Clarification on relevant date to be considered as per Sec 54.

[GAURAV SHARMA]

The RTP had paid taxes through electronic credit ledger by filing GSTR-3B returns for the FY 2021-22 whereas as per Rule 86(b), they were required to pay 1% of the tax liability through the electronic cash ledger.

Now, in FY 2024-25 during the audit conducted u/s 65, the department pointed out this discrepancy and henceforth, RTP made the relevant payment of 1% through DRC-03.

And subsequently filed for a refund of the excess taxes paid on this account. However, the department issued a RFD-08 (SCN) stating that the refund application is time-barred since, the relevant date for calculating the 2-year limitation period under Section 54 is the date of payment of taxes (GSTR-3B - filing date) for the concerned periods i.e the date when the original return for the period was filed.

We are of the view that the date of actual payment through DRC-03 should be considered the relevant date, as this is the point of incidence at which excess payment of taxes arose.

AI Summary

Taxpayer Challenges Time-Barred Refund Claim Under Rule 86(b), Arguing Corrective Payment Date Validity A registered taxpayer initially paid taxes through electronic credit ledger for fiscal year 2021-22, contrary to Rule 86(b) which mandates 1% payment via electronic cash ledger. During a fiscal year 2024-25 audit, the taxpayer rectified the discrepancy by paying through DRC-03 and subsequently filed a refund claim. The tax authority issued a show cause notice claiming the refund was time-barred, but the taxpayer argued the relevant date should be the DRC-03 payment date, not the original GSTR-3B filing date.