As per the GST law, Refund Application for unutilized input credit can be filed within 2 years from the “Relevant date”. Relevant date depends upon the category of the refund filed. For instance, in case of refund claim under inverted duty structure, relevant date is at the end of any tax period where credit has been accumulated.
The Inverted Duty Structure means, where Inputs are taxed at higher rates than finished products.
Considering the COVID circumstances, CBIC had given various extensions from time to time to exclude certain period from the time of limitation to file for refund . However, vide its notification dated 05.07.2022 bearing no. 13/2022, CBIC has given a one-shot exclusion of time period from 01.03.2020 to 28.02.2022 from the time of limitation.
Still , there were certain cases where department rejected the refund claims citing them as “time-barred”.
However, in a similar recent case filed before Gujarat High Court, where refund claim application under Inverted Duty Structure made on 23.10.2020 for the period from 01.04.2018 to 31.08.2018 was rejected by the department earlier, the decision was made in the favor of the assessee by the honorable High Court citing the abovementioned notification.
Our Point of View :
In the light of difficulty faced by assesses and the department during COVID-19, a conscious decision was made by the government to extend the time period of limitations . It is a welcome step by the government and was much needed for the trade and industry.
Source: M/S CAPTAIN POLYPLAST LIMITED VERSUS UNION OF INDIA (R/SPECIAL CIVIL APPLICATION NO. 9560 OF 2022).
