IGST Refund Claim May Be Made Before Expiry Of 2 Years From Date Of Export Of Goods: Madras High Court

The Madras High Court has held that an IGST refund claim may be made before the expiry of two years from the relevant date. The relevant date is required to be computed from the date of export of the goods concerned by any mode.

The bench of Justice Senthilkumar Ramamoorthy has observed that since the refund claim pertains to exports made between July 2017 and November 2017 and the refund application was filed on January 9, 2019, it is clear that the refund application was made within two years from the relevant date.

The petitioner or assessee stated that it is an exporter of processed tea. It is a registered person under applicable GST laws and has availed of ITC in respect of the procurement of tea from the local market. As per Section 16(3) of the Integrated Goods and Services Tax Act, 2017 (IGST Act), the petitioner has two options while undertaking exports. The first option is to export goods without payment of IGST against a letter of undertaking and thereafter claim a refund. The second option is to pay IGST and thereafter claim a refund of such IGST. After resorting to the first option, the petitioner claimed a refund of ITC in respect of the period running from July 2017 to November 2017.

While claiming a refund, the petitioner did not calculate the refund entitlement with reference to the total ITC availed of in the tax period but on the basis of the ITC attributable to the exports made in the month.

According to the petitioner, it resulted in the petitioner claiming a lower refund than that to which the petitioner is entitled as per law. While claiming a refund in the month of June 2018, the petitioner also claimed the additional refund to which the petitioner asserts entitlement for the period of July 2017 to November 2017 and for the month of May 2018. While the claim pertaining to the month of June 2018 was accepted, claims pertaining to May 2018 and July 2017 to November 2017 were rejected. When the matter was brought to an appeal, the appellate authority affirmed the order of the assessing officer.

The petitioner contended that Section 54 of the Central Goods and Services Tax Act, 2017 provides for a two-year period within which a refund claim may be made. The two-year period is required to be computed from the relevant date. As per the explanation set out in Section 54, the relevant date is the date of export. Since the refund claim was made by the petitioner within two years from the date of the relevant export, the refund claim is within the period prescribed by the statute.

The department has contended that the refund claim of the petitioner pertains to June 2018. Therefore, the claim was duly considered and accepted as of June 2018 and rejected with regard to earlier periods. A refund claim should be made in the manner prescribed, and the petitioner cannot be permitted to make claims pertaining to more than one financial year. Without prejudice, the entitlement of the petitioner to a refund cannot be assessed in these proceedings since such assessment turns on questions of fact.

The court held that the refund claim is within the time limit specified by statute for which the petitioner is entitled to a refund.

Counsel For Petitioner: G.Natarajan

Counsel For Respondent: R.Rajendran Raghavan

Case Title: M/s.Tulip Nilgiris Exports Pvt. Ltd. Versus Additional Commissioner of Central Taxes and Central Excise (Appeals)

Citation: 2024 LiveLaw (Mad) 42

Case No.: Writ Petition No.9063 of 2021

Click Here To Read The Order