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Transitional Provisions Pertaining To Refund of Taxes / ITC under GST

A.      Refund of duty/tax paid under existing law, if goods are return within 6 months of GST Roll out [Sec. 142(1)]

(a)        The supplier of goods will be eligible for refund of duty/tax paid under the existing law (Central Excise or VAT etc.), if the duty/tax paid goods, which were cleared/sold under existing law (Central Excise/VAT etc.) and which is returned to any place of business of supplier:

i.          by the person other than the registered person;

ii.         within 6 months from the appointed day;

iii.        subject to condition that the goods are identifiable to the satisfaction of the proper officer.

(b)       However, the return of such goods by a registered person shall be treated as a supply and tax will be paid by the registered person returning such goods within 6 months of appointed day, in view of the provisions of CGST/IGST/ UTGST/SGST Acts as the case may be.

B.      Claim of refund of Credit, duty, tax, interest on or after appointed day, which pertains to the existing law [Sec. 142(3)]

(a)        Any claim of refund filed by any person either before the appointed day or even on or after the appointed day for:

i.          the refund of CENVAT/ VAT or any other Credit or

ii.         the duty/tax paid in the existing law or

iii.        the interest amount incurred on such duty or tax or credits etc.
shall be paid under the existing laws even after roll out of the GST and such claim shall be disposed of in accordance with the provisions of existing law only.

(b)       Further, the amount accrued to the taxpayer even against the refund of CENVAT/VAT or any other credit shall be paid in cash, despite having any provision contrary to this in the existing law, except the provision of section 1 1B(2) of the Central Excise Act, 1944, where it has been provided that the amount of refund would be sanctioned and credited to the Consumer Welfare Fund by the officers barring certain cases where burden of tax has not been passed to the buyer.

Therefore, the refunds of tax/duty/credit/interest etc. admissible to the taxpayer under existing Central or the States’ law, which are being subsumed under GST, shall be paid in cash only, despite having any provision of existing laws contrary to this, except the principle of Unjust Enrichment.

(c)        Further, where the claim of refund of CENVAT/VAT or any other Credit is rejected fully or partially, such amount of credit wifi be lapsed and the taxpayer will not be eligible to transfer such credit to the Electronic Ledger of Input Tax Credit under GST.

(d)       No refund of Credit under existing laws shall be entertained under this clause, if the balance of such credit has been carried forward to the ITC Electronic ledger by the registered person in view of the provisions of section 140 of CGST Act, which is applicable to IGST/UTGST Acts, 2017 and is also provisioned under SGST Acts too.

C.       The Claim of refund filed after appointed day for refund of duty or tax paid under existing law on export of goods or services before the appointed day [Sec. 142(4)]

(a)        The claim of refund of duty/tax/Credit etc. which is filed after the appointed day for:

i.          the duty /tax paid on the goods or services exported before the appointed day or

ii.         the credit of inputs or input services accrued on such export of goods / services, which were made before the appointed day, shall be dealt with in accordance of the provisions of existing law only.

(b)       However, the CENVAT/ VAT or any other credit which are rejected under the existing law after appointed day in view of the above provisions, shall be lapsed and will not be admissible for transfer to the Electronic ITC ledger in view of section 140 of CGST Act, 2017 which is applicable to the IGST/UTGST and SGST Acts mutatis mutandis.

(c)        If CENVAT/VAT or the other credit of duty/tax has already been carried forward by the registered person in his Electronic Credit Ledger of ITC in view of section 140 of CGST Act, refund of the same shall not be allowed.

D.      The refund of tax paid on advance received for provisioning of services, where services are not provided [Sec. 142(5)]

(a)        Where a Refund application is filed:

i.          after the appointed day

ii.         for refund of the advance paid under the existing law in respect of services, which are not provided due to any reason,

the same shall be disposed of in accordance with the provisions of Chapter V of the Finance Act, 1994 (Service Tax Act), and any amount eventually accruing to him shall be paid in cash, despite having any provision of law contrary to this, except the Principle of Unjust Enrichment as specified under sec. 11B(2) of Central Excise Act, 1944, which says that refund shall be sanction and credited to the Consumer Welfare Fund if burden of tax paid by the applicant has been passed on to the ultimate consumers.

E.       The proceedings relating to refund under existing law and payment of refund after appointed day [Sec. 142(6)]:

(a)        All the proceedings of appeal, review etc. relating to the claim for CENVAT/other Credits whether before, on or after appointed day under the existing law shall be disposed of in accordance with the provisions of existing law only. And the amount of credit found to be admissible to the claimant shall be refunded in cash, despite having any provision contrary to this provision in the existing law. However, principle of unjust enrichment as specified under sec. 1 1B(2) of Central Excise Act shall be applicable in this case too.

(b)       No refund will be admissible if the balance amount of Credit has been carried forward under CGST/IGST/SGST/UTGST Acts 2017 as the case may be, in the Electronic Credit Ledger of ITC.

F.       The proceedings of appeal, review or reference etc. related to output duty or tax liability initiated before, on or after the appointed day under the existing law [Sec. 142(7)]

(a)        Every proceeding of appeal, review or reference relating to any output liability of duty or tax initiated before, on or after the appointed day under existing law shall be disposed of in accordance with the provisions of the existing law itself.

(b)       If an amount of output liability found admissible to the claimant out of the proceeding of appeal, review or references, the same shall be refunded to him in cash, despite having any provision in the existing law contrary to this, except sec. 1 1B(2) as discussed above.

G.      The recovery of amount being recoverable due to assessment or adjudication proceedings instituted, under existing laws [Sec. 142(8)]

(a)        Where in pursuance of an assessment or Adjudication proceedings instituted before, on or after the appointed day under existing law, any amount of tax, interest, fine or penalty becomes refundable, the same shall be refunded to him in cash under the existing law, despite having any provision contrary to this, in the existing law, except the provision related to Unjust Enrichment as specified under sec. 11B(2) of Central Excise Act, 1944.

(b)       Further, if such refund claim is rejected under the existing law, the taxpayer shall not be entitled to carry forward such ITC to the Electronic Ledger of ITC under CGST/IGST/SGST/UTGST Acts, 2017.

H.      Refund of amount due to revision of the return furnished under existing law [Sec. 142(9)]

If any amount becomes refundable or amount of CENVAT/ VAT or other credit becomes admissible to the taxpayer due to:

  1.  the revision of the return

ii.         filed under the existing law on or after the appointed day,

the tax/duty amount or the Credits as mentioned above shall be refunded to the taxpayer in cash, under the existing law, despite having any provision contrary to this in the existing law, except the principle of unjust enrichment as specified under sec. 11B(2) of Central Excise Act, 1944.

 
Related Topics ....
Classification Of Refunds of Taxes / ITC under GST
Law And Processes For Different Types Of Refunds of Taxes / ITC under GST
Process Of Refund Application Filing of Taxes / ITC under GST
Documents Required For Filing Of Refunds of Taxes / ITC under GST
Transitional Provisions Pertaining To Refund of Taxes / ITC under GST
Verification Process of Refund of Taxes / ITC AT GST Common Portal
SANCTION OF REFUND of Taxes / ITC under GST
 
 
 
 
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