Is amendment in time limit for refund under sec 54 retrospective

[Kishore Dintakurthi]

One of my clients refund application (Inverted duty structure) was rejected on the ground that it is time barred.

Central Goods & Service Tax Amendment Act, 2018 has substituted the clause (e) of 2nd Explanation to Section 54 of the CGST Act, 2017, w.e.f. 01 .02.2019, which defines the relevant date for filling application for refund of unutilized input tax credit

The said clause prior to its substitution read as hereunder:

(e) in the case of refund of unutilized input tax credit under sub-section (3), the end of the financial year in which such claim for refund arises

“Whereas w.e.f. 01.02.2019, CGST Amendment Act, 2018 has substituted the above said clause with the clause reproduced as hereunder:

“(e) in the case of refund of unutilized input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises.”

Now, the basic question that is whether the substituted clause will have application only in relation to refund application filled for the tax period reckoning from the February, 2019 onwards or will also hit the refund application filled after the date 01.02.2019 even pertaining to the tax period(s) prior to February, 2019.

Please give your valuable views

[KASTURI SETHI]

The amended Section will also hit the refund claim filed on or after the date 01.02.2019 even to the claim pertaining to the tax period(s) prior to 1.2.19. For example; if any tax payer intended to file refund claim for January, 2019, the refund claim should have been filed on or before 20.2.19, it being last date for furnishing the return.

Effective date of amendment i.e.1.2.19 does not mean that it will effect the refund claim arising from Feb., 19.

[KASTURI SETHI]

The earlier words, '(e) in the case of refund of unutilized input tax credit under sub-section (3), the end of the financial year in which such claim for refund arises'. will not be effective for refund claim pertaining to the period prior to February, 19.

[Rajagopalan Ranganathan]

Sir,

The amendment is effective from 01.02.2019. It is prospective. It is applicable only to refund claims filed on or after 01.02.2019.

[Kishore Dintakurthi]

Dear sir

Are there any case laws to submit our views as part of reply to show cause that it is prospective and prepare for nss for appeal

[Kishore Dintakurthi]

* grounds for appeal

[KASTURI SETHI]

I am repeating if you file refund claim for January, 19, you will file by the due date in February, 19.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Rajagopalan.

[KASTURI SETHI]

Dear Kishore Dintakurthi,

Your case is at which stage whether at adjudication stage or appellate stage ? You are in search of case laws supporting the grounds of appeal. You have also mentioned about SCN. Will you please clarify ?

[Kishore Dintakurthi]

Dear Sir

My case is at adjudication stage. RFD 08 is served. We need to give reply in RFD-09. And it seems that chances of refund rejection is higher. So we are proposing to give reply in such a manner that keeping strong grounds for appeal for further stages

[KASTURI SETHI]

Dear Sir, Can you email scanned copy of SCN ? My email ID is in my profile in TMI.

[Bharat Garg]

Hi Kishore,

I beleive that the amendment should not affect the refunds pertaining to periods earlier than Feb 20. This is so because once the amendment nowhere specifies to be applicable to past period refunds and hence, any subsitution/repeal changes should be treated to be prospective and not be imposing additional burden/taking away benefits from taxpayers. Moreover, you can also try to take an argument saying that once taxpayer becomes entitled to a refund, timing is only a procedural aspect, which cannot take away the vested right to refund

[DR.MARIAPPAN GOVINDARAJAN]

It is prospective. However as suggested by Shri Sethi copy of SCN may be sent to him to his personal email id. He will clear your doubts.

[Bharat Garg]

Hi Kishore,

I am also facing a similar situation. While I am trying to build some legal arguments to claim earlier months refunds, wanted to check if you also have something made for this situation which could be useful before the tax authorities. If yes, would it be possible for you to share at [email protected].

Thanks

[durairaj sethuraman]

The amendment modifies accrued rights and creates new disability. It has to be taken as prospective. ITC accumulated or refund accruing prior to 1.2.2019 will continue to be governed by the erstwhile Explantation 2(e). Please refer to case law ASHISH KATIYAR VERSUS U.O.I. THRU. REVENUE SECY. MINISTRY OF FINANCE NEW DELHI & ORS - 2019 (11) TMI 1246 - ALLAHABAD HIGH COURT.

Naveena

Advocate

[KASTURI SETHI]

Timing can never be considered as procedural aspect. It is requirement of CGST Act.

[SHARAD ANADA]

Substitution of a provision results in its replacement by the new provision. Pl refer

Doosan Infracore India Private Limited Vs. The Assistant Commissioner, = 2020 (8) TMI 138 - MADRAS HIGH COURT
 

[A I]

Do we have any solution as to whether the change in time limit for filing refund claim would also apply to refund claims pertaining to period before 01.02.2019 BUT filed after 01.02.2019.

[DAULAT SINGHVI]

Recently I found a circular from Supreme Court applicable for all judicial courts, authorities which says the period starting from March 20 to March 21 , covid period, shall be excluded for calculation of limitation period. I put my query whether it will help in claim for refund of invertes ITC.

[Manohara Madineni]

To the best of my knowledge it should be only prospective, because the vested right of the assesse cannot be taken away.

If you need more details you can reach out to the in the mail I'd given in my profile

[Pankaj Shah]

So sir for GST Refund on account of inverted duty structure the last date to apply for refund application for the period 2019-20 from April to March the date applicable for it is 20-05-2021 or 20-05-2022

AI Summary

Amendment to refund time limit may apply to refund claims filed on or after effective date, affecting prior tax periods. Whether the substituted clause in Explanation 2(e) to Section 54 - which sets the relevant date for refund of unutilized input tax credit as the due date for furnishing the return for the period in which the claim arises - applies to refund claims filed on or after the amendment's effective date even where the tax period predates the amendment is contested; opinions in the discussion split between treating the change as applying to all claims filed on or after the effective date and treating it as prospective so pre-amendment refunds remain governed by the erstwhile explanation.