Petitioner has a Head Office, two manufacturing units in India. One of the units of the petitioner is the Special Economic Zone Unit (SEZ), at Gangaikondan Village, Tirunelveli District which is the subject matter of the subjected writ petition. Certain categories of common services were purchased at the petitioner’s Head Office in Mumbai and the proportionate credit was distributed as an input service by its head office within the meaning of Section 2(61) of the CGST Act, 2017 to petitioner SEZ unit. Exports made from its SEZ unit amounts to ‘Zero-rated supply’ within the meaning of Section 2(23) of the IGST Act and therefore the petitioner was entitled for refund of tax paid on input and input services under Section 16(3)(i) of the IGST Act. SEZ unit filed an application in Form GST RFD-01A for refund unutilised IGST (which was distributed by its ISD) on account of zero-rated supplies. The said refund application was rejected by the department and rejection was upheld by the Joint Commissioner (Appeals) in view of the provisions of section 54 of the CGST Act read with Rule 89 of the CGST Rules which states that only a supplier of goods or services can file the refund application for supplies made to an SEZ unit and not the recipient of the goods or services. Plea of the Petitioner: Being aggrieved by the aforementioned orders, petitioner has filed this writ petition before the Hon’ble High Court and the Petitioner contended that the entire scheme of GST does not restrict any distribution of common credit by an ISD to a SEZ unit and on conjoint reading of section 16 of the IGST Act, section 54 of the CGST Act and Rule 89 of the CGST Rules, 2017, the Petitioner is entitled to get the refund of unutilized ITC lying in the Electronic Credit Ledger. Observation by Court: The court observed that the supplier of such common services to the petitioner’s Head office could not have claimed any refund either under 16(3)(b) of the IGST Act, 2017 as such a supply did not qualify as a “zero rated supply”. Therefore, there is no question of the supplier claiming refund under Section 16(3)(a) or (b) of the IGST Act, 2017 or section 54(3) of CGST Act r/w rule 89 of CGST Rules. Court also observed that once the supplies qualified as zero-rated supplies, refund in terms of section 16(3)(a) cannot be denied. Sub-section (3) and (10) complement section 16 of IGST Act, 2017. The court stated that the purpose of granting refund on zero rated supply is to ensure that the exports are competitive in the international market and such transactions are not burdened with taxes. Section 54 of the CGST Act allows the refund and includes refund in case of zero-rated supplies without payment of tax. Proviso to section 54(3) allows refund of unutilised ITC in said case and that there is no bar in rule 89(1) of the CGST Rules, 2017 for refund of unutilised ITC. Being aggrieved by the aforementioned orders, petitioner has filed this writ petition before the Hon’ble High Court and the Petitioner contended that the entire scheme of GST does not restrict any distribution of common credit by an ISD to a SEZ unit and on conjoint reading of section 16 of the IGST Act, section 54 of the CGST Act and Rule 89 of the CGST Rules, 2017, the Petitioner is entitled to get the refund of unutilized ITC lying in the Electronic Credit Ledger.