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

Relevant date for refund: whether corrective DRC 03 payment, not original GSTR 3B filing, triggers limitation period.
The core issue is whether the "relevant date" under Section 54(1) for a refund claim is the date of the original GSTR 3B payment or the date of the corrective DRC 03 deposit. The RTP argues, invoking Explanation (2)(h), that the DRC 03 payment is the operative date because the excess payment only crystallised upon that corrective deposit; the revenue contends limitation runs from the original return payment date. The draft response advances the causal link and accrual arguments to support reckoning limitation from the DRC 03 date.