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TMI Blog2021 (12) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... Interest - July-2017 to March-2018. Rs. 4265/-. 2. Brief Facts of the case:- The appellant is a proprietorship firm having GSTIN 08ABAPP8937E1ZG filed refund application in Form RFD-01 amounting to Rs. 4,265/- vide ARN No.AA080920059969H dated 26.09.2020. On scrutiny of refund application submitted by the appellant, the adjudicating authority issued a Show Cause Notice in the Form RFD-08 dated 09.10.2020 and after considering reply/submissions of the appellant in Form RFD-09, the adjudicating authority rejected the refund claim amounting to Rs. 4,625/- and passed the impugned order in the Form of GST RFD-06 vide reference No.ZQ0811200030990 dated 03.11.2020. Further, the appellant was unable to download the order dated 03.11.2020 due to unexceptional error. Therefore, a copy of the said Order dated 03.11.2020 was received on 24.11.2020 from the jurisdictional adjudicating authority. 3. Being aggrieved with the impugned Order No.ZQ0811200030990 dated 03.11:2020, the appellant has filed this appeal on 23.02.2021 on the following grounds which are summarized as under:- 3.1 That the appellant is a proprietorship firm, engaged in manufacturing and exports of goods. Due to glo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest already paid on ITC mentioned herein there" 3.4 That the Finance Bill 2021 proposes to amend Section 50 of the Central Goods and Services Tax (CGST) Act to substitute the proviso to sub-section (1) so as to charge interest on net cash liability retrospectively with effect from the July 1, 2017. That the retrospective amendment will become effective and help in settling old matters. At the same time, those who have already paid higher interest can seek refunds. When the instructions for paying interest on net cash liability has been issued and there is no restriction on claiming refund on already paid interest. That when the government had made it clear by issuing instruction, there is no point to alleged that appellant has filed wrong refund claim as appellant has followed all the principles related to the provisions of law, since it has paid interest as required by jurisdictional authority at the time of cancellation of registration already and waited for the governments directions of payment of interest on net cash liability. The appellant has filed refund in FORM RFD-01 in relation to interest paid on tax paid through ITC for the period July-2017 to March-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No.16/2021-Central Tax dated 01.06.2021. Hence, it is evidently clear that interest on tax is payable on the portion of tax which is paid through Electronic Cash Ledger. The tax paid through Electronic Credit Ledger is not liable to interest as per Section 50 of the Act. This amendment to Section 50 has been made retrospectively effective from 01.07.2017 itself. Hence, any interest paid in excess of interest on tax portion discharged through electronic cash ledger is eligible for refund. 5. Personal hearing in the matter was held on 10.08.2021 through virtual mode. However, due to change of Appellate Authority, before deciding the appeal I am inclined to give an opportunity for personal hearing to the appellant. Therefore, personal hearing was held on 05.10.2021 through virtual mode, wherein Ms. Shuchi Sethi, CA/Authorized Representative of the appellant appeared for personal hearing. During the course of hearing she explained the case in detail and reiterated the grounds of appeal and requested to decide the case on merits. 6. I have gone through the facts of the case and the written submissions made by the appellant in their appeal memos as well as oral submission at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and additional submission in the matter. I observe that the appellant had filed the instant refund claim of interest of Rs. 4,265/- (Rs. 3015/- under IGST Head, Rs. 625/- under CGST Head & Rs. 625/- under SGST Head) through GSTN portal in Form of RFD-01 vide ARN No.AA080920059969H dated 26.09.2020 under "Any other" category in accordance with the provisions of Section 54(1) of the CGST Act,2017 read with Rule 89(1) of the CGST Rules, 2017. Ground of refund claim had been stated in the said refund application "claiming refund of excess interest paid in reference to late filing of returns, through DRC-03 filed on 01.03.2020 for the period 2017-18" that the appellant had paid interest in excess of interest on the tax liability paid in cash/net tax liability. Further, I observe that department issued a notice in Form of GST-RFD-08 to the appellant, wherein it has been mentioned that "the refund of Rs. 4265/- filed under section 54 of the CGST Act, 2017 is inadmissible for sanction, since as per the administrative instructions for recovery of interest on net cash tax liability issued by Central Board of Indirect Taxes and Customs vide F. No. CBEC- 20/01/08/2019-GST dated: 18.09.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following proviso shall be substituted and shall be deemed to have been substituted with effect from the 1st day of July, 2017, namely:- "Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of Section 39, except where such return is furnished after commencement of any proceedings under Section 73 or Section 74 in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger. ". I find that the provisions for levy of interest under Section 50(1) of the CGST Act 2017 have been amended retrospectively w.e.f. 01.07.2017 under clause 112 of the Finance Act, 2021 (13 of 2021). And said amended provisions to Section 50 (1) of the CGST Act, 2017 have been notified to come into force from 01.06.2021 vide Notification No.16/2021-Central Tax dated 01.06.2021. It shall be deemed to have been substituted with effect from the 1st day of July, 2017. 11. In view of the stated provisions, the appellant was required to pay interest on tax liability paid through Electronic Cash Ledger. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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