HC: GST Refund Process Permitted Only After Documentary Evidence Verification

A division bench of the Jharkhand High Court, the GST refund claims are not permissible when they do not get backed by documentary evidence beneath the provisions of the Central Goods and Services Tax Act, 2017.

The petitioner, M/s CTC (India) Private Limited, 100 per cent export-oriented unit, exporting its products to the countries such as the USA, China, Germany, and others. The applicant has been furnished by the applicant towards the refund of the accumulated CGST, SGST, and IGST credit for the period of January 2018, a total being Rs.9,89,191.00/- in the prescribed Form-GST-RFD-01A along with supporting documents.

The council sees that the applicant during the furnishing of the GSTR-3B return of ITC for the month of January 2018; accidentally, skip citing the zero-rated supplies to the tune of Rs.3,79,82,605 with respect to the outward taxable supplies (zero rated) in the articulated return and mentions that to be “zero”. But, the told amount of zero-rated supplies has been accurately shown in the GSTR-1 return of outward supplies with respect to the export invoices. On the grounds of the specified error, the claim for the refund gets rejected via the department.

The applicant opposed the court that the order for cancelling the refund gets issued without acknowledging the comprehensive reply via the applicant and the council losses to consider the fact that the definition of the adjusted total revenue as mentioned under Rule 89 (4) of the Central Goods and Services Tax Rules, 2017 particularly does not include the exempted supplies and the applicants claim for refund comes beneath the exempted supplies under Section 2(47) of the Central Goods and Services Tax Act, 2017.

Justice Aparesh Kumar Singh and Justice Deepak Roshan found that the appellate authority issues a conclusion that the application for the refund of the unused input tax credit on the basis of the zero-rated supplies is obligated within the documentary evidence to confirm that a refund is originally due to the petitioner.

In any form of documents, the taxpayer does not provide any evidence even to the appellate authority, and as per the law only claiming any refund on the grounds of averments would not be enough until the said claim of any taxpayer is confirmed via documentary evidence.

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Confirming the order refusing the refund the court ruled that “From the appellate order it also transpires that the Appellate Authority has duly considered the circular No.37/11/2018-GST dated 15.3.2018 which is related to a refund claim on account of export of goods without payment of tax and held that the same is possible only on verification of invoices. At the cost of repetition, since the petitioner fails to substantiate their claim of refund by giving documentary evidence either before the assessment proceeding or before the appellate authority, his claim for refund has been rejected. Even before this Court, the petitioner failed to do so.”