Refund of Accumulated Credit Pertaining to Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess Not Permitted Beyond 2017: CESTAT [Read Order]
CESTAT held that refund claims post-2017 GST Act were not permitted. Several decisions have been relied upon to come to the conclusion.
The Customs, Excise and Service Appellate Tribunal (CESTAT), Mumbai Bench, held that refund of accumulated credit pertaining to Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess is not permitted beyond 2017.
The appellants, Bank of India Investment Managers Pvt. Ltd., were providing Banking and other Financial Services. In the month of June, 2018, they filed two refund claims viz. Rs.15,78,680/- towards Education Cess and Secondary & Higher Education Cess; and Rs. 1,55,987/- in respect of Krishi Kalyan Cess lying in balance as on 30.6.2017 pertaining to the period April, 2017 to June, 2017.
They had initially attempted transition of credit into GST Tran-1 however being unsuccessful they filed the refund applications.
The Adjudicating Authority rejected the refund claims observing that Rule 5 of Cenvat Credit Rules, 2004 permits refund of unutilized credit and Section 140(1) of CGST Act, 2017 does not permit credit of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess into GST regime.
The counsel for the appellants relied on decisions of the Supreme Court to argue that they were entitled to carry forward and transition the credit of cesses to electronic credit ledger under GST. The opposing counsel argued that no refund can be granted if filed afterwards as it would be time barred.
The tribunal observed that in M/s. KEI Industries Ltd. v. Commr. CGST & CE - Alwar, it was held that no refund can be granted for the blocked Education Cess, SHC Cess and KKC under the provisions of Section 142(3) and the refund claims, if filed after stipulated dates, would be time barred. CESTAT also relied on the decision of the Madras HC in Assistant Commr. Of CGST & Central Excise, Chennai v. Sutherland Global Services Pvt. Ltd. (2023).
Accordingly, the bench of Ajay Sharma (Judicial Member), dismissed the appeals and held that the refund or transition of accumulated credit in the present case is not permitted.
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