GST Refunds: The Complete Digest

A tax refund is money you receive from the government because you overpaid your taxes. Essentially, it's like getting back the extra taxes you paid. This situation commonly occurs when the advance tax, TDS, or self-assessment tax you paid is more than your actual tax liability. If you wish to claim a refund for any tax and interest, you can apply within two years from the relevant date using the specified form and method, as outlined in the relevant tax regulations. If you're a registered person and seeking a refund for any balance in your electronic cash ledger, following the provisions of subsection (6) of section 49, you can claim this refund when submitting your tax return under section 39, adhering to the prescribed method as specified in the tax guidelines. GST Refund Rejected without considering Submissions: Delhi HC sets GST Order which found to be Cryptic GS EXIM INTERNATIONAL LLP vs COMMISSIONER, CENTRAL EXCISE / (GST) APPEALS CITATION: 2024 TAXSCAN (HC) 362 The Delhi High Court set aside the order rejecting the Goods and Service Tax ( GST ) refund which was made Without Considering Submissions. It was observed that the order is cryptic as the reasoning does not emanate from the order and there is no specific consideration of the factual matrix or the contentions of the petitioner.A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that the order is cryptic the reasoning does not emanate from the order and there is no specific consideration of the factual matrix or the contentions of the petitioner in the Order-in Appeal. Delhi HC directs GST Dept to consider ITC Refund based on CBIC Circular Extending Benefit of Exclusion Period BHARTI ENTERPRISES vs COMMISSIONER CITATION: 2024 TAXSCAN (HC) 365 The Delhi High Court directed the GST Department to consider input tax credit ( ITC ) refund based on the Central Board of Indirect Taxes and Customs ( CBIC ) Circular extending benefit of the exclusion period.A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “Considering the peculiar circumstances of this case, where the benefit of exclusion of the period from 01.03.2020 to 28.02.2022 has been made available subsequent to the impugned order rejecting the application for refund, this Court considers it apposite to allow the present petition and remand the matter to Respondent No. 3 to consider the petitioner’s application afresh in the light of the circular dated 05.07.2022.” Cancellation of GST refund without affording opportunity for hearing: Allahabad HC remands matter Kec International Limited vs Union Of India And 3 Others CITATION: 2024 TAXSCAN (HC) 340 In a recent case, the Allahabad High Court while allowing the writ petition filed by the petitioner observed that the revenue canceled the Goods and Service Tax ( GST ) refund without affording opportunity for hearing the petitioner. The writ petition was filed by the petitioner Kec International Limited by challenging the order of canceling the GST refund granted earlier to the petitioner.The court observed that Section 75(4) of the Act, 2017 gives perfect right to the petitioner to be personally heard before any adverse order may be passed. Therefore the court determined that “Since the statutorily incorporated right of natural justice has been violated for no good reason, we observe that alternate remedy that otherwise exists may not operate as a bar to entertain the present petition” Relief to Lenovo: Madras HC directs to Refund GST Amount within 30 Days M/s.Lenovo (India) Pvt. Ltd vs The Joint Commissioner of GST CITATION: 2024 TAXSCAN (HC) 203 As relief to Lenovo, the Madras High Court directed to Refund of the goods and service tax ( GST ) amount within 30 days. M/s.Lenovo ( India ) Pvt. Ltd, the Petitioner filed the writ petition under Article 226 of the Constitution of India with a prayer to issue a Writ to call for entire records relating to the impugned order-in-appeal passed by the first respondent and to quash the same and to direct the second respondent to sanction the refund amount of Rs.84,80,988/- along with interest immediately. A single bench member comprising Justice Senthilkumar Ramamoorthy allowed writ petitions and the second respondent was directed to issue refund to the petitioner within a period of thirty days from the date of receipt of a copy of the order. These matters are listed today “for compliance”. IGST Refund on Export of Zero Rated Supplies: Madras HC allows Clubbing of unutilised GST ITC Refund Claims beyond Calendar Month, remands Matter M/s.Tulip Nilgiris