TaxTMI 
TaxTMI 
2026 (9) TMI 1408
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....de ARN: AA1912230259281 dated: 16-12-2023 for the period from April-2022 to March-2023. The said refund claim has been acknowledged vide Acknowledgement no: ZM1912230269072 dated: 19-12-2023. a) As per Section 54(1) of the CGST Act, 2017, "Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of 2 years from the relevant date in such form and manner as may be prescribed. As per Explanation 2(e) to Section 54(14) of the CGST Act, 2017, relevant date means: In the case of refund of unutilised 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; In the instant case, it is observed that the refund application has been filed for the period from April-22 to March-23. Due date for filing return under Sec. 39 for April-2022 was on 20th May-2022, whereas the refund claim has been filed on 16th Dec-2023. Hence, I find that the instant refund claim has been filed within the limitation of time as provided under Sec 54(1) of the CGST....
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.... 0 0 3. Refund Amount Inadmissible: 0 0 0 0 4. Gross Amount to be paid (1-2-3) 1,00,000 0 0 1,50,000 0 0 1,50,000 0 0 0 0 0 5. Amount adjusted against outstanding demand 0 0 0 6. Net amount to be paid 1,00,000 0 0 1,50,000 0 0 1,50,000 0 0 0 0 0 Note : "T" stands for Tax; "I" stands for Interest, "P" stands for Penalty I hereby sanction an amount of Rs. 4,00,000/- To M/s Siddharth Agarwala, having GSTIN:198UPA1802M1Z6 under Section 54 of the CGST Act, 2017". [2]. Aggrieved by the said refund sanction order passed by the adjudicating authority, the revenue preferred an appeal under Section 107(1) of the Central Goods and Services Tax Act, 2017 (hereinafter called 'the CGST Act, 2017') before the first appellate authority mainly on the following grounds : i) In view of para 3.2 of CBIC Circular No.135/05/2020-GST dated 30.11.2020....
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.... regarded as same goods. iv) As a result of paying higher rate of GST on the inward supply of raw materials/inputs as compared to the rate of GST payable on outward supply of Agarbati, the taxpayer obviously accumulated unutilised input tax credit on account of Inverted Tax Structure within the meaning of clause (ii) to the first proviso to Section 54(3), CGST Act, 2017. v) Para 3.2 of the said circular No.135/05/2020-GST dated 31.03.2020 is not applicable in this case because paragraph 3.2 of the said circular of 2020 merely clarifies that refund under clause (ii) of Section 54(3) is not admissible where the input and output supplies are same goods, though attracting different rate of tax at different points of time. In the present case the input and output supplies are completely different and distinguishable Under the premises aforesaid, the taxpayer has contended that the revenue's appeal is devoid of merit and as such it is liable to be dismissed. [6]. We have heard Mr. Apurba Saha, learned Advocate appearing along with Ms. Priyashi Jajoo, Advocate appearing for the respondent. Ms. Jajoo, learned Advocate has vehemently argued that this case is squarely co....
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.... (2) xxxxxx (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be allowed in cases other than- (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. [10]. Undisputedly, the taxpayer paid higher rate of GST ranging from 12% to 18% on the inputs purchased by him compared to the rate of GST on his output supplies. What is inputs is defined in clause (59) of Section 2, CGST Act, 2017. As per clause (59) of Section 2, inputs mean any goods other than capital goods us....
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....n the cases governed by clauses (i) and (ii). Clause (i) deals with zero-rated supplies without payment of tax. Explanation 1 to Section 54 clarifies that the expression "refund" includes refund of tax paid on zero-rated supplies on goods or services or both, or on inputs or input services used in making such zero-rated supplies. On the other hand, in the case of deemed exports, Ex Explanation 1 refers to a refund of tax on the supply of goods. Likewise in regard to domestic supplies, governed by clause (ii) of the first proviso, the expression "refund" means refund of unutilised ITC as provided under sub-section (3). With the clear language which has been adopted by Parliament while enacting the provisions of Section 54(3), the acceptance of the submission which has been urged on behalf of the assessee would involve a judicial re-writing of the provision which is impermissible in law. Clause (ii) of the proviso, when it refers to "on account of" clearly intends the meaning which can ordinarily be said to imply "because of or due to". When proviso (ii) refers to "rate of tax", it indicates a clear intent that a refund would be allowed where and only if the inverted duty structure h....
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....tory note in paragraph 3.2, CBIC has clarified that refund of accumulated ITC under clause (ii) of sub-Section (3) of Section 54 of the CGST Act, 2017 would not be applicable in cases where the input and the output supplies are same. [16]. The CBIC amended paragraph 3.2 of Circular No. 135/05/2020-GST dated 31.03.2020 by issuing a subsequent clarification vide Circular No. 173/05/2022-GST dated 06.07.2022. The relevant paragraph 4 of the said circular dated 06.07.2022, reads as under : 4. Therefore, it is clarified that in such cases, refund of accumulated input tax credit on account of inverted structure as per clause (ii) of sub-section (3) of section 54 of the CGST Act, 2017 would be allowed in cases where accumulation of input tax credit is on account of rate of tax on outward supply being less than the rate of tax on inputs (same goods) at the same point of time, as per some concessional notification issued by the Government providing for lower rate of tax for some specified supplies subject to fulfilment of other conditions. Accordingly, para 3.2 of the Circular No. 135/05/2020-GST dated 31.03.2020 stands substituted as under: "3.2 It may be noted that re....