The Central Board of Indirect Taxes and Customs (CBIC) has rationalised GST refund provisions, including giving option to taxpayers to withdraw application. It has amended Goods and Services Tax (GST) rules and has excluded the time period from date of filing of refund application to date of issuance of deficiency memo by the officer from the overall time limit to file refund application.
Dhruva Advisors LLP Niraj Bagri said many GST refund applications were returned on the grounds of deficiency seeking the company to file a fresh application. The filing of a rectified refund application was treated as a new refund application. "In several instances, though the original refund application was filed within the time limit of 2 years, the department has been considering the date of rectified refund application as the relevant date resulting in rejections on the ground of breach of time limits.
"CBIC has put rest to this controversy, by amending the rule, and providing that the time period from the date of filing of original refund application till the time the deficiency letter is issued, will be excluded for determining the two-year period," Bagri said. Athena Law Associates Partner Pawan Arora said now refund application can be withdrawn at any time prior to issuance of provisional/ final refund order or refund payment/ withhold/ rejection order.
Also, the amendments in refund rules have resolved the biggest dispute regarding time limit of fresh filing of refund application after receipt of deficiency notice.
"Now, the time period up to date of communication of deficiency notice shall not be counted in the two years limitation for fresh refund application. In my view it should be given retrospective effect to dispose of the pending litigations on this issue before the courts," Arora added.
EY Tax Partner Abhishek Jain welcomed the amendments, saying they were awaited and advocated by the industry players for a long time.
AMRG & Associates Senior Partner Rajat Mohan said changes in the rules would help numerous taxpayers, including exporters. Current amendments to GST rules will also empower taxpayers to withdraw the GST refund application to correct any clerical mistakes that may have crept in.
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