Exports Pvt. Ltd vs Additional Commissioner of Central Taxes and Central Excise CITATION: 2024 TAXSCAN (HC) 259 A Single Bench of the Madras High Court has allowed clubbing of Integrated Goods and Services Tax ( IGST ) refund claims on export of zero rated supplies, beyond a calendar month, while remanding the matter for reconsideration of the GST Input Tax Credit ( ITC ) refund claim.Justice Senthilkumar Ramamoorthy, in the detailed order, found merit in the petitioner’s arguments. The court observed that the rejection based on the claim being spread across different financial years was not in line with statutory provisions. Referring to Circular No.37/11/2018-GST, Justice Senthilkumar Ramamoorthy emphasised that claims spanning more than one calendar month were permissible. The stipulation restricting claims to a single financial year, as struck down by the Delhi High Court in Pitambra Books Pvt. Ltd. v. Union of India, was highlighted. GST refund pertains to Fourth Quarter Assessment Year: Delhi HC grants Interest at 6% per annum. SAFFRON ART PRIVATE LIMITED vs COMMISSIONER OF TRADE AND TAXES & ANR. CITATION: 2024 TAXSCAN (HC) 218 The Delhi High Court granted interest at 6% per annum as the GST refund pertains to fourth quarter Assessment Year. The Petitioner sought a direction to the respondent to issue a refund of Rs. 11,09,895/- for the fourth quarter 2014-15 besides interest thereon.A Division Bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “In view of the above, petition is allowed. The respondents are directed to process the application for refund of the petitioner in accordance with law within two weeks and in case the refund is payable the same shall be paid. Since the refund pertains to the fourth quarter of 2014-15, petitioner shall also be entitled to statutory interest @ 6% per annum from the date the amount is found to be due and payable”. Non receipt of deficiency Memo: Delhi HC directs to expedite adjudication of GST Refund TRUTH FASHION vs COMMISSIONER OF DELHI GOODS AND SERVICES TAX ACT CITATION: 2024 TAXSCAN (HC) 214 The Delhi High Court directed to expedite adjudication of GST refund as the deficiency memo was not received. The petitioner sought a direction to the respondents to refund a claim of Rs. 18,33,000/- as refund of GST for the period April, 2022 to March, 2023 and that deficiency memo has not been received.A Division Bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “In view of the above, the petition is disposed of granting liberty to the petitioner to approach this Court afresh in case need so arises. 6. Keeping in view the fact that the application for refund was submitted on 08.10.2023 for the subject period, respondents are directed to expedite the adjudication of the application and endeavour to disposed it of within four weeks from today.” Kerala HC quashes Order of GST Commissioner Rejecting Claim for Interest on Tax Amount ordered to be Refunded M/S. FLOORATEX RUBBER vs THE JOINT COMMISSIONER CITATION: 2024 TAXSCAN (HC) 252 The Kerala High Court quashed the order of the GST Commissioner rejecting claim for interest on tax amount ordered to be refunded. The petitioner has filed the present writ petition seeking to quash order dated 10.1.2023 issued by the 2nd respondent, whereby the petitioner’s application in Form RFD01A dated 17.1.2018 was rejected on the ground that the refund amount claimed by the petitioner by way of CGST and IGST was inadmissible as the petitioner had availed higher rate of duty draw back during the month of August, 2017.As per the provisions of Section 56, the petitioner is entitled for interest @ 6% on the amount ordered to be refunded from the date of expiry of sixty (60) days from the date of the application for refund, i.e. 17.1.2018, till the date of refund/credit to petitioner’s credit ledger, as per notification No.9/2017 dated 28.6.2017. Non-Issuance of Form GST DRC-04 under CGST Rules: Delhi HC directs to allow GST Refund SAPPHIRE INTREX LIMITED vs UNION OF INDIA & ORS. CITATION: 2023 TAXSCAN (HC) 1995 The Delhi High Court directed to allow Goods and Service Tax ( GST ) Refund since the FORM GST DRC-04 under Central Goods and Service Tax ( CGST ) rules, 2017.It is not disputed that any voluntary deposit in Form GST DRC-03 is to be followed by an acknowledgement accepting the payment as being voluntarily made by issuance in Form GST DRC04. The petitioner, Sapphire Intrex Limited is a public company engaged in the supply of services such as trading in shares & securities, renting of immovable properties, commission, and