Andhra Pradesh High Court Dismisses SEIL Plea Seeking Zero-Rated GST Refund On Power Supplied To PTC

The Andhra Pradesh High Court has dismissed a batch of writ petitions filed by SEIL Energy India Ltd., holding that the company's supply of electricity to Power Trading Corporation of India Ltd. cannot be treated as an export under GST, even though the electricity was ultimately sold to Bangladesh.

Clarifying its views in the case, the court said the transaction between SEIL and PTC remained a domestic supply and did not qualify as a zero-rated supply eligible for a full refund of input tax credit.

The ruling was delivered by a Division Bench of Justice R. Raghunandan Rao and Justice Subhendu Samanta, which examined SEIL's challenge to the partial rejection of its GST refund claims by tax authorities.

SEIL Energy operates thermal power plants in Andhra Pradesh and supplies electricity under two different arrangements. Under one contract, it supplies power directly to the Bangladesh Power Development Board.

Under another, it supplies electricity to Power Trading Corporation of India Ltd., which has its own agreement to export power to Bangladesh. Before SEIL, PTC used to source its electricity from Meenakshi Energy; the arrangement was amended to substitute SEIL

The company argued that both streams amounted to the export of goods and should be treated as zero-rated supplies under the IGST Act. Classifying so would entitle it to a refund of unutilised input tax credit.

GST authorities opposed this argument, pointing out that the delivery point under both agreements was the Bohronpur sub-station in West Bengal.

Since the transfer of electricity and the destination took place in India, they treated SEIL's supply to PTC as a domestic transaction and excluded it while computing the refund.

The High Court agreed with the department that there is a difference between actual export and a supply made in preparation for export.

The bench said, “The supply, of electricity, between the petitioner and PTC can only be called a supply for export of goods and not, per se, an export of goods. The petitioner, though mentioned in the agreement, is not a party to the contract of supply of electricity, by PTC to the Bangladesh Board. The inevitable conclusion is that the supply of electricity, by the petitioner, to PTC is not a exports supply of goods and is a supply within India."

While recognising that electricity is “goods” and that its supply amounts to a sale, the court held that SEIL's lack of privity with the Bangladesh utility was decisive.

The petitions were dismissed, though SEIL was allowed to resubmit its refund applications by treating supplies to PTC as domestic and claiming refunds only for electricity supplied directly to Bangladesh, in line with the prescribed GST formula.

Case Title: SEIL Energy India Limited v. The Principal Commissioner of Central Tax

Citation: 2026 LLBiz HC (APH) 8

Case Number: W.P.Nos.21938

Counsel for Petitioner: Raghavan Ramabhadran, Lakshmi Kumaran Sridharan

Counsel for Respondent: Y.N. Vivekananda