Chandigarh Tribunal allows refund of unutilized cesses lying in account on 01 July 2017

The Appellant had initially availed credit of Education Cess and KKC into GST. Post the amendment to Section 140 of the CGST Act, whereby the term ‘CENVAT Credit’ had been contextualized with the term eligible duties, to disallow credit of cesses, the Appellant had duly reversed the credit of cesses so availed. Thereafter, the Appellant filed a refund claim of such cesses, being credit unutilized. The said refund claim came to be rejected by the Revenue on the ground of it being time barred as the GST came into effect on 01 July 2017.

Aggrieved, the Appellant preferred an Appeal before the Chandigarh CESTAT. The Tribunal observed that the amendment to Section 140 of the CGST Act came on 30 August 2018 i.e., after one year of the switching to the GST Regime which is applicable retrospectively. Accordingly, it was held that the Appellant could not have possibly have filed the refund claim within 1 year from 01 July 2017. Accordingly, it was held that the relevant date for the refund claim shall be 30 August 2018 and therefore, the refund application being filed in September 2018, is within the due date. In view of the above, the Chandigarh Tribunal set aside the refund rejection order and allowed the Appeal.

Authors’ Notes:

Basis the instant judgement of the Chandigarh Tribunal, the taxpayers who had filed refund claims for cesses within 1 year of amendment of Section 140 of the CGST Act, can now represent to the appropriate authorities to allow their refund claims. Similarly, taxpayers can also claim the refund of CVD/SAD, wherein such duties had become payable after 01 July 2017 and credit could not be availed.