GST Refund

[SANJAY JAIN]

we have filed the refund claim for our client under inverted duty structure. The show cause was issued and the refund claim was rejected in February 2020. We want to reapply for the refund claim. The GST portal is not allowing the file the refund claim again for the same period. How to file the GST refund claim again?

Thanks in advance

Sanjay Jain

[Kashish Gupta]

Did he pass RFD-06 rejecting the refund claimed fully?

[SANJAY JAIN]

Yes, the order has been passed and input credit amount has been re-credited to electronic credit ledger in March 2020.

[KASTURI SETHI]

It is an appealable order. You are to file appeal against this order with the Commissioner (Appeals) under Section 107 of CGST Act. Also see the procedure laid down under Board's Circular No.111/30/2019-GST dated 3.10.19. If the appeal is decided in your favour, only then you can apply for this refund claim.

[Sandeep Garg]

Agreed with reply given above.

The appeal is required to be filed within a period of three months from the date of communication of order. However, extension for one month is allowed but that extension is subject to condonation of delay by appellate authority.

Also, as on date, appellate procedure is fully electronic. We have experienced that many appellate authorities are also not accepting appeal manually because there is no such legal authorisation to accept manually. Therefore, some ground challenges may be faced by you for submission of appeal. In case you face any such issues, kindly prefer submission appeal through email. Prefer to digitally sign the pdf documents.

As a part of procedure, a letter should be written to jurisdictional officer as well as nodal officer requesting to remove glitch faced on GSTN portal for submission of appeal. Copy thereof can be marked to GSTN as well.

[SANJAY JAIN]

Thanks Kasturiji and Niranjanji for your reply.

There are option available to registered person

1) To resubmit the refund claim again if the refund has been rejected by the Department. However the GST portal is not allowing to resubmit the refund application again under same category for same period. This is a GST portal issue and how to resolve it?

2) Second option will be to file the appeal. When the refund was rejected, the amount claimed was not re-credited to the credit ledger. The department has asked to submit an undertaking on the letterhead that the appeal will not be filed. After submission of the undertaking, the input credit amount was re*credited to credit ledger. Can the appeal be filed even after submission of the undertaking?

Look forward for the guidance under both option.

Thanks and Regards,

Sanjay Jain

[KASTURI SETHI]

1.It is not a Common portal issue. You cannot re-file the same refund claim. Sanction or rejection order of refund claim is Order-in-Original. As per procedure, an appeal is to be filed but in the event of an undertaking given to the department, you cannot file an appeal against this rejection order. Go through Explanation No.2 given in Rule 87 of CGST Rules.

Explanation 2. - For the purposes of this rule, it is hereby clarified that a refund shall be deemed to be rejected, if the appeal is finally rejected or if the claimant gives an undertaking to the proper officer that he shall not file an appeal.

If an undertaking to the effect that you will not file appeal, has been given you cannot file appeal.

Suppose you file an appeal in spite of an undertaking to the Department, the appeal will be rejected. That amounts to challenge the validity of rule. Also go through para no.23 of Circular No.125/44/2019-GST dated 18.11.19 as amended.

[SANJAY JAIN]

Dear Kasturiji,

Thanks for your guidance. The restriction as per the para no 23 of circular no 125 is related to ineligible input credit. In the current case, there is no questions of in-elgibility of the input credit claim.

Further, as per CGST Rule 90, if there is a deficiency in the documents, the fresh refund application can be filed on the common portal. Although rule provides for resubmission of the application, the portal does not provide the facility,

Is there any option to re-submit the refund claim?

[KASTURI SETHI]

You have crossed the stage of 'deficiency memo'. That was available prior to the passing of OIO. Now Order-in-Original has been issued. So you cannot re-submit the same refund claim. Such re-submission tantamounts to review its own order. No court can review its own order except Supreme Court. This is the legal position. Thus you cannot re-submit.

[SANJAY JAIN]

Thanks Kasturiji,

The deficiency memo was not issued. The show cause for refund rejection was issued. The reply was submitted for the show cause notice, however the refund rejection order was issued subsequently. Can the facility of resubmission of refund claim as per rule 90 be availed?

Regards,

Sanjay Jain

[KASTURI SETHI]

Rule 90 of CGST Rules does not help you.

[KASTURI SETHI]

W.r.t.serial no.2 dated 9.6.20, pl.confirm whether the department re-credited the amount in question into your Electronic Credit Ledger on its own or after calling for an undertaking from you to the effect that you will not file an appeal against OIO . Pl.clarify whether you have given the above undertaking to the department in writing.

[SANJAY JAIN]

Dear Kasturiji,

The department has re-credited the amount of input credit claimed as refund only after submission of the undertaking.

Regards,

Sanjay Jain

[KASTURI SETHI]

Then doors are closed. You have yourself closed your doors. No use of filing appeal now. It is just a wastage of time, money and energy. SCN was also an opportunity given by the department to defend your stand/interest.

[Ganeshan Kalyani]

Sri Kasturi Sir, well replied. Straight and too the point. I immediately, bookmarked this Issue Id for my reference.

[CSSANJAY MALHOTRA]

Appreciate Sh Kasturi ji for the opinion put forth. Brief and concise. Thanks.

[Alkesh Jani]

Dear Sanjayji,

I agree with the views expressed by our expert. If the amount of refund is considerable, then with the help of some expert, you can file petition before high court with proper ground. But again the view expressed by Shri Kasturiji, is to be kept in mind.

Thanks

[KASTURI SETHI]

With reference to the views of Sh.Alkesh Jani Ji, I further opine that there is no use of flogging a dead horse.

[CSSANJAY MALHOTRA]

Dear Alkesh ji,

Sh Kasturi ji rightly putforth that when the refund amount itself is credited to party's ELedger account upon his declaration, then what will he get from litigation. No Cash refund as amount already in his ledger and he might use same in future.

[Alkesh Jani]

Shri Sanjay Malhotraji,

The issue here is with regards to refund of inverted duty structure, as the input tax credit is going to accumulate on recurring basis and will stand balance in the credit ledger. After a period, it will be huge amount which can be utilize for the payment of tax.

Moreover, here the querist is seeking some solution for that accumulated credit which will be in their credit ledger and as the refund is rejected same is credited to their ledger, the fact is if the querist was able to utilize the same, he could have not gone for refund. Further, to accumulate the credit is not the intention of the querist.

Above all, I have clearly mentioned to keep in mind the views expressed by our experts, but if the amount is considerable and will be accumulated in future also, it is wise to go for appeal, so that the issue will stand clear for the querist for future accumulated credit.

Thanks

[CSSANJAY MALHOTRA]

Dear Alkesh ji,

My submission is to go through query raised again.

AI Summary

GST Refund Claim Rejected Under Inverted Duty Structure; Section 107 Appeal Blocked by Undertaking; Legal Options Discussed A discussion on a GST refund claim under the inverted duty structure reveals that the initial claim was rejected, and the GST portal does not allow resubmission for the same period. Participants suggest filing an appeal with the Commissioner (Appeals) under Section 107 of the CGST Act. However, an undertaking not to appeal was submitted, leading to re-credit of the input credit. This undertaking prevents further appeal. Suggestions include pursuing legal action through the High Court if the refund amount is significant, or claiming a refund post-GST Department Audit for that period. The discussion also addresses procedural challenges and provides advice on navigating the GST portal and legal framework.