiplied by the tariff rate. However, the respondents rejected the claim, relating to transmission charges. The contention of the respondent was that, the petitioner was entitled to treat only the turnover, as calculated by the respondents, in the above manner, and that, the reimbursement of transmission charges, paid by the petitioner, cannot be included in the value of the turnover of zero rated supplies.

Aggrieved by these orders of rejection, the petitioner has approached this Court, by way of the present set of Writ Petitions.

The respondents have relied upon a Circular, issued by the Central Board of Indirect Taxes and Customs, bearing No.175/07/2022-GST, dated 06.07.2022. In this Circular, it was stated, in Clause 4.2, that the turnover of export of electricity should be calculated by multiplying the energy exported during the period of refund with the Tariff Board Unit, specified in the agreement. This has been understood by the respondents to mean that only the number of units exported multiplied by the tariff should be taken into account and no other expenses can be taken into account.

Section 12 of the Power Purchase Agreement between the petitioner and the Bangladesh Power Development Board states that, the Bangladesh Power Development Board, would pay the monthly tariff payment on order, before the due date, and in accordance with the quantification of the tariff as per Section 12 and schedule 4 to the agreement. Entry 4.2.1 of schedule 4 reads as follows: “4.2. 1. Components of Monthly Tariff Payment

This tariff includes the payment for the number of units exported as well as the transmission charges payable for another such transmission charges paid in Indian Rupees. This would make it clear that the tariff charged by the petitioner, would include reimbursement of the transmission charges, paid by the petitioner. This is further clarified by a perusal of the invoices, issued by the petitioner to the Bangladesh Power Development Board. The simple invoices for the month of February – 2023, have been placed before this Court. Under this invoice, the tariff for actual supply of units and tariff for open access charges for reimbursement are set out separately.

In these circumstances, open access charges, which is another word for transmission charges, would have to be treated as a part of the tariff, and the respondents, would have to accept the inclusion of transmission charges as part of the value of zero rated supplies, made by the petitioner to the Bangladesh Power Development Board.

The respective contentions raised by both sides, raises some ambiguity, regarding the manner in which the turnover of the value of the adjusted turnover is to be calculated. This issue has already been considered by this Court, in its Order, dated 31.12.2025, in W.P.No.21938 of 2024 & batch. The same principles would apply in the present cases also.

Accordingly, these Writ Petitions are disposed of, with a direction to the respondents, for setting aside the orders of rejection, set out in the table above and with a further direction to the respondents to consider the application of the petitioner, for refund of the Input Tax Credit afresh, and in accordance with law, made in these Writ Petitions. It is clarified that, no fresh application needs to be made. There shall be no order as to costs.

2026