Can I get an extension in time to claim GST refund due to COVID-19?

Due to the COVID-19 relief measures notified, a few of our readers asked us whether the GST department is entertaining the refund applications beyond the deadlines given under the law. Regarding that, below are some of the queries addressed.

1. Can the application be filed to claim GST refund where the time limit expires between 20th March 2020 and 30th June 2020? Many refund applications where the time limit of two years expired in April 2020 and May 2020 are being rejected.

The CBIC has issued two CGST notifications. These are notification numbers 35/2020 dated 3rd April 2020 and 55/2020 dated 27th June 2020. 

The notification number 35/2020 states that where any compliance must be completed, or action must be taken under the GST law within a particular timeline, it can get extended up to 30th June 2020. But such timelines or the deadlines must fall between 20th March 2020 and 29th June 2020. There are some exceptions listed out such as Sections 10(3), 25, 27, 31, 37, 47, 50, 69, 90, 122, 129 and more of the CGST Act, presented in detail in our published article on the exceptions where GST relief does not get extended. 

The notification number 55/2020 provided a further extension to the above relief. The period of relief earlier until 29th June 2020 has been extended until 30th August 2020. Accordingly, the last date to finish any pending compliance due from 20th March 2020 to 30th August 2020 is 31st August 2020.

From the above notification, it is evident that the application for claiming GST refund can be filed on or before 31st August 2020 where the due date is expiring between 20th March 2020 and 30th August 2020. It is because this action is within the scope of the notification without exception.

In support of the above interpretation, there is also a CGST circular issued by the CBIC. It is CGST circular 137/07/2020-GST dated 13th April 2020. On referring to the serial number 6 of the circular, the same question has been answered in affirmative. 

Hence, the application cannot be rejected merely on the ground that it has been filed beyond two years from the relevant date if it has been submitted within the extended deadline, as explained above.

Also Read: 41st GST Council Meet: 2 Options Offered to Meet the Compensation Cess Shortfall

2. I need a clarification regarding the submission of the GST refund application, which pertains to the period between January 2018 to March 2018, i.e. Q4 of 2017-18. What is the due date to apply for a refund application for Q4 2017-18?

The due date for claiming refund of GST has been laid down under Section 54 of the CGST Act. The subsection (1) states that the taxpayer who wants to claim the refund of tax and interest, if any, paid under certain types of transactions, elaborated in the further subsections, must submit an application within two years from the relevant date. 

The relevant date can vary with every transaction, not known in this case. It will be the date of reporting the deemed export in GSTR-3B, and the date of dispatch in post or departure of the ship or aircraft or vehicle passing the frontier for export of goods with tax payment. 

Whereas, the relevant date in case of export of services with payment of tax can be either invoice date or payment receipt date, depending upon the time of supply. Further, the relevant date in case of a refund of unutilised input tax credit due to export without payment of tax or inverted structure shall be the end of that financial year. In other cases, it is the date of payment or adjustment of tax.

In this case, the relevant date falls in the Q4 of 2017-18, i.e. January 2018 to March 2018). Hence, two years from the applicable date happens to fall between January 2020 to March 2020.  

CGST notifications- 35/2020 and 55/2020, providing an extension to comply or complete actions, will apply partially in this case. January 2020 to March 2020 will be split into two parts as follows 1st January 2020 to 19th March 2020 and 20th March 2020 to 31st March 2020.

The ultimate deadlines after considering the above notifications will be as follows:

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in