brokerage, etc, in New Delhi. The petitioner is registered under the Central Goods and Services Tax Act, 2017 ( ‘the Act’ ) with registration.A division bench of Justice Vibhu Bakhru and Justice Amit Mahajan observed that “since the deposit made by the petitioner has been held to be involuntary and the respondents are directed to forthwith process the petitioner’s claim for refund, we do not consider it apposite to adjudicate other issues raised by the petitioner. “ Involuntary Deposit of GST Demand under Coercion: Delhi HC directs GST department to Refund Rs.10 Lakhs SANTOSH KUMAR GUPTA PROP. MAHAN POLYMERS vs UNION OF INDIA THROUGH SECRETARY & ORS CITATION: 2023 TAXSCAN (HC) 2064 The Delhi High Court directed Goods and Service Tax ( GST ) department to refund Rs.10 Lakhs, involuntary deposit of Goods and Service Tax ( GST ) demand under Coercion. The issue to be decided was whether the petitioner emphasizes that the search conducted by Delhi GST Authorities on October 18, 2022, should legally preclude subsequent actions by central officers. The interpretation of Section 6(2) (b) of the CGST Act becomes pivotal in determining the legality of the ongoing proceedings.A Division Bench of Justice Vibhu Bakharu and Amit Mahajan instructed the respondents to reimburse the amount of ₹10, 00,000/- that the petitioner deposited through FORM GST DRC-03 on November 12, 2022. It’s crucial to note that this directive does not prevent the respondents from pursuing actions to safeguard the interests of revenue, including issuing an order under Section 83 of the CGST Act or Rule 86(A) of the Central Goods & Services Tax Rules, 2017, provided the conditions for exercising such powers are met. Interest on Delayed GST Refunds Shall be calculated From Expiration of 60 days after Refund Application, not from date of Appellate Order: Delhi HC BANSAL INTERNATIONAL vs COMMISSIONER OF DGST AND ANR CITATION: 2023 TAXSCAN (HC) 1772 A Division Bench of the Delhi High Court composed of Justice Vibhu Bakhru and Justice Amit Mahajan ruled that interest on delayed Goods and Services Tax ( GST ) refunds should be calculated from the expiration of 60 days after the refund application, not from the date of the appellate order, despite the initial denial. The petitioner contested the order dated 11.07.2023 from the Additional Commissioner of the Department of Trade and Taxes, rejecting the claim for ₹13,12,761 interest on refunded GST at a 9% annual rate.The main issue addressed was whether interest under Section 56 of the DGST Act starts from the date immediately after sixty days from the refund application or from a later date if the refund is initially denied but later allowed. Valuation of Goods on Eye Estimation not Prescribed u/s 15 of CGST: Allahabad HC directs to Refund GST Demand M/S Maa Mahamaya Alloys Pvt. Ltd. vs State Of U.P. And 3 Others CITATION: 2023 TAXSCAN (HC) 622 Allahabad High Court bench of Judge Pankaj Bhatia directed the Goods and Services Tax ( GST ) authorities to refund the GST Demand paid by the petitioner on reason that quantifying the goods on basis of eye is not in accordance with law. The present petition has been filed challenging the order whereby tax of Rs.26,10,000 has been assessed to be payable by the petitioner and penalty of Rs.26,10,000 and further the fine of Rs.25,000, total Rs.52,54,000 has been assessed against the petitioner. Also, the appellate order whereby the appeal preferred by the petitioner was partly allowed.The bench observed that in “Section 15 of the Central Goods and Services Tax Act ( CGST Act ) or the Rules framed thereunder, there was no prescriptions for valuation of the goods on the basis of eye estimation as has been done by the department and has been repelled by the appellate authority.” Refund of IGST Allowable on Zero Rated Supply along with 7% Interest: Bombay HC Sunlight Cable Industries vs The Commissioner of Customs CITATION: 2023 TAXSCAN (HC) 1054 In a recent judgement, the Bombay High Court has allowed the refund of Integrated Goods and Service Tax ( IGST ) on zero-rated supply along with 7% interest. Sunlight Cable Industries, the Petitioner has contended that on 19th December 2017, the Petitioner had filed a GST Return in Form No.GSTR-1 for the month of August 2017, inadvertently mentioning an incorrect Invoice No. and Port Code in respect of export transaction made corrected Return for the month of January 2018 in Form No.GSTR-1 amending particulars with respect to the said Tax Invoice No. SUN/03/2017-18 correcting the invoice number and the