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Entitlement to Interest Commences After Sixty Days from Refund Application Until Credited to Bank Account

editor — Sat, 06 Apr 2024 05:35:52 +0000

In a significant ruling by the Hon’ble Delhi High Court, Raghav Ventures vs. Commissioner of Delhi [W.P.(C) NO. 12209 OF 2023 dated March 01, 2024], the issue of entitlement to interest on delayed GST refunds was examined. The case sheds light on the statutory provisions and clarifications regarding the payment of interest under the Central Goods and Services Tax Act (“the CGST Act”).

Facts of the Case:

M/s Raghav Ventures ("the Petitioner") engaged in exporting mobile phones and accessories to M/s AZ Logistic, Dubai, UAE, thereby paying Integrated Goods and Services Tax ("IGST").
During the Impugned Period (December 2022, February 2023, March 2023, and May 2023), the Petitioner paid IGST totaling significant amounts i.e. Rs. 1,63,16,851/-, Rs. 50,46,889/-, Rs. 17,26,288/-, and Rs. 13,85,382/-, respectively.
The Petitioner filed refund applications for the IGST paid during the Impugned Periods in accordance with the prescribed procedure under the CGST rules.
Despite receiving acknowledgments for the refund applications, the refunds were not processed within the stipulated time frame.
The IGST refunds were eventually sanctioned and credited into the Petitioner's bank account but without any accompanying interest.
The Petitioner subsequently filed an application to the Revenue Department seeking interest on the delayed refunds.

Issue:

Whether the Petitioner is entitled to interest on the delayed refund of IGST as per statutory provisions?

Held:

The Hon’ble Delhi High Court, in the Writ Petition (C) NO. 12209 OF 2023, held the following:

Interest becomes payable under Section 56 of the CGST Act if the refund ordered under Section 54(5) is not processed within 60 days from the date of the refund application.
The payment of interest under Section 56 is a statutory provision and does not rely on any claim made by the assessee.
Circular No. 125/44/2019-GST dated November 18, 2019, clarifies that interest accrues from the date immediately after the expiry of sixty days from the date of the refund application until the amount is credited to the applicant's bank account.
Consequently, the Petitioner is entitled to statutory interest at the rate of 6% from the date following the expiry of sixty days from the date of the refund application until the refund is credited to the bank account.
The Court directed the Revenue Department to process the refund of interest and credit the same into the Petitioner's account within four weeks.

Assessment Order not sustainable when vague in nature

editor — Sat, 23 Mar 2024 05:37:30 +0000

In the legal case of Rainbow Stones (P.) Ltd. versus Assistant Commissioner (ST), as documented in Writ Petition No. 4510 of 2024 dated February 26, 2024, the Madras High Court responded by granting the writ petition. This decision was based on the assertion that the Assessment Order lacked clarity and proper justification.

Facts of the case:

Rainbow Stones (P.) Ltd. initiated a writ petition contesting an assessment order issued on December 31, 2023 (referred to as “the Impugned Order”), which centered around disparities between the Input Tax Credit (ITC) claimed in GSTR-3B and that reflected under GSTR-2A. The petitioner argued that the Impugned Order, issued by the Revenue Department (referred to as “the Respondent”), lacked specificity. The sole observation noted in the Impugned Order was the rejection of the petitioner’s response.

Held:

The Madras High Court, in Writ Petition No. 4510 of 2024, overturned the Impugned Order. The court held that the order lacked specificity, which was the basis for confirming the demand for tax, interest, and penalty. The High Court directed that the matter be reconsidered and a fresh order issued after affording the petitioner a reasonable opportunity to be heard.

Introduction to Revised GST Returns and Future Implementation

editor — Fri, 15 Mar 2024 09:23:17 +0000

A recent advancement in the taxation system promises to equip taxpayers with a valuable tool known as the ability to file revised Goods and Services Tax (GST) returns. This transformative change, set to take effect from 2025, aims to streamline the tax filing process and empower both entities and individuals. In this article, we will delve into how taxpayers could access the ability to file revised GST returns from 2025, along with a detailed understanding of revised GST returns.

Overview of Revised GST Returns

A revised GST return refers to a corrected or amended version of a previously filed Goods and Services Tax (GST) return. This process allows taxpayers to rectify errors, update details, or make necessary adjustments to the information submitted in the original return.

Common Scenarios Requiring Revised GST Returns

Tax Liability Adjustment: Changes in tax rates or taxable values may impact the overall tax liability, necessitating adjustments in revised GST returns.
Correction of Errors: In case of inaccuracies or mistakes in the original GST return, taxpayers can file a revised return to rectify these errors.
Alteration in Input Tax Credit (ITC): If eligible credits are identified after filing the original return, taxpayers can file a revised return to claim these credits.
Omission of Information: If certain transactions or details were omitted in the original return, taxpayers can include them in a revised return.
Reconciliation with Financial Statements: Entities may need to reconcile GST returns with financial statements, and if discrepancies are found, a revised return can align the GST reporting with accurate financial information.

Future Prospects of Revised GST Returns

The government’s proposal to introduce revised GST returns is expected to have a significant impact on taxpayers and reduce litigation related to GST matters. Under this proposal, taxpayers will have the opportunity to amend various aspects of their returns, including tax computation. Currently, there is no provision for filing revised returns under GST, except for minor changes in invoice information.

Implementation Timeline and Process

The Central Board of Indirect Taxes and Customs is actively working on this proposal, which will subsequently be reviewed by the law committee of the GST council. Initially, the proposal may be introduced for annual returns, with a potential expansion to quarterly returns. However, it is anticipated to take at least 8-9 months post-GST council approval for implementation, due to the need for substantial updates to the GST network.

Implementation Timeline and Process

The GST Network (GSTN) is preparing to transition to a new technology vendor by April 2025, as the existing contract with Infosys ends on September 30, 2024. The implementation of the revised GST returns is contingent upon successful execution of this transition.

Steps to File Revised GST Returns

Check Eligibility: Ensure eligibility criteria for filing revised GST returns.
Visit GST Portal: Log in to the GST Portal for GST-related tasks.
Choose Correct Form: Select the relevant form for filing revised GST returns.
Provide Original Return Information: Fill in the original GST return details.
Make Amendments: Update figures and provide explanations for amendments.
Submit Revised Return: Submit the revised GST return online.
Confirmation and Acknowledgment: Retain a copy of the acknowledgment for records.
Additional Tax Payment: Pay any additional tax liability, if applicable.
Check Status: Monitor the status of the filed revised GST return on the GST Portal.

Conclusion

In conclusion, the introduction of revised GST returns marks a significant step towards simplifying the tax filing process and ensuring compliance with evolving regulatory requirements. This proposed change will offer taxpayers greater flexibility and adaptability in meeting their tax obligations. By exploring the implications and procedures associated with revised GST returns, taxpayers can prepare for the forthcoming changes in the taxation landscape.

CA in Jaipur | CA. Yogesh Jangid |ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases |

Entitlement to Interest Commences After Sixty Days from Refund Application Until Credited to Bank Account

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Assessment Order not sustainable when vague in nature

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Introduction to Revised GST Returns and Future Implementation

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