Simplified GST Series/ Section 55-58/CGST ACT 2017– Article analyses Section 55- GST Refund in certain cases, Section 56- Interest on delayed GST Refunds, Section 57-Consumer Welfare Fund and  Section 58- Utilization of the Fund of CGST ACT 2017.

Section 55- Refund in certain cases-

The Government may, on the recommendation of the Council, by notification, specify any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries and any other person or class of persons as may be specified in this behalf, who shall, subject to such conditions and restrictions as may be prescribed, be entitled to claim a refund of taxes paid on the notified supplies of goods or services or both received by them. 

Analysis- This section deals with refund of taxes paid on notified supplies of goods or services or both received by certain specified agencies notified by the Government on the recommendation of the Council.

  • The Government is vested with powers to notify certain agencies on the recommendation of the Council, to be entitled to claim refund.
  • The agencies that can be notified are –

A. any specialized agency of the United Nations Organization

B. any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947,

C. Consulate or Embassy of foreign countries

D. any other person or class of persons as may be specified

  • The agencies mentioned above would be entitled to claim a refund of taxes paid on the notified supplies of goods or services or both received by them. The refund claim is subject to such conditions and restrictions as may be prescribed
  • Procedure for refund of tax– The FORM GSTR-11 along with FORM GST RFD-10 has to be filed separately for each of those quarters for which refund claim is being filed.
  • All the entities claiming refund shall submit the duly filled in print out of FORM RFD-10 to the jurisdictional Central Tax Commissionerate. All refund claims shall be processed and sanctioned by respective Central Tax offices. In order to facilitate processing of refund claims of UIN entities, a nodal officer has been designated in each State. Application for refund claim may be submitted before the designated Central Tax nodal officers in the State in which the UIN has been obtained.

Section 56- Interest on delayed Refunds-

If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under sub-section (1) of that section, interest at such rate not exceeding six per cent as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of an application under the said sub-section till the date of refund of such tax. 

Provided that where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent. as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund.

Analysis-This section provides for payment of interest on delayed refunds beyond the period of sixty days from the date of receipt of application to avoid delays in sanction or grant of refund. 

  • The section provides that interest is payable if –

_ Tax paid becomes refundable under section 54(5) to the applicant; and

_ It is not refunded within 60 days from the date of receipt of application for refund of tax under Section 54(1)

  • Interest is liable to be paid from the due date for payment of refund till the date of sanction or grant of refund.
  • The Government has specified 6% as the rate of interest vide Notification No.13 /2017 – Central Tax dated 28.06.2017
  • Explanation to section provides that in cases where the orders of Appellate Authority / Tribunal / Court sanctions refund in an appeal, against the order of refund sanctioning authority, the order of Appellate Authority / Tribunal / Court will be considered as orders passed by refund sanctioning authority.
  • In other words, by virtue of such order, the refund has become due and the interest will then be computed form the date of completion of 60 days from the date of original refund claim made. For all such claims the Government has specified 9% as the rate of interest vide Notification No.13 /2017 – Central Tax dated 28.06.2017. 

Section 57-Consumer Welfare Fund

The Government shall constitute a Fund, to be called the Consumer Welfare Fund and there shall be credited to the Fund, —

(a) The amount referred to in sub-section (5) of section 54;

(b) any income from investment of the amount credited to the Fund; and

(c) such other monies received by it, in such manner as may be prescribed. 

Analysis- The applicant is unable to prove that the incidence was not actually passed onto any other person then the refund amount is credited to the Consumer Welfare Fund.

√ The following amounts will be credited to the Fund, in such manner as may be prescribed, –

  • All amounts of duty/central tax/ integrated tