Section 54 of the CGST Act, 2017 – Refund - The petitioner challenged the dated 19th February 2021 and order dated 23rd February 2021, whereby the claims of the GST preferred by the petitioner have been rejected. The petitioner has entered into an agreement which provides that if any refund of tax component is received by the petitioner, such amount shall be reduced from the production expenses. The petitioner filed its first refund application, which was allowed by the respondent no 4. The Petitioner another refund application was rejected on the ground that the incidence of tax has been passed on to the client resulting into unjust enrichment of the petitioner. The petitioner preferred an Appeal, which was dismissed. The Petitioner filed another refund claim but the same was also rejected. The court observed that the applicant is entitled to the refund of the amount if the incidence of tax has not been passed on to the recipient of the services. The Agreement shows that GST is included in all costs in connection with production services. Clause 4.10 of the agreement shows that if the amount of GST is refunded , then the same will be deducted from the total cost in connection with the production services. This shows that the incidence of tax has not been passed to the recipient. The court relied the decision in the case of Motilal Oswal Securities Ltd vs Commissioner of Service Tax 2016 (12) TMI 1527. Both, the Adjudicating Authority and the Appellate Authority committed error in rejecting the refund of GST of the petitioner.

Held that:- The Hon’ble Court set aside the orders of both the authorities.