GST Update

 Desk of CA. Praveen Sharma – 838 Series (CAPS ) 

Andhra Pradesh High Court in the case of Nspira Management Services Private Limited

 Since both writ petitions involved similar questions, the Court delivered a common judgment.

 The petitioner, a GST-registered company engaged in educational consultancy and hostel accommodation services, had taken residential dwellings on rent and paid GST to landlords.

 Although renting of residential dwellings is exempt under Entry 12 of Notification No. 12/2017-CT (Rate), the petitioner paid GST and later sought refunds of ?11.49 crore for July 2017–January 2020 and February 2020–June 2022.

 The refund claims were rejected via deficiency memos citing time-bar under Section 54 of the CGST Act, as they were filed beyond the two-year period.

 The petitioner argued that rejection through deficiency memos was invalid, and that refund claims must be adjudicated through due process under Rule 92(3) involving RFD-08, RFD-09, and RFD-06.

 The department relied on Circular No. 125/44/2019-GST, stating that once a deficiency memo is issued, the application cannot proceed, and the filing deadline expired on 19 January 2024.

 The Court, referring to the Gujarat High Court judgment in Comsol Energy Pvt. Ltd., held that where tax is collected without authority of law, the limitation in Section 54 does not apply, and Section 17 of the Limitation Act prevails.

 The deficiency memos were quashed, and the authorities were directed to process the refund applications on merits, disregarding the limitation issue, and issue appropriate orders within four weeks.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS