CHEC-TPL Line 4 Joint Venture v. Union of India & Others

Background of the Case

This case concerned the entitlement of the petitioner, CHEC-TPL Line 4 Joint Venture, to claim refund of accumulated Input Tax Credit (ITC) arising from an inverted duty structure under Section 54(3) of the CGST Act. The petitioner was an unincorporated joint venture engaged in the execution of metro rail construction projects for the Mumbai Metropolitan Region Development Authority (MMRDA). As part of its contractual obligations, the petitioner supplied works contract services that were taxable at the concessional GST rate of 12%.

However, while its outward supplies attracted GST at 12%, a substantial portion of its inward supplies, including inputs and input services, suffered GST at significantly higher rates of 18% and 28%. This mismatch between the tax rate on procurements and the tax rate on outward supplies resulted in continuous accumulation of unutilized ITC in the petitioner’s electronic credit ledger.