A division bench of the Jharkhand High Court has held that the GST refund claims are not allowable if the same are not supported by documentary evidence under the provisions of the Central Goods and Services Tax Act, 2017.
The petitioner, M/s CTC (India) Private Limited is a 100 percent export oriented unit, exporting its products to countries like USA, China, Germany and other countries. The petitioner filed an application for refund of accumulated CGST, SGST and IGST credit for the period of January, 2018, total being Rs.9,89,191.00/- in the prescribed Form-GST-RFD-01A along with supporting documents.
The department observed that the petitioner while filing the GSTR-3B return of Input Tax Credit for the month of January, 2018; inadvertently, missed out to mention the zero rated supplies to the tune of Rs.3,79,82,605/- against the outward taxable supplies (zero rated) in the said return and instead mentioned the same to be “zero”. However, the said amount of zero rated supplies has been correctly shown in GSTR-1 return of outward supplies against export invoices. On the basis of the said mistake, the refund claim was rejected by the department.
The petitioner argued before the Court that the order rejecting refund was passed without considering the detailed reply by the petitioners and the department have failed to take into account the fact that the definition of adjusted total revenue as provided under Rule 89 (4) of the Central Goods and Services Tax Rules, 2017 specifically excludes the exempted supplies and the claim of the petitioner for refund falls under exempt supplies as per Section 2(47) of the Central Goods and Services Tax Act, 2017.
Justice Aparesh Kumar Singh and Justice Deepak Roshan observed that the Appellate Authority has given a categorically finding that the application for refund of unutilized ITC on account of zero rated supplies has to be accompanied by documentary evidence to establish that a refund is genuinely due to the applicant.
“However, in the instant case such documentary or other evidence which was necessary to substantiate the claim of the assesse was not furnished even before the Appellate Authority. In other words, the assesse could not provide any such corroborative evidence in the form of documents even before the Appellate Authority, what to say before the assessment proceeding, to substantiate its claim of zero rated supply so that its claim could be validated. The law is very clear that merely claiming any refund on the basis of averments would not suffice unless and until the said claim of any assesse is corroborated by documentary evidence. In the instant case, the petitioner is making claim without furnishing any documentary evidence to support their contention,” the Court said.
Confirming the order denying refund, the Court held that “From the appellate order it also transpires that the Appellate Authority has duly considered the circular No.37/11/2018-GST dated 15.3.2018 which is related to a refund claim on account of export of goods without payment of tax and held that the same is possible only on verification of invoices. At the cost of repetition, since the petitioner fails to substantiate its claim of refund by giving documentary evidence either before the assessment proceeding or before the appellate authority; his claim for refund has been rejected. Even before this Court, the petitioner failed to do so.”
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