Port Code. Section 54 of the CGST Act provides for a refund of tax, which would entitle the Assessee to claim any refund of tax and interest or any other amount paid by him by making an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. Rule 96 of the CGST Rules, which provides for a refund of integrated tax paid on goods or services exported out of India had become applicable. Company not to Challenge Root of Contract on change in Tax Laws: Calcutta HC Denies GST Refund. M/s. Kayal Construction vs. The State of West Bengal & Ors CITATION: 2023 TAXSCAN (HC) 1814 Observing that the company not to challenge root of contract on change in tax laws, the Calcutta High Court denied GST refund to the petitioner, M/s. Kayal Construction. The petitioner participated in tender processes for similar works in all the four writ petitions and turned out to be the successful bidder. As per the relevant Clause of the general terms and conditions for e-tenders, which was treated to be a part of the tender document, the contractor/bidder was to bear Income Tax, VAT, Sales Tax, Royalty, Construction Workers Welfare Cess and similar other statutory levy/cess.A Single Bench of Justice observed that “If the petitioner argues that mere replacement of GST entitles the petitioner being absolved from such payments, by the same logic it could also claim to be relieved of the liability to pay all taxes just because the same has been enhanced. Price escalation, being not provided for in the contract, cannot be read into the contract just because a new taxation regime has replaced the earlier one. Hence, none of the logical stratagems sought to be adopted by the petitioner helps the petitioner in any manner insofar as the instant case is concerned.” GST ITC Refund Claim on Inputs of Electric Vehicle Manufacturing: Orissa HC directs Refund of Balance Claim Amount. M/s. OMJAY EV LIMITED vs Deputy Commissioner of State Tax CITATION: 2023 TAXSCAN (HC) 746 The Orissa High Court, has recently, in a writ petition filed before it, with regard to Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) refund claim on inputs of electric vehicle manufacturing, directed the refund of balance claim amount. The aforesaid observation was made by the Orissa High Court, when a writ petition was filed before it by the petitioner, seeking to quash the order dated 02.08.2022, by which the Deputy Commissioner of State Tax, CT & GST Circle, Bhubaneswar, had rejected the refund application of the petitioner in Form GST-RFD-06 under Annexure-10, as well as the refund rejection order dated 02.08.2022 for the period from December, 2021 to January, 2022 in Annexure-11.In accordance with the regular practices followed by the petitioner for the previous tax periods, i.e., filing of periodic refund application, it filed refund application on 02.06.2022, in respect of accumulated unutilised ITC of the input goods in Form GST-RFD-01 to the tune of Rs.1,57,92,298.00 for the period December 2021 to January 2022, and it was issued with receipt of refund application, i.e., Refund ARN Receipts. On 22.06.2022, the petitioner submitted all the relevant documents in support of its refund application, claiming a refund of Rs.1,57,92,298.00 for the period December 2021 to January 2022, in strict adherence to column no.5 of CBIC Circular No.125/44/2019-GST, dated 18.11.2019 and in the manner as provided in Rule-89(5) of the CGST Rules. GST Refund Rejected on Non-Availability of Order in DVAT Portal: Delhi HC directs to Re-Consider matter KESRI STEELS LIMITED vs COMMISSIONER OF DELHI GOODS AND SERVICE TAX & ORS CITATION: 2024 TAXSCAN (HC) 464 The Delhi High Court directed to reconsider the matter of rejection of the Goods and Service Tax ( GST ) refund as it was due to the non-availability of the order in the Delhi Value Added Tax ( DVAT ) Portal. The court set aside the order since the basis of the impugned order was the non-availability of certain records, which have now been verified by the department. The Petitioner was represented by Mr Varun Nischal, Mr Arif Ahmad Khan & Mr Shubham Sharma. The Respondents were represented by Mr Anuj Aggarwal with Ms Arshya Singh.Since the basis of the impugned order was the non-availability of certain records, which has now been verified by the department, the division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja set aside the impugned order and the matter called for a remit. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

GST Refunds: The Complete Digest

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