refund claimed by the recipient

REJECTION OF REFUND CLAIMED BY THE RECIPIENT U/S 54(1) OF THE CGST ACT

1) As per the decision in the case of TVL. NORTON GRANITES & PROPERTIES (P) LTD VERSUS THE ASSISTANT COMMISSIONER (ST) , CHENNAI - 2024 (6) TMI 607 - MADRAS HIGH COURT wherein it was held that the recipient is not eligible to claim refund (18-5=13% )tax collected by the service provider, namely KG Foundation in relation to the construction activities . In the article, the author, sought for  discussion over the issue. Please find my discussion given below:-

2) In my view, section 54. (1) says that “ Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed.

3) A casual reading of the word “person” available in the above section may pave way to interpret any person, ie,, registered or un registered, supplier or recipient. But,  if the word ” person” is read along with the other words “amount paid on such tax or any other amount paid by him “ used in the above  section would mean  the  supplier alone and not the recipient

4) More over,  according to clause (b) of sub-section (4) of section 54 of the Act, the eligibility to claim the refund is subject to production of documents((including the documents referred to in section 33 (ie., to be indicated in the tax invoice)  or evidences to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such tax and interest had not been passed on to any other person

5) Contrary to the above,  there are certain circumstances in which refund may be claimed by the recipient. Kindly see the explanation given in clause(g) of (2) of sub section (16) of section 54, wherein the “relevant date” is described as that in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person . This position would normally occur in the case of deemed export.

6) Kindly have a reading of the second proviso given to Rule 89(2) according to which it is described that the application may be filed

 in respect of supplies regarded as deemed exports, the application may be filed by, -

a. the recipient of deemed export supplies; or

7) Now coming back to the above decision, it is a case wherein there was supply of service and not supply of goods involved in works contract. So also, there was no circumstances as described in rule 89(2) as explained above. Therefore I am of the view that the decision of the Hon’ble court is acceptable.