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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
Sri Justice R Raghunandan Rao, Sri Justice Maheswara Rao Kuncheam, JJ
Priyanka Refineries Private Limited – Appellant
Versus
Deputy Commissioner St – Respondent
Order :
As all the four Writ Petitions relate to the same issues, they are being disposed of, by way of a common order.
2. The petitioners are engaged in the business of manufacturing, distributing and branding of edible oils and specialty fats in India. In the process of the manufacture of these products, the petitioners had sourced various raw materials on which GST had already been paid. It so transpired that the rate of GST payable on edible oils and specialty fats was lower than the rate of tax levied on the inputs or raw materials sourced by the petitioner.
3. Section 5 (3) of the CGST Act provides for a situation where the input tax credit available in the ledger of a registered person can be refunded, if the rate of tax on the final product is lower than the rate of tax payable on the inputs used for manufacture of such a final product. This system is popularly known as ‘inverted duty structure’.
4. The petitioners, on the ground that their products fall into the category of inverted duty structure, had filed applications for refund of the input tax credit, under Section 54 of the CGST Act, for the periods prior to 18.07.2022. These applications were rejected by the 1st respond
Input tax credits accrued before the effective date of a notification can be claimed despite subsequent restrictions, as clarified by the court.
The restrictions on refund of accumulated input tax credit under Notification No. 9/2022 apply prospectively only, allowing claims for periods prior to the notification while filed within the statuto....
Taxpayers are eligible for refunds of accumulated input tax credit even when input and output supplies are identical, as clarified through legislative amendments.
The main legal point established is that the statutory scheme of refund under Section 54(3) of the CGST Act, 2017 applies to cases of accumulation of unutilised input tax credit due to an inverted du....
The court affirmed that the right to claim Input Tax Credit refunds is unambiguous and cannot be restricted arbitrarily by circulars or notifications that infringe upon statutory rights.
The amendment to Rule 89(5) of the GST Rules is curative and clarificatory, applicable retrospectively to refund applications filed within two years under Section 54(1) of the GST Act.
The court ruled that the denial of a tax refund on grounds of limitation was wrong, emphasizing the principle of unjust enrichment, and clarified that the time limit of two years for refund applicati....
The filing of an application for refund in the prescribed form and manner stops the running of the limitation period, even if further documents or clarifications are sought by the proper officer.
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