Madras HC: Claim of GST Refund Must Submitted within 2 Years from the Date of Export

The Madras High Court has ruled that a claim for an Integrated Goods and Services Tax (IGST) refund must be submitted within two years from the relevant date, computed from the export date of the goods through any mode.

Justice Senthilkumar Ramamoorthy’s bench noted that the refund claim in question pertains to exports conducted between July 2017 and November 2017. The refund application, filed on January 9, 2019, falls within the stipulated two-year timeframe from the relevant date.

The petitioner, an entity engaged in exporting processed tea and registered under applicable GST laws, had availed of the Input Tax Credit (ITC) for procuring tea from the local market. According to Section 16(3) of the IGST Act, the petitioner, opting for the option to export goods without paying IGST against a letter of undertaking, claimed a refund for the ITC covering the period from July 2017 to November 2017.

During the refund claim process, the petitioner calculated the entitlement not based on the total ITC availed in the tax period but by considering the ITC attributable solely to the exports made in each respective month.

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The petitioner argued that this approach resulted in a lower refund claim than the entitled amount according to the law. While seeking a refund in June 2018, the petitioner also included additional claims for entitlement from July 2017 to November 2017 and for May 2018. Although the June 2018 claim was approved, the claims for May 2018 and July 2017 to November 2017 were rejected. The appellate authority, upon appeal, upheld the assessing officer’s decision.

The petitioner asserted that Section 54 of the CGST Act, 2017 specifies a two-year window for filing a refund claim, with the relevant date being the date of export as explained in the section. Since the petitioner filed the refund claim within two years from the relevant export date, it falls within the statutory timeframe.

Contrarily, the department argued that the petitioner’s refund claim pertained specifically to June 2018, and it was duly processed accordingly. Claims for preceding periods were rejected as the petitioner is not allowed to combine claims spanning multiple financial years. Additionally, the assessment of the petitioner’s refund entitlement cannot be determined in these proceedings due to factual considerations.

The court ruled that the GST refund claim is within the time limit mentioned by statute for which the applicant is qualified for a refund.