Refund Of Unutilised ITC - Jurishour No. 1 Latest Tax

The Commissioner Of GST & Central Excise (Appeals-II) has allowed the refund of unutilised ITC for supplies made to Special Economic Zone (SEZ).

Background – Refund Of Unutilised ITC

The appellant/assessee is engaged in supplying services to the SEZ falling under SAC Code 9983 filed a Refund Application underSection 54 of CGST Act, 2017 for Rs.3,83,88,582 claiming a refund towards un utilised input credit on account of supplies made to SEZ unit/ SEZ Developer, which is a zero-rated supply.

A Show Cause Notice was received with the personal hearing opportunity given on 20.06.2024.

The Appellant has submitted an invoice raised against the customer M/s. Gateway Office Parks P Ltd, inadvertently omitted the Word while filing the refund application online.

They have also stated that details of payment are given in the ‘DTA Service Procurement Form’ filed by their customer M/s. Gateway Office Parks P Ltd. and they have already filed it online. They also stated that they have enclosed the same with the written reply.

The Appellant has submitted that it has filed the ‘Refund Application RFD-01’ on the last day of making the Refund Application on 29.02.2024. ‘The appellant has stated that the department had extended the time limit to 29.02.2024 for filing of Refund claim owing to the Covid-19 pandemic.

Hence going by the notification, they have stated that they are well within the prescribed time limit for filing the refund claim.

The notice was adjudicated by the Assistant Commissioner of GST And Central Excise, Adyar Division, Chennai South Commissionerate rejecting the refund claim on the ground of Time bar.

Arguments

The appellant has contended that in Circular No: 125/44/2019 dated 18/11/2019 it was mentioned that since the submission of the refund application on account of the deficiency memo is a fresh application and therefore the same shall also be made within two years from the relevant date.

Though the rules request for filing of fresh refund application in case of deficiency memo, nowhere it was mentioned either the old application is invalid/ rejected, or that calculation of the relevant date shall be made from the resubmission of the fresh application.

The appellant added that the time limit is to be computed from the date on which the refund/rebate claim was originally filed.

High Court and CESTAT, have held in the cases that the original refund/rebate claim was filed within the prescribed time limit laid down in erstwhile section 11 B of Central Excise Act, 1944 and the claim resubmitted along with some required documents/prescribed format on direction of department after the said time limit cannot be held time barred as the time limit should be computed from the date on which rebate/refund claim was initially filed.

The appellant stated that Section 54 (1) of CGST Act would make it clear that the assessee can make the application within two years. The terms used in said Section” may make an application before two years from the relevant date in such form and manner as may be prescribed”, which means that the assessee may make an application within two years and it is not mandatory that the application has to be made within two years and in appropriate cases, refund application can be made even beyond two years. The time limit fixed under Section 54 (1) is directory in nature and it is not mandatory.

Therefore, even if the application is filed beyond the period of two years, the legitimate claim of refund by the assessee cannot be denied in appropriate cases.