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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST Update No 180 on SC decision on rate of interest on delayed refunds

GST Update No 180 on SC decision on rate of interest on delayed refunds
GST law was incorporated with a motive of simplified and easy tax reform in the economy. It was expected that it will bring hassle free refund process. Even the Government has come out with a time frame to sanction the refund at the earliest for easy and efficient business operations. However, it seems that officers of GST department are reluctant as they adopt bureaucratic practice and red tape procedure to grant refunds to the taxpayers. Intentional and continuing delays are often a matter of discussion among the business community as they face liquidity issues. Moreover, the rate of interest in case of delay in payment of taxes by the assessee is 18% whereas the rate of interest for delay in sanction of refunds is 6%/9%. The issue regarding rate of interest to be granted for delayed sanction of refund claim has travelled down the line from Gujarat High Court to the Hon’ble Apex Court in the case of UNION OF INDIA V/S M/S WILLOWOOD CHEMICALS PVT. LTD [SPECIAL CIVIL APPLICATION NO. 2995-2996 OF 2022]. The decision imparted is the subject matter of discussion of our present update. The respondent contended that they are eligible for refund since as per section 16 of IGST Act, 2017, registered person making exports shall be eligible to claim refund of unutilised ITC or refund of IGST paid on exports. The respondent claimed that they shall be entitled to interest due to delay in receipt of compensation ranging between 94 to 290 days. Reliance was placed on the following decisions: • Modi Industries Ltd V/s Commissioner of Income Tax and Another • Godavari Sugar Mills Ltd • Sandvik Asia Ltd The Counsel of the petitioner opposed the same by placing reliance on the various following decisions • K.T. Plantation Pvt. Ltd. and Anr. V/s State of Karnataka • Sandvik Asia Ltd. V/s Commissioner of Income Tax-I Pune and others and Commissioner of Income Tax • Gujarat V/s Gujarat Fluoro Chemicals. It was argued that the directions of Hon’ble High Court of payment of 9% CA. PRADEEP JAIN ??www.capradeepjain.com??pradeep@capradeepjain.com??4 interest p.a. from date of filing of GSTR-3B is incorrect since as per Section 56 of CGST Act, 2017, the interest rate is 6% p.a. only. The Court held that the departmental officers are having no objection on eligibility of grant of refund of interest but disputes are related to rate of interest to be awarded in such a case i.e. 6% instead of 9% p.a. Provisions of Section 56 of CGST Act, 2017 were carefully examined wherein it is mentioned that interest on refund is to be awarded within a period of 60 days from date of receipt of application along with interest at 6% p.a. If in case, the amount to be refunded arises from any order which is not refunded within a period of 60 days, interest at the rate of 9% p.a. would be applicable as per proviso to Section 56 of CGST Act, 2017. The Court held that the “If the statue specifies interest, it shall be payable as per the terms of the provisions of the same. If the statue bars from payment of interest, in that case no interest shall be awarded. Where statue is silent and there is no bar on awarding interest, delay in paying compensation would require rewarding interest at reasonable rate on equitable grounds.” Quoting the decisions on which reliance is placed by the respondent, the court stated that interest awarded in excess of what is mentioned in statue was only for a period beyond 20 years wherein the matter was not covered in statue and therefore, decided by the Court. However, inordinate delay of 17 years in making refund was accepted at 9% p.a. in the case of Sandvik Asia Ltd since there was inordinate delay in granting refund. However, in the present case, it was held that High Court has erred in its approach as there is a delay is of just 94 to 290 days which is not inordinate delay and therefore, interest awarded in such a case shall be only 6% and not 9%. From the above decision, it is crystal the GST provisions as regards grant of interest are having biased approach as the genuine taxpayers have to pay interest at the rate of 18% p.a. on every error and on the contrary, the department just awards interest at the rate of 6% p.a. for delay in sanction of refunds. An earnest need is anticipated at the end of government to bring structural level changes coupled with sincere actions and put an end to imparity and inequality among the taxpayers by lowering down the interest rates payable by them for short payment of taxes or increase the rate CA. PRADEEP JAIN ??www.capradeepjain.com??pradeep@capradeepjain.com??5 of interest for delayed sanction of refund claims.
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