Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
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.  

Comments

Print   |    |  Comment

GST Update No 270 on interest on refund allowed for amount deposited during investigation

GST Update No 270 on interest on refund allowed for amount deposited during investigation
The discussion as regards to payment of interest on refund granted during the course of investigation has laid its roots from the erstwhile GST regime. On several occasions the departmental officers visit the premises of the taxpayers, carry on investigations and compel the assessee to deposit the alleged amount demanded. Subsequently, in various cases, the consideration is refunded to the taxpayer because the order attains finality. However, the moot question which pre-occupied the minds of taxpayers is whether the interest shall also be paid along with the amount refunded and if yes, at what rate and for which time period. There had been catena of cases on the subject matter under consideration. On parallel lines, one case came in front of New Delhi CESTAT in the case of M/S BBM IMPEX PVT. LIMITED. The decision imparted in this case is subject matter of discussion of our present update. The appellant has imported certain goods wherein dispute arose as regards to the value of goods. The appellant deposited the differential amount for the purpose of provisional release of goods amounting to Rs. 13,50,000/-. Thereafter, show cause notice was issued as on 04.02.2016 and order in original was passed wherein the proposed duty was confirmed along with penalty and fine. The appeal was allowed and demand and penalty were set aside. Hence, refund claim of amount deposited was filed as on 20.07.2020 along with interest. The adjudicating authority rejected the refund claim. The matter was preferred further wherein it was imparted that the refund shall be granted along in accordance with provisions of Section 27A of Customs Act from the end of 3 months from date of application of refund. Thereafter, the appellant filed refund claim on 20.07.2020 claiming for the refund of the amount deposited of Rs. 13,50,000/- on 22.09.2015 along with appropriate interest. However, the adjudicating authority rejected the interest and granted refund only for the principal amount of Rs. 13,50,000/-. Thereafter, appellant preferred appeal before the Commissioner (Appeals), who was pleased to hold that the appellant is entitled to interest under section 27A of the Customs Act. It was further observed that as per Section 27A, interest is payable from the end of three months, from the date of application of refund and accordingly, allowed interest on refund for the period 12.01.2021 to 04.03.2021 only, on the amount of Rs.12,85,013/-, observing that in view of the appropriation in the order-in-original, the appellant is not entitled to interest on the amount adjusted towards fine. Being aggrieved, the appellant is before the Tribunal. The appellant submitted that the issue under consideration is not res integra and therefore interest is payable as per Section 129EE of the Customs Act. Therefore, the amount of pre-deposit should be refunded along with interest under Section 129EE of the Customs Act. Reliance in this regard was placed on recent decision in the case of Indo Rubber and Plastic Works wherein it was held that the deposit made during investigation becomes pre-deposit ifso facto and accordingly entitled to interest as per law from the date of deposit till the date of refund. Reference was also drawn to decision of Apex Court in the case of Reeba Textiles Ltd.- 2022 (Vol.3) TMI 693 and Sandvik Asia Ltd.- 2007 (8) STR 193 (SC). The Counsel of revenue placed reliance on decision of same Tribunal in the case of Jovex International wherein the case was travelled to Delhi High Court and stay has been granted for the order of the Tribunal. The Court after analysing the provisions and the precedent decisions held that the appellant is entitled to grant of interest as per Section 129EE of the Customs Act from the date of deposit till date of refund at the rate of 12%p.a. The decision was delivered in line with the decision of Apex Court in the case of Sandvik Asia Ltd. stated above. The above decision proved to be welcoming decision by the business community. Although the subject matter under discussion is well acknowledged in various Judicial Rulings and is settled in favour of the assessee,reference may be made to the decision given by the CESTAT in the case of Ghaziabad Ship Breakers Pvt. Ltd. V/s Commissioner of Customs and in the case of Marshall Foundry & Engg. (P) Ltd. V/s CGST. It is high time that these settled judgments should be recognised by the departmental officers so that unnecessary can be avoided.
Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com