GSTAT Upholds GST Refund Despite Delayed Credit Notes for Earlier Period:

M/s Rajshahi Banijya Private Limited was engaged in the supply of tea falling under HSN 0902, attracting GST at 5%. The company regularly exported goods without payment of tax and claimed a refund of accumulated ITC under Section 54(3)(i) of the CGST Act, 2017.

For the period April 2021 to June 2021, the taxpayer filed a refund application of Rs 2,79,084. The Assistant Commissioner of CGST and Central Excise, Siliguri Division, examined the claim and sanctioned the entire refund through Form GST RFD-06 dated 17/11/2021.

However, the Revenue, after reviewing the refund sanction order, considered it erroneous and directed the filing of an appeal under Section 107(3) of the CGST Act. The First Appellate Authority rejected the Revenue's appeal and upheld the refund sanctioned to the taxpayer. The GSTAT examined the GSTR-1 statements, voucher register and Chartered Accountant's certificate submitted by the taxpayer. It found that the credit notes of Rs 12,04,575 comprised two categories like, credit notes relating to invoices issued during April 2021 to June 2021 and credit notes relating to invoices pertaining to FY 2019-20, although these were issued in June 2021.

The Tribunal observed that the credit notes amounting to Rs 11,03,065 were supported by the relevant records and were correctly considered for reducing the adjusted total turnover. It noted that where goods are returned or supplies are deficient, credit notes are issued under Section 34(1) of the CGST Act, and the corresponding taxable turnover must be adjusted for refund calculation under Rule 89(4) of the CGST Rules.

However, regarding the remaining credit notes of Rs 1,01,510, the Tribunal found that they related to invoices raised during FY 2019-20 but were issued only in June 2021. Referring to Section 34(2) of the CGST Act, the Tribunal observed that, for the relevant period, credit notes relating to FY 2019-20 were required to be declared within the prescribed time limit, i.e., by 30 September 2020. Since these credit notes were issued in June 2021, they were beyond the permissible statutory period. Accordingly, the Tribunal held that credit notes amounting to Rs 1,01,510 could not be excluded from the adjusted total turnover.

Therefore, the taxpayer remained eligible for the entire refund already sanctioned.