GST refund

[THYAGARAJAN KALYANASUNDARAM]

Dear friends,

One of my clients who export goods regularly with payment of tax u/s 16(3)(b). For Sep and Dec 2017, he filed the return and declared sales correctly in the GSTR-1 return in the appropriate column; however, in the GSTR-3B return, he showed in 3.1. (a) instead 3.1.(b). Because of this, they have not received a refund from the govt. But subsequent transactions, he was declared in the appropriate column and received the same automatically.

My query is

1. Is that two years limitation would apply

2. Since it is an automatic refund process should be done by the department; still two years limitation would apply

3. What is the next course of action to be taken to get this refund from the govt.

Please support me on this. If any citation, please share.

Thanks in advance.

[KASTURI SETHI]

Refund cannot denied on the ground of clerical or typographical error.

However, time limitation will apply. If you have not received refund, you should have applied for the same before expiry of period for claiming refund.

Now you will get refund only through litigation. Commissioner (Appeals) or Tribunal may grant relief. As per GST law, it is time barred. No departmental officer has power to allow time-barred refund claim. You can pin hope on the Appellate Authorities.

Once you must see the higher Officers of the department. There is no harm in trying your luck.

[Ganeshan Kalyani]

I agree with the views of Sri Kasturi Sir. You will have to approach the Customs authority and make a request. Since, it was initial period of GST, your request may be heard and resolved.

[THYAGARAJAN KALYANASUNDARAM]

Dear Sir,

As per my understanding, the Rule 96 of GST Rule, there is no application prescribed for applying refund for the assessee who paid the tax on exports u/s 16(3)(b) of IGST Act. Since it is automatic refund where is the question of limitation come in to play.

Please advice me on this.

Thanks in Advance.

[KASTURI SETHI]

Section 16(3)(b) of IGST Act is subject to Section 54 of CGST Act. An Act prevails over Rules. Anyhow you can get the benefit of Rule 96 (1) of CGST Rules inasmuch as typographical mistake has occurred on the part of the party/clamant. You will have to visit the office to make your position clear.

[KASTURI SETHI]

Rule 96 (1)(b) of CGST Rules says, "the applicant has furnished a valid return in FORM GSTR-3* [or FORM GSTR-3B*, as the case may be;]*.

The shipping bill shall be deemed as application for refund claim filed if the above condition is fulfilled. Since vital information is missing, at present your client does not qualify for the condition laid down in Rule 96(1)(b) of CGST Rules,2017.

Prior to the sanction of refund claim in this scenario, both columns 3.1(a) and 3.1(b) of GSTR-3 B have to be rectified in the return filed and that is possible only through the jurisdictional Range Officer/Deputy Commissioner, In-charge Division. After rectification, your client will be entitled to refund claim. The sword of 'time-bar' still will be hanging on your client in the absence of a valid return.

[Ganeshan Kalyani]

Sir, refer Public Notice No.100/2020 dated 14.08.2020 regading alternative mechanism to resolve invoice mismatch issue related to refund.

https://www.taxtmi.com/circulars?id=64228

[KASTURI SETHI]

DEAR THYAGARAJAN KALYANASUNDARAM Ji,

Sir, Do you treat your client's GSTR-3 B return as valid return ? I want your, 'reaction' (response) to enrich my knowledge. Regards.

 

[KASTURI SETHI]

Relevant extract of Board's Circular No. 125/44/2019-GST, dated 18-11-2019 as amended vide C.B.I. & C. Circular No. 135/05/2020-GST, dated 31-3-2020

Application for refund of integrated tax paid on export of services and supplies made to a Special Economic Zone developer or a Special Economic Zone unit

25. It has been represented that while filing the return in FORM GSTR-3B for a given tax period, certain registered persons committed errors in declaring the export of services on payment of integrated tax or zero-rated supplies made to a Special Economic Zone developer or a Special Economic Zone unit on payment of integrated tax. They have shown such supplies in the Table under column 3.1(a) instead of showing them in column 3.1(b) of FORM GSTR-3B whilst they have shown the correct details in Table 6A or 6B of FORM GSTR-1 for the relevant tax period and duly discharged their tax liabilities. Such registered persons were earlier unable to file the refund application in FORM GST RFD-01A for refund of integrated tax paid on the export of services or on supplies made to a SEZ developer or a SEZ unit on the GST common portal because of an in-built validation check in the system which restricted the refund amount claimed (integrated tax/cess) to the amount of integrated tax/cess mentioned under column 3.1(b) of FORM GSTR-3B (zero-rated supplies) filed for the corresponding tax period.

26. In this regard, it is clarified that for the tax periods commencing from 1-7-2017 to 30-6-2019, such registered persons shall be allowed to file the refund application in FORM GST RFD-01 on the common portal subject to the condition that the amount of refund of integrated tax/cess claimed shall not be more than the aggregate amount of integrated tax/cess mentioned in the Table under columns 3.1(a), 3.1(b) and 3.1(c) of FORM GSTR-3B filed for the corresponding tax period.

[Alkesh Jani]

Shri

I agree with the views expressed by our experts, however, In this case, limitation of two years will not be applicable as 'Shipping Bill' itself is an application, therefore, you have filed your claim (application) well within the time, however, you may follow the advise given by our experts.

[Bhavika Chothani]

Since this was a clerical/typographical error it is better if you raise your concern with Customs authority.

[RoopNarayan Bairwa]

Sir ,I am not posting reply but my question to Kasturi sir ,one taxpayer applying time barred refund again and again after rejection by proper officer ,what should do proper officer?

[KASTURI SETHI]

Sh.Roop Narayan Bairwa Ji,

Q. One taxpayer applying time barred refund again and again after rejection by proper officer ,what should do proper officer ?

Ans. The tax payer (Refund clamant) cannot do so. This is totally improper, irrational, illogical and not in letter and spirit of GST laws. The proper officer is to write a simple letter to the party and advise him to follow proper procedure. The clamant is supposed to file an Appeal to the Appellate Authority. Quote Section and Rule of CGST Act for this purpose. If the party is acting in an illegal way, it does not mean you should again enter the said application and again reject the same. A simple letter would suffice. Send email also. In the letter, you should also give the details of already rejected refund claim i.e. O-I-O No. date , amount, issue, tax period etc.Moreover, the party cannot file refund claim again on the same issue and same tax period.

AI Summary

Time-bar on refund claims can block automatic GST export refunds; correct returns or seek rectification and appellate relief. Clerical misclassification of zero-rated exports in GSTR-3B can block automatic IGST refunds; rectification by the jurisdictional officer and use of the shipping bill as a deemed refund application may enable refund processing if statutory return conditions are met. Time limitation under refund provisions remains applicable, administrative officers cannot grant time-barred refunds, and appellate or Customs remedies and alternative portal mechanisms are the practical routes for relief.