Petition seeks Interest for Delayed IGST Refunds: Gujarat HC issues notice to Centre and GSTN [Read Order]

IGST Refunds - Taxscan

The Gujarat High Court has issued the notice to Centre and GSTN on a petition challenging the provisions of Central Goods and Services Tax (CGST) Act,  seeking interest for delayed IGST Refunds.

The petitioner M/s Saraf Natural Stone has filed the writ petition before the Gujarat High Court seeking directions against GST department for providing the interest on the delayed refund that is beyond 60 days and compensation in for the delay of provisional refund.

Counsel for the Petitioners Mr. Vinay Shraff, Mr. Vishal J Dave , Mr. Prateek Gattani and Mr. Nipun Singhvi submitted before the Court that the petitioner is entitled to interest on refund at the rate of 6% wherein the provisions allow the same but the GST portal did not provide for such utility.

Further, they submitted that  Section 16(3) of the IGST Act, provides that refund should be claimed in accordance with the provisions of section 54 of the CGST Act or the rules made thereunder.  Section 20 of the IGST Act further provides that provisions of CGST Act relating to refunds shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to central tax as if they are enacted under this Act.

Rule 91 of CGST Rules, 2017 inter-alia provide that the provisional refund is to be granted within 7 days from the date of acknowledgement of the refund claim. Section 56 of the CGST Act further provides that if any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not refunded within 60 days  from the date of receipt of application under subsection (1) of that section, interest at such rate not exceeding 6% p.a as may be specified in the notification issued by the Government on the recommendations of the GST Council shall be payable in respect of such refund from the date immediately after the expiry of 60 days from the date of receipt of application under the said sub-section till the date of refund of such tax.

The next date of the matter is 23.11.2018.

While speaking to Taxscan, CA Abhishek Chopra said that, “The claim made by petitioner appears to be legally correct and the same shall be good news for exporters as they have been getting the delayed refund which blocks their working capital cycle and the cost of capital has posed serious threats to the business.”

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