Refund of gst

[RAJINDER SAREEN]

Some trader paid gst on import of salt at Mundra port in Feb.,2019. The customs charged GST thereon. Can the trader claim refund of GST as the burden of GST was not shifted while selling the same in India?

[KASTURI SETHI]

Refund on the ground that you have not passed on the burden of tax to the consumer/buyer cannot be claimed.

[RAJINDER SAREEN]

But Sir, salt attracts nil rate of GST. But customs has charged GST for no reason except for defective system. Can't the refund of the same be claimed?

[RAJINDER SAREEN]

Sethi ji, can't refund of GST be claimed as salt attracts nil GST.

[KASTURI SETHI]

If duty is paid without any authority of law or collected by the department with out any authority of law, it is unconstitutional action and refund is admissible. Ensure that salt does not attract duty. As you have mentioned that you have not passed on the burden of duty to the buyer, it means you have paid duty out of your pocket and refund claim shall not be hit by the principles of unjust enrichment.

[RAJINDER SAREEN]

Sethi ji, thanks.

[RAJINDER SAREEN]

Will the refund of amount unconstitutionally collected by the department be hit by time limitation ?

[KASTURI SETHI]

Not at all. There is a case law on this issue in your favour.

[KASTURI SETHI]

Tax or duty collected unconstitutionally does not conform to the definition of tax or duty. It is an amount. Hence time bar limitation not applicable.

[YAGAY and SUN]

Since Salt is Exempted in GST Regime, therefore, charging or paying it inadvertently, will not make it bar by limitation. We duly endorse the views of Sethi Sir.

AI Summary

Unconstitutional collection of tax: recoverability of amounts charged without statutory authority, despite lack of burden shifting.
Refund of GST paid on importation of an exempt good depends on whether the charge was made without legal authority. A refund claim based only on non passing of the tax burden is not a valid ground, but amounts collected unconstitutionally or without statutory authority are recoverable as unauthorised payments; such recoveries are not ordinarily subject to unjust enrichment objections if the payer bore the cost, and limitation periods applicable to valid taxes may not bar recovery of unauthorised collections.