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TMI Blog2024 (1) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... ND SERVICE TAX GUWAHATI, THE JOINT COMMISSIONER (APPEALS) CGST CENTRAL EXCISE AND CUSTOMS GUWAHATI, THE ASSISTANT COMMISSIONER CGST AND CENTRAL EXCISE DIVISION II [ 2021 (9) TMI 472 - GAUHATI HIGH COURT] , M/S. SHIVACO ASSOCIATES ANR. VERSUS JOINT COMMISSIONER OF STATE TAX, DIRECTORATE OF COMMERCIAL TAXES ORS. [ 2022 (4) TMI 118 - CALCUTTA HIGH COURT] , BAKER HUGHES ASIA PACIFIC LIMITED VERSUS UNION OF INDIA, THE STATE OF RAJASTHAN, THE DEPUTY COMMISSIONER, STATE TAX, CIRCLE BARMER, RAJASTHAN, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS [ 2022 (7) TMI 73 - RAJASTHAN HIGH COURT] and INDIAN OIL CORPORATION LIMITED VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX ORS. [ 2023 (12) TMI 361 - DELHI HIGH COURT] have held that the condition laid down in clause 3.2 of the Circular, which denies refund of credit accumulated to a dealer as a result of higher tax on inputs than the output supplies, when the input and output supplies are one and the same, would have to be ignored. Considering the ratio laid down in the aforesaid four judgments by the four High Courts, the present writ petitions are allowed and the petitioner is held to be entitled for refund of the credit accumu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived by the petitioner from various refineries, the petitioner is required to pay GST @ 18%. However, after bottling, when the LPG is supplied in cylinders to domestic and commercial customers, GST at the rate of 5% and 18%, respectively, on the value of the cylinder is charged. Thus, there is difference of input tax being higher than the tax on output in respect of the domestic supplies effected by the petitioner, after bottling the LPG in cylinders. 5. The petitioner moved applications under Section 54 of the CGST Act for refund of the accumulated ITC in respect of the LPG supplies to domestic customers after bottling in cylinders. However, the said applications/claims of the petitioner were rejected on the basis of Circular No. 135/05/2020-GST dated 31.3.2020. 6. Learned counsel for the petitioner submits that the aforesaid Circular, which negates the claim for refund of accumulated ITC under Section 54(3)(ii) of the CGST Act on the ground that though the tax on the outgoing supplies is less than the tax on the input supplies, both the input and output supplies are one and the same, has come up for consideration before different High Courts, including the High Courts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. (4) The application shall be accompanied by (a) such documentary evidence as may be prescribed to establish that a refund is due to the applicant; and (b) such documentary or other evidence (including the documents referred to in section 33) as the applicant may furnish to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such tax and interest had not been passed on to any other person: Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be necessary for the applicant to furnish any documentary and other evidences but he may file a declaration, based on the documentary or other evidences available with him, certifying that the incidence of such tax and interest had not been passed on to any other person. (5) If, on receipt of any such application, the proper officer is satisfied that the whole or part of the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with the provisions of sub-section (8). (10) Where any refund is due under subsection (3) to a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which has not been stayed by any Court, Tribunal or Appellate Authority by the specified date, the proper officer may (a) withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be; (b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law. Explanation . For the purposes of this subsection, the expression specified date shall mean the last date for filing an appeal under this Act. (11) Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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; (d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any Court, the date of communication of such judgment, decree, order or direction; (e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises; (f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof; (g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST dated 15.03.2018. The said circular was rescinded being subsumed in the Master Circular on Refunds No. 125/44/2019-GST dated 18.11.2019 and the said restriction on the clubbing of tax periods across financial years for claiming refund thus has been continued vide Paragraph 8 of the Circular No. 125/44/2019- GST dated 18.11.2019, which is reproduced as under: 8. The applicant, at his option, may file a refund claim for a tax period or by clubbing successive tax periods. The period for which refund claim has been filed, however, cannot spread across different financial years. Registered persons having aggregate turnover of up to Rs. 1.5 crore in the preceding financial year or the current financial year opting to file FORM GSTR-1 on quarterly basis, can only apply for refund on a quarterly basis or clubbing successive quarters as aforesaid. However, refund claims under categories listed at (a), (c) and (e) in para 3 above must be filed by the applicant chronologically. This means that an applicant, after submitting a refund application under any of these categories for a certain period, shall not be subsequently allowed to file a refund claim under the same category f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant trading in goods has purchased, say goods X attracting 18% GST. However, subsequently, the rate of GST on X has been reduced to, say 12%. It is being claimed that accumulation of ITC in such a case is also covered as accumulation on account of inverted duty structure and such applicants have sought refund of accumulated ITC under clause (ii) of subsection (3) of section 54 of the CGST Act. 3.2 It may be noted that refund of accumulated ITC in terms clause (ii) of subsection (3) of section 54 of the CGST Act is available where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies. It is noteworthy that, the input and output being the same in such cases, though attracting different tax rates at different points in time, do not get covered under the provisions of clause (ii) of sub-section (3) of section 54 of the CGST Act. It is hereby clarified that refund of accumulated ITC under clause (ii) of sub-section (3) of section 54 of the CGST Act would not be applicable in cases where the input and the output supplies are the same. 4. Change in manner of refund of tax paid on supplies other than zero ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.3.2 Further, vide the same notification, sub-rule (1A) has also been inserted in rule 92 of the CGST Rules, 2017. The same is reproduced hereunder: (1A) Where, upon examination of the application of refund of any amount paid as tax other than the refund of tax paid on zero-rated supplies or deemed export, the proper officer is satisfied that a refund under sub-section (5) of section 54 of the Act is due and payable to the applicant, he shall make an order in FORM RFD-06 sanctioning the amount of refund to be paid, in cash, proportionate to the amount debited in cash against the total amount paid for discharging tax liability for the relevant period, mentioning therein the amount adjusted against any outstanding demand under the Act or under any existing law and the balance amount refundable and for the remaining amount which has been debited from the electronic credit ledger for making payment of such tax, the proper officer shall issue FORM GST PMT-03 re-crediting the said amount as Input Tax Credit in electronic credit ledger. 4.4 The combined effect the abovementioned changes is that any such refund of tax paid on supplies other than zero rated supplies wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2 The issue has been examined and considering that such a distinction is important in view of the provisions relating to refund where refund of credit on Capital goods and/or services is not permissible in certain cases, it has been decided to amend the said statement. Accordingly, Annexure-B of the circular No. 125/44/2019-GST, dated 18.11.2019 stands modified to that extent. 6.3 A suitably modified statement format is attached for applicants to upload the details of invoices reflecting in their FORM GSTR-2A. The applicant is, in addition to details already prescribed, now required to mention HSN/SAC code which is mentioned on the inward invoices. In cases where supplier is not mandated to mention HSN/SAC code on invoice, the applicant need not mention HSN/SAC code in respect of such an inward supply. 7. It is requested that suitable trade notices may be issued to publicize the contents of this circular. 8. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow. (Yogendra Garg) Principal Commissioner 10. In almost similar facts and circumstances of these cases, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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