Refund of IGST paid on export of services, Goods and Services Tax - GST

[Archna Gupta]

Dear Experts

Please suggest if there is any way to file refund of IGST if two years have expired from the date of receiving the amount in foreign currency or is there any extension for filing refund if two years expired in February 2020. Please reply.

Regards

Archna Gupta

Posts / Replies

[Mahir S]

The 2 year period is to be counted from the relevant date.

[KASTURI SETHI]

No hope. Govt. is very strict regarding time bar limit.

[Mahir S]

As of now, there is no way of filing such refunds.

However, you may keep yourself updated on any latest case law pertaining to the said issue or any clarification/circular from the department in the future.

[KASTURI SETHI]

This claim cannot be covered by even relaxation granted due to Covid-19. I do not think any case law or circular will help.

[Ganeshan Kalyani]

Sir, it is a bitter truth that "ignorance of law is not an excuse". If by any way you justify that two years time limit to file refund application was not known, the law is not going to help. It is on a very rare and exceptional cases the relief is given. Like in the case of M/s. Bharti Airtel Limited = 2020 (5) TMI 169 - DELHI HIGH COURT, the Honorable High Court of New Delhi has allowed the petitioner to revise GSTR-3B for initial period of GST.

[Ganeshan Kalyani]

Sir, due to this current situation, Govt. has relaxed the compliance (except some) falling between 20.03.2020 to 30.08.2020. However, the compliance need to be done on 31.08.2020.

[KASTURI SETHI]

But in this situation the date of filing claim expired in Feb.,20 before the Covid 19.

[KASTURI SETHI]

If the party decides to file refund claim which is time barred, the matter travel to the Supreme Court.

[Alkesh Jani]

Shri

All the experts have explained the situation very well and I agree with the views. however, if the amount is considerable, you may file appeal to HC with proper ground and challenging the provisions of two years being ultra vires.

[Ganeshan Kalyani]

Yes, sir the time period elapsed of the querist does not fall between the relaxation period.

[rajkumar shukla]

some experts are of view that section 54(3) does not talk about relevant date therefore for claiming refund of IGST ,relevant date will not apply.Whatever be the relevant date,for claiming refund exports, since it is not mentioned in 54(3), it will not apply.it will apply only where it is mentioned like 54(1). refund can be claimed at the end of ANY TAX PERIOD.Relevant date is only for section 54(1)

[KASTURI SETHI]

No. Sir. Pl. read Explanation below sub-section (14) of Section 54 of CGST Act. Emphasis is on the words, "purposes" and "This Section". It is not 'purpose' rather it is 'purposes'. Thus the words, 'this section' and 'purposes' relate to all sub-sections/clauses of Section 54. This section means the whole Section 54. One cannot read sub Sections (1) and (3) 54 in isolation. The period of two years is for all types of refunds/rebates. The method of computation of two years differs but the refund claim has to be filed within is two years from the relevant date.

In this context, it is also expedient and necessary to go through the definition of 'refund'. Refund is also covered by Section 20 (xiii) of IGST Act which makes IGST applicable to CGST Act.

Explanation. - For the purposes of this section, -

(1) “refund” includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3).

(2) “relevant date” means -

(a) ------------------

(i) ----------------

(ii) ------------------------

(iii) -----------------

(b) -------------------

c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of -

(i) receipt of payment in convertible foreign exchange [or in Indian rupees wherever permitted by the Reserve Bank of India], where the supply of services had been completed prior to the receipt of such payment; or

(ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice;

[rajkumar shukla]

The issue is still debatable one..the implication of relevant date would be those sections where ever it appears.words End of any tax period .repeat ANY loose relevance if two year period limitation is in voked.

[Alkesh Jani]

Dear Experts,

The issue or query raised is with regards to IGST Paid on export of service, while Section 54(3) deals with refund of unutilized ITC, which is not applicable in the instant case. Therefore, Section 54(1) is applicable in the instant case and time limit of two years is applicable from the relevant date.

[rajkumar shukla]

Agreed,and sorry.i missed this important aspect that question relates to simple refund of IGST.

[KASTURI SETHI]

Refund/rebate claim of IGST paid on export of services is admissible as per Section 16(3)(b) of IGST Act. As per Section 16(3)(b) of IGST Act, such refund is to be claimed/sanctioned in accordance with Section 54 of CGST Act or the rules made thereunder. The provisions of CGST Act and Rules made thereunder have made applicable to IGST Act by virtue of Section 20 of IGST Act.

[Alkesh Jani]

Shri Rajkumar Sire,

You don't need to be sorry, in fact, it was over sighted. To err is human and seldom people accept their mistake, this clearly reflects your greatness and it is said "Great man makes everyone feel great" and I am feeling great.

With due regards

[Mahir S]

Well said Alkeshji...Proud of U..

[Mahir S]

The Chhattisgarh High Court has asked the local GST Commissioner to refer the matter of granting more time to file claim for transitional credit to those assessees who could not do it in time due to technical glitches to the GST Council.

Transitional credit, or CENVAT credit, refers to the use of tax credit accumulated up to June 30, 2017, the last day of the erstwhile Central excise and service tax regime.

“In the event, if the Commissioner, Commercial Tax, makes a reference to the GST Council, it is expected that the Council also, in turn, takes an early decision on the reference made by the Commissioner preferably within a period of 90 days from the date of receipt of reference by the Commissioner,” a single judge bench said in its ruling.

Under the GST law, Section 117(1)A, the GST Council has been empowered to extend the date for submission of the declaration electronically in Form GST TRAN-1 for those persons who could not submit it by the due date on account of technical difficulties on the portal.

In a petition , petitioner Dhamtari Krishi Kendra said he tried to file claim for CENVAT credit before due date of December 27, 2017, but could not do so because of technical glitches. Immediately, he reported the matter to the tax department. He subsequently submitted the return manually in January, 2018 and also sent a copy through post. Both were not accepted by the department which made him approach the high court. The court subsequently asked him to approach the Nodal Officer. He, however he was denied permission to submit the claim. So, he went back to the court.

The court took note of elements which Tax Commissioner overlooked. These include proofs supporting the petitioner’s claim of not able to file the return due to technical glitch, the submission of complaint before due date and submission of the form manually and also through the post within three weeks from due date. “Accordingly, this court remits the matter back to the Commissioner, Commercial Tax, for a reconsideration and for passing of a fresh order,” the ruling said while adding he/she should keep all the documents submitted by the petitioner in the mind and decide within 60 days.

If required, the Commissioner can refer the matter to the GST Council, the court said.

Divakar Vijayasarathy, Founder and Managing Partner of DVS Advisors LLP, said the decision highlights the apathy in the system which refuses to be tax-payer friendly. “As much as we need to respect law, circumstances like these need to be viewed from the spirit rather than the letter alone. Further inability to comply with for reasons beyond the control of the tax payer should always be viewed from a benign perspective.

“With a legal system which is saddled with a huge backlog and an archaic executive framework, the country needs significant reforms to get anywhere close to our ambition of being business friendly,” he said.

[SURAJ SHARMA]

Hi Archan,

it would better help, if you send request to IECgate customer id with mentioned your compnay IEC number and GST numbre.

You will get solution next 24hrs from them.

Regards

Suraj Sharma