ISSUE INVOLVED
Whether interest is payable by Department on delay in discharging GST refund under Budgetary Support Scheme? {Section 54 of the CGST Act, 2017}
HELD THAT
Interest is not payable for delay in disbursement of GST refund under Budgetary Support Scheme to units which were availing area-based exemption under Central Excise as provision for same was absent.
Case Reference : [2023] 151 taxmann.com 83 (Jammu & Kashmir and Ladakh)
Contributed By
Jyotsana Thareja
Technical Trainee – GST
jyotsanathareja@mehragoelco.com
CA Vaibhav Jain
Partner
vaibhavjain@mehragoelco.com
Facts of the Case:
Revenue :
The Revenue responded that the GST Department’s lack of adequate funds was the cause of the delay in granting the refund. Furthermore, the benefit envisioned by the scheme is not a right because it is a concession or incentive offered by the government for the benefit of eligible industries.
Petitioner :
The petitioner claimed interest in the delay in paying out GST refunds under the Budgetary Support Scheme to businesses eligible for the area-based Central Excise exemption.
Judgement:
Interest is not payable for delay in disbursement of GST refund under Budgetary Support Scheme to units which were availing area-based exemption under Central Excise as provision for same was absent.
Summary:
The petitioner, M/s Jindal Drugs Private Limited (Cocoa Division), was registered with the Central Excise Department and qualified for notifications of area-based exemptions. However, after the introduction of the GST, the petitioner enrolled for the GST Regime without these exemptions. To help qualified taxpayers, the government introduced the Budgetary Support Scheme. However, a refund was postponed owing to inadequate funds, and the petitioner sought interest on the late payment. The High Court ruled that the benefit under the plan could not be claimed as a matter of right since the funds were not suitable for paying claims and the money was not withheld arbitrarily or unlawfully. As a result, the petitioner lacks the eligibility to make an interest claim under Section 54 of the 2017 J&K GST Act and the CGST Act. The court examined the relevant provisions of the SEZ Act and the GGST Act and found that the Central Government had authorized the officers of the State GST authorities to conduct search, seizure, investigation, or inspection in SEZs through a notification. Therefore, the court concluded that the respondent authorities had the lawful authority to carry out the proceedings.
The court also noted that accepting the petitioners’ arguments would undermine the purpose of the IGST Act and create inconsistencies between the SEZ Act and the GST Act. Additionally, the Development Commissioner of the SEZ was duly informed before the search and seizure proceedings took place. As a result, the court rejected the petitioners’ claims as unworthy of acceptance.