Delhi High Court: No CA Certificate Required for Refund of Unutilized ITC

editor — Tue, 25 Jun 2024 12:07:52 +0000

Introduction

The Hon’ble Delhi High Court, in the case of M/s. Svera Agro Ltd. v. Commissioner of Central Tax [W.P. (C) No. 11926 of 2023 dated February 29, 2024], ruled that a Chartered Accountant (CA) certificate is not required to claim a refund of unutilized Input Tax Credit (ITC). This decision quashed the deficiency memo issued by the Revenue Department that demanded the CA certificate for the refund claim, emphasizing the proviso to Rule 89(2)(m) of the Central Goods and Services Tax Rules, 2017 (CGST Rules).

Facts of the Case

M/s. Svera Agro Ltd. (“the Petitioner”) applied for a refund of unutilized ITC. The Revenue Department rejected this application by issuing deficiency memos, which demanded the Petitioner furnish a certificate from a CA as per Rule 89(2)(m) of the CGST Rules. The Petitioner, aggrieved by this memo, filed a writ petition before the Hon’ble Delhi High Court.

Issue

The primary issue was whether a CA certificate is required to claim a refund of unutilized ITC under the provisions of the CGST Act and Rules.

Held

The Hon’ble Delhi High Court, in W.P. (C) No. 11926 of 2023, ruled in favor of the Petitioner. The Court observed the following:

Nature of Refund Claim: The Petitioner's refund claim pertained to unutilized ITC, which falls under Section 54(3) of the CGST Act.
Rule 89(2) Requirements: According to Rule 89(2) of the CGST Rules, documentary evidence is required to establish that a refund is due. Clause (l) of this rule stipulates that a CA certificate is needed if the refund amount exceeds Rs. 2 lakh.
Proviso to Rule 89(2)(m): However, the proviso to Rule 89(2)(m) explicitly states that a CA certificate is not required when an applicant seeks a refund of unutilized ITC.

Based on these observations, the Court held that the deficiency memos issued to the Petitioner, which demanded a CA certificate, were not sustainable and thus were set aside. This ruling affirmed that for refunds of unutilized ITC, the requirement to furnish a CA certificate is waived as per the applicable rules.

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Delhi High Court: No CA Certificate Required for Refund of Unutilized ITC

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