Taxpayers encouraged to quote these references against delay in processing of refunds under GST

Over the past year, there has been an upscale in exports & the business entities are in active participation to boost the exports. The momentum of such entities is trickled by a delay in the refund under GST law. A specific reference is drawn towards the taxpayers under the state government ( TNGST) either not received their refund on time or it is paid after endless delay. Even automatic refunds under export of goods are withheld in few cases.

 

Refund from the goods or services exported act as a working capital for the businesses & it is the encouragement to provide to the global markets at competitive prices. Working capital is the backbone of the business & when the same is repressed for unknown factors the livelihood of the businessmen is affected which directly violates the right to life. The principle of zero rating is also defeated by loitering approval of refunds. The officer not acknowledging refund application on Form RFD 02 is evident that they sloth over the process. The taxpayer has every right to understand why the refund application is not acknowledged despite many legitimate attempts. The taxpayers shall initiate an inquiry under the Right to Information Act (RTI) to envisage the receipt of such refunds. 

This draws a veil over the process of refund where even after application of refund is initiated on the portal. The officer doesn’t acknowledge the application. Endlessly the taxpayers submit requisition letter to proceed on with the refund application. Silently sitting upon the applications  would be violative of Article 21 of the Constitution of India. The same is also violating Circular 125/44/2019 dated 18th November 2018 where “The application shall be deemed to have been filed under sub-rule (2) of rule 90 of the CGST Rules on the date of generation of the said ARN and the time limit of 15 days to issue an acknowledgement or a deficiency memo, as the case may be, shall be counted from the said date. This will obviate the need for an applicant to visit the jurisdictional tax office for the submission of the refund application and /or any of the supporting documents. Accordingly, the acknowledgement for the complete application (FORM GST RFD-02) or deficiency memo (FORM GST RFD-03), as the case may be, would be issued electronically by the jurisdictional tax officer based on the documents so received from the common portal”.

“It is clarified that either an acknowledgement or a deficiency memo should be issued within the aforesaid period of 15 days starting from the date of generation of ARN. Once an acknowledgement has been issued in relation to a refund application, no deficiency memo, on any grounds, may be subsequently issued for the said application”.

“Accordingly, all tax authorities are advised to issue the final sanction order in FORM GST RFD-06 and the payment order in FORM GST RFD-05 within 45 days of the date of generation of ARN, so that the disbursement is completed within 60 days”.

Taxpayers are encouraged to quote these references when you follow up next time on your pending application for refunds. 

- K N Akshaya MA LLB