Relevant date under Refund, Goods and Services Tax - GST

[Ashiesh Prremji]

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!

Posts / Replies

[Srinivasan Krishnamachari]

Discussion was already held on sound lines by many learned members. However, this is not so explicitly provided in the Acts and hence the query. The application of Sec 54 can't be ruled out, in view of the specific connection it bears upon Sec 77/ under 54(8)(d), regarding disbursal of it in cash. However, it is implied that no unjust enrichment test is necessary in view of mention of 77 under 54(8) (d). Also 77/19 respectively, waive imposition of any interest at the time of deposit of tax for the original supply, made afresh under CGSTA/IGSTA as the case may be. When a new supply is recognized in place of old short of the new tax, meaning without interest, the element of time for demand of tax also stands waived. The justification for the same is found in the tax paid already in the credit of the Exchequer of the center. This not a case of an amount collected without the authority of Law as envisaged under Article 265,since taxable supply is made but the type of tax paid under the tax head alone is wrong. Therefore, as a natural corollary to the leeway provided under 77/19 to make the fresh deposit without interest and also without involving sec 73, so also the refund if any may be made without any time limit under the Act. Here, no exception to Sec 50 or sec 73 is made but the non applicability of interest is explicitly stated in 77(2)/19(2) for fresh deposit of tax for a back dated supply. In the same manner, refund application for the tax remitted under wrong tax head CG/IGST as the case may be, has to be preferred only under 54. Refund is to be granted through PMT-04 I think. I don't know if there's a patch made to overlook time limit of 2 years in the portal. Similarly, I am not sure of the provision in the portal for waiver of interest under 77/19 as well. But, principally, both cases of deposit and release of the tax money by refund, belonging to different tax heads is a simultaneous process, endowed with the same immunity of time. It's a mutual swap between account heads which was managed by the PAO, but due to the involvement of Articles 246 A(2)/269 A(1) to(4), a new deposit is insisted even as a new refund is assured, with no interest on either side and with no time limit or unjust enrichment test either. But Rule 89 is made applicable automatically to all refunds as it's a procedural rule already in place by the mention of the word as prescribed, but one discovers nothing is prescribed to the above effect, to the contrary of granting the refund without imposing the time limit of 2 years, either in Sec 54 or 77/19 or rule 89. In the above back drop, by applying the doctrine of harmonious construction, the refund needs to be granted without time limit of 2 years in the same manner as the fresh deposit is required to be made, without time for demand of tax and interest. Hope I have done my best to explain the issue. Discussion was already held on sound lines by many learned members. However, this is not so explicitly provided in the Acts and hence the query. The application of Sec 54 can't be ruled out, in view of the specific connection it bears upon Sec 77/under 54(8)(d), regarding disbursal of it in cash. However, it is implied that no unjust enrichment test is necessary in view of mention of 77 under 54(8)(d). Also 77/19 respectively, waive imposition of any interest at the time of deposit of tax for the original supply, made afresh under CGSTA/IGSTA as the case may be. When a new supply is recognised in place of old short of the new tax, meaning without interest, the element of time for demand of tax also stands waived. The justification for the same is found in the tax paid already in the credit of the Exchequer of the center. This not a case of an amount collected without the authority of Law as envisaged under Article 265, since taxable supply is made but the type of tax paid under the tax head alone is wrong. Therefore, as a natural corollary to the leeway provided under 77/19 to make the fresh deposit without interest and also without involving sec 73, so also the refund if any may be made without any time limit under the Act. Here, no exception to Sec 50 or sec 73 is made but the non applicability of interest is explicitly stated in 77(2)/19(2) for fresh deposit of tax for a back dated supply. In the same manner, refund application for the tax remitted under wrong tax head CG/IGST as the case may be, has to be preferred only under 54. Refund is to be granted through PMT-04 I think. I don't know if there's a patch made to overlook time limit of 2 years in the portal. Similarly, I am not sure of the provision in the portal for waiver of interest under 77/19 as well. But, principally, both cases of deposit and release of the tax money by refund, belonging to different tax heads is a simultaneous process, endowed with the same immunity of time. It's a mutual swap between account heads which was managed by the PAO, but due to the involvement of Articles 246 A(2)/269 A(1) to(4), a new deposit is insisted even as a new refund is assured, with no interest on either side and with no time limit or unjust enrichment test either. But rule 89 is made applicable automatically to all refunds as it's a procedural rule already in place by the mention of the word as prescribed, but one discovers nothing is prescribed to the above effect, to the contrary of granting the refund without imposing the time limit of 2 years, either in Sec 54 or 77/19 or rule 89. In the above back drop, by applying the doctrine of harmonious construction, the refund needs to be granted without time limit of 2 years in the same manner as the fresh deposit is required to be made, without time for demand of tax and interest. Hope I have done my best to explain the issue. K. Srinivasan(IRS)

Sr. Associate

RANK Associates, Chennai

98404 64654

krishsri1959@gmail.com

[CA.Tarun Agarwalla]

in a similar case where the deficiency memo has been issued we present the case that the relevant date is the date when the corresponding correct taxes were paid. it is admitted and the refund order passed. even though the law is having apparent limitations one can try.

[Srinivasan Krishnamachari]

Dear Ashish Premji,

Relevant under for refund under SEC 77/19 of CG/IG STA.

Relevant date under SEC 77/19 is undoubtedly the date of payment in correct head,as per my view in this matter.

I think I have already given a lengthy reply to the above query in this Portal.

l have written an article in addition to the above in another Portal sometime back in reply to the response sought by Mr.Sumit Srivatsava to the Article that he came across with a different/contrasting view.

Curious case of refund of tax paid to the wrong 'government' https://taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MzkzNTM=

.Please follow the link below to follow my response.

As per your request, here's my response. Please follow the link. https://taxguru.in/goods-and-service-tax/section-77-19-cgst-igst-act-replayed-redefined.html

Also I find Mr.Tarun Agarwala has shared his actual practical experience as follows.

"In a similar case where the deficiency memo has been issued we present the case that the relevant date is the date when the corresponding correct taxes were paid. it is admitted and the refund order passed. even though the law is having apparent limitations one can try".

I hope you have plenty of material before you and as also our readers to take a well informed decision in this issue,please.

Regards

K. Srinivasan (IRS)

Advocate/Sr. Associate

RANK Associates, Chennai