Compensation Cess ITC refunds require meeting the inverted-duty statutory test; eligible credit alone does not create cash-refund entitlement.
Case-Laws
GST
Refund of accumulated Compensation Cess ITC for domestic leather-product supplies under the inverted-duty structure requires more than lawful availment of credit. Section 54(3) limits refunds of unutilised ITC to statutory categories; credit usable only for Compensation Cess does not itself establish a cash-refund right. The claimant must meet the inverted-duty test and show that the exclusion for nil-rated or exempt outward supplies does not apply. A clarification on qualifying zero-rated supplies does not create an unconditional domestic-supply refund. As statutory entitlement was not established, the refund-granting order was set aside and rejection orders restored.
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