2022 (1) TMI 743 - Commissioner - GST

Refund of excess payment of tax - export of goods on payment of IGST - zero-rated supplies or deemed export - Interpretation of Rule 86 of CGST Rules, 2017 read with Circular No. 135/05/2020, dated 31-3-2020 - whether the appeal has been filed within the prescribed time limit? - HELD THAT - In the instant case, the appeal in the prescribed Form GST APL-01 has been filed by the appellant on 23-11-2020 i.e. the delay of 26 days from the normal period of three months as per Section 107(1) of CGST Act, 2017. The reason for delay has been mentioned by the appellant in their appeal memo that the office of the authorized representative of the appellant was closed due to COVID-19 cases, hence the appeal could not be prepared in time - Delay up to 30 days is condonable, hence condonation of delay is requested. In view of the reason given by the appellant, the delay in filing the appeal as per provision of sub-section (4) of Section 107 of CGST Act, 2017 is condoned. Rejection of refund on the ground that the refund claim cannot be sanctioned in cash as per Rule 86 of CGST Rules, 2017 read with Circular No. 135/05/2020, dated 31-3-2020 - HELD THAT - The appellant has filed the refund application GST-RFD-01 with ARN No. AA0807200379253, dated 16-7-2020 for the disputed period January, 2020 on account of Excess Payment of Tax - amendment in Rule 86(4)(A) and sub-rule (1)(1A) of Rule 92 of the CGST Rules, 2017 has been made and same was made effective from 31-3-2020 whereas, the period of refund claim in the instant case is pertains to the period of January, 2020. Thus, the amended rule is not applicable in the instant case. Appeal dismissed.

Summary

Issues Involved:
1. Timeliness of the appeal filing.
2. Admissibility of the refund claim for IGST paid on export of goods.

Detailed Analysis:

1. Timeliness of the Appeal Filing:

The first issue addressed was whether the appeal was filed within the prescribed time limit. According to Section 107 of the CGST Act, 2017, an appeal must be filed within three months from the date of the decision or order being communicated. The appellant filed the appeal on 23-11-2020, which was a delay of 26 days beyond the standard three-month period. The appellant cited COVID-19 related disruptions and technical difficulties with the GST portal as reasons for the delay. Given that delays up to 30 days are condonable under Section 107(4) of the CGST Act, 2017, the delay was condoned, and the case proceeded on its merits.

2. Admissibility of the Refund Claim for IGST Paid on Export of Goods:

The appellant filed a refund application under Section 54 of the CGST Act, 2017 for IGST paid on the export of goods for January 2020. The adjudicating authority rejected the refund claim, stating it could not be sanctioned in cash according to Rule 86 of the CGST Rules, 2017 and Circular No. 135/05/2020. The appellant argued that the adjudicating authority misinterpreted Rule 86, which pertains to the Electronic Credit Ledger, and that Rule 92, which governs refund sanctions, should apply. They highlighted amendments made to Rule 92 via the CGST (Third Amendment) Rules, 2020, effective from 23-3-2020, which introduced sub-rule (1A) specifying the refund process.

The appellant stressed that under the amended Rule 92(1A), refunds for excess tax paid should be recredited to the Electronic Credit Ledger if the tax was originally paid by debiting this ledger. However, the adjudicating authority noted that these amendments were effective from 31-3-2020, while the refund period in question was January 2020. Consequently, the amendments could not be applied retrospectively.

The appellant's refund application was based on an incorrect entry in GSTR-3B for January 2020, which was later corrected in March 2020. Despite the appellant's arguments and reliance on the amended rules and Circular No. 135/05/2020, the adjudicating authority maintained that the refund/recredit could not be granted as the amendments were not applicable to the period in question.

Conclusion:

The appeal was rejected on the grounds that the amendments to Rule 86 and Rule 92 of the CGST Rules, 2017, which the appellant relied upon, were not applicable retrospectively to the period of January 2020. The adjudicating authority's interpretation that the refund claim could not be sanctioned in cash was upheld, and the appeal was disposed of accordingly.