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Relevant date under Refund, Goods and Services Tax - GST

Issue Id: - 116253
Dated: 1-5-2020
By:- Ashiesh Prremji
Relevant date under Refund

  • Contents

Dear Sir,

Please clear what will be "Relevant Date" in case of Refund for tax paid in wrong head CGST/SGST instead of IGST & Vice-Versa? Which date of payment shall be considered for 2Yrs. computation, whether its date of payment in wrong head or date of payment in correct head ?

Thanks for your kind attention!

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Showing Replies 1 to 15 of 18 Records

1 Dated: 1-5-2020

Date of payment of tax under wrong head (Type of tax). See Explanation 2 (h) below Clause 14 of Section 54 of CGST Act.

2 Dated: 1-5-2020
By:- Ashiesh Prremji

Dear Sir,

Thanks for your reply Sir!

As per explanation 2 sub-clause (h) of Section 54(14) says only date of Payment of tax will be Relevant date. It means if we paid tax in CGST/SGST in July 17 & after GST audit only came to know that we need to pay in IGST in Jan 20,accordingly if tax is paid in correct head in Jan 20. So now 2Yrs completed from July 17 as per above explanation & refund cann't be filed.

My query is what can be done in above situation to get refund of payment made in wrong head?


3 Dated: 1-5-2020

Suppose GSTR 3 B return for July, 17 was filed on 20.8.17. You made the payment wrongly on 20.8.17. You could apply for refund claim on or before 19.8.19. That amount of tax which was wrongly paid is to be applied for refund and not that amount which you have correctly paid under correct head. Under Section 77 of CGST Act, no interest is payable for payment of tax under incorrect head.. No other relaxation is admissible. Regarding time bar limitation, no relaxation is available to you. Nobody can go beyond law. There is no remedy if refund claim is hit by time limitation.

If you have come to know late in January, 20 that has no basis.

4 Dated: 2-5-2020
By:- Rachit Agarwal

If Refund has become time barred, refund can be claimed by way of Writ u/s 18 of Indian Contract Act, 1872. Supreme Court in case of Mafatlal Industries

5 Dated: 3-5-2020

There is a wide gulf between the definitions of 'Refund' pertaining to pre-GST era ( Central Excise/Service Tax) and post GST era (CGST Act).

6 Dated: 3-5-2020
By:- Kashish Gupta

Dear Ashimesh Prremji

If we read section 77 of the CGST Act, 2017 it appears that law says that refund shall be provided. Phraseology of this section is very different from section 54 of the CGST Act wherein it is provided that refund application has to be filed within a period of 2 years from relevant date. Therefore, in my view, relevant date shall not be a problem in your case and it should not be as the taxes has already been paid and it's merely a case of adjustment between taxation heads.

Also, when refund would be lodged, there is no need to pay IGST first and then claim refund of CGST/SGST. It can be argued that proper officer will adjust the IGST dues from refundable amounts of CGST/SGST.

Non-applicability of relevant date can further be argued from the use of words "held" in section 77 of the Act.

7 Dated: 3-5-2020

For filing refund claim under CGST Act, there is only one Section (54) and here is 54(8)(d) of CGST Act.

(d) refund of tax in pursuance of section 77; Section 77 is not independent.


8 Dated: 3-5-2020
By:- Ashiesh Prremji

Thanks a lot for expressing your views!

From above discussion, it seems there is no remedy under GST provisions if tax paid in wrong head is time barred & again gst has been paid in correct head.

is there any remedy if we go for excess payment of tax u/s 54(8)(e), which we have paid later in correct head ?

9 Dated: 3-5-2020

Sh.Ashiesh Prem Ji,

In this scenario, the relevant question is which amount of tax has been paid in excess. As already mentioned, amount of tax paid correctly cannot be treated as 'excess'. Moreover, time bar limit is also applicable to Section 54 (8)(e). Time bar limit is applicable to all sub-sections of Section 54. Time bar limit is also applicable to Section 77 because this section is integrally related to Section 54. In simple words, Section 54 allows refund under Section 77. also. Conditions are to be fulfilled. The words, 'any amount' mentioned in Section 54 includes all amount whether in the form of tax or otherwise.

10 Dated: 3-5-2020
By:- Ashiesh Prremji

Thank you very much to all of you for giving your precious time!

So final conclusion is, we can't get refund of tax paid neither under wrong head due to time barred nor gst paid in correct head as it will not treated as excess payment of tax eligible for refund.

In this scenario, means only observation to be given under GST Audit not payment to be made.

11 Dated: 15-7-2020
By:- Dinesh Tambde

It appears that, there is a scope for argument that limitation period specified in Section 54 is directory and not mandatory as the word "may" is used in sub-section (1) of Section 54 and not "shall". Further there is a scope to say that annual return is a self assessment which resulted liability to tax under CGST/SGST and eventually refund of IGST. Therefore, "date of payment of CGST/SGST" is the relevant date for claiming IGST. Although Section 54(1) talks about refund of tax paid into Govt Treasury but Section 54(14)(2)(h) does not specifically contemplates the date of payment of excess or wrong tax for calculating limitation period.

12 Dated: 15-8-2020
By:- Baljit Khara

Article 265 of the Constitution of India says: no tax can be levied or collected without the authority of law. A registered person paying tax in a wrong head is not an evader. The relevant part reads: "... shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribed." The word "shall" used here is in the sense of "must" as per such usage of this word in the legal texts. "Prescribed" as per clause (87) of section 2 of the CGST/SGST Act "means prescribed by rules made under this Act..." The corresponding rule is 89 which covers all refunds excluding refund under Section 55 only. It is pertinent to mention that section 54 is not mentioned as such in sub-rule (1) of Rule 89; refund under section 77 of CGST/SGST Act or section 19 of IGST Act, as the case may be are specifically covered under Rule 89(2)(j). There is no mention of application of the provisions of section 54 in section 77 as we find at certain other places, e.g. sections 10(5), 21, 35(6) & 129(2) etc. where provisions of certain other section have been made applicable mutatis mutandis .

Mention of "refund of tax in pursuance of section 77" in section 54(8)(d) is apparently clarificatory to the fact that merely collecting of tax amount which was paid in wrong head(s) (CGST+SGST/UTGST instead of IGST or vice versa u/s 77 CGST Act or u/s 19 of IGST Act) does not debar the the person from claiming the refund on "unjust enrichment" principle as he has now paid tax in the correct head(s) which was already paid in wrong head(s). No enrichment is there. Section 77 & 19 clearly stipulate that No interest is demandable when the payment is made under the correct head as the tax amount (or the amount equal to the correct head(s) tax amount) was with the exchequer.

There is no time limit specified in section 77 of CGST Act within which the supply can "...subsequently held to be inter-State supply" or in section 19 of IGST Act to hold a supply as "inter-State supply". It simply means when it is held so, the refund of wrongly paid tax "shall" be granted. Therefore, in view of this author no limitation appears to be there in section 77 of CGST Act or section 19 of the IGST Act as the case may be which are directly covered under Rule 89 of CGST Rules as made applicable to IGST also and SGST Rule respective Rules. The author is of this humble view that the provisions which are not there, should not be invented.

The views expressed here are strictly personal views of the Author based on the analysis of the legal provisions and do not express views of any other organisation, entity or agency whatsoever.

13 Dated: 16-8-2020
By:- Baljit Khara

Dear Sir,

This is in continuation to my reply dated 15.08.2020 above. Rule 89 covers all refunds except refund under Section 55 and refund of IGST paid on goods exported out of India.

It is a fact that section 77 of the CGST Act and section 19 of IGST Act do not start with non obstante: "NOTWITHSTANDING" with regard to provisions of section 54 of the CGST Act, however, they also do not contain any wording like "subject to the provisions of ....." referring to any other section including section 54, as many other provisions such as section 10(1), 10(2A), 16(2)(c), 60(5) etc. contain such provisions referring to some other section. Both the sections only stipulate that the amount of tax(s) so paid [under wrong heads] shall be refunded "in such manner and subject to such conditions as maybe prescribed" and the manner and conditions are prescribed in Rule 89 of the CGST Rules. Further, there is nothing to suggest that rule 89 is under section 54 only, it is a rule for procedure for filing refund under GST except to specific exclusions.

In view of the above discussion, it appears that the refund under section 77 of CGST Act or section 19 of the IGST Act (both sections have to be read together) beyond two years may not be a gone case but a case worth contesting before the learned adjudicating authorities and if required, before the higher appellate authorities/Forums.

14 Dated: 16-8-2020

The word, 'may' is enabling word. Enabling words are construed as compulsory whenever the object of the power to effectuate a legal right.

The word 'may' was also mentioned in Section 11B of Central Excise Act and now it is mentioned in Section 54 of CGST Act. The word, 'may' does not give freedom of coming out of the clutches of 'time bar limit'.

The refund claimant is statutorily bound to file refund claim within two years from the relevant date. There is no hope of any relaxation from any court.

15 Dated: 16-8-2020
By:- Baljit Khara

Dear Sir,

The refund under section 77 of the CGST Act / section 19 of the IGST Act arises only when the supply is "held" inter-State or intra-State contrary to the original position when the tax was paid by the registered person, when there is no time limit for such "holding", how we can expect a registered person to have premonition that his 'this' or 'that' supply is going to be held "inter-state" in place of "intra-state" or vice -versa and file refund within two years (in advance), when that "is held' happens in third year or later?

Any issue cannot be prejudged or decided without looking at the counter argument. It is humbly submitted that let the real stake holders "the registered person" or the GST Department or the adjudicating authority or the appellate authority or the higher appellate forums, take informed decision(s) in such cases on the basis of the facts of the particular case and legal provisions. The facts of the situation are not so ambiguous, attempt has been made in this and the previous posts to analyze them threadbare. GST is a new law, we have to think in the light of the stipulated provisions of this law only and not on the basis of provisions in the previous laws or any conjectures.

Rest is with the enlightened readers of this esteemed FORUM, the affected registered persons and/or the concerned authorities to decide the issue. The purpose of this post is just to make a humble attempt to put forth an alternate view on the query on the basis of analysis of facts and legal provisions without any claim for any definite final outcome. Nothing more to add.

The views expressed here are strictly personal views of the author and not of any organization or entity whatsoever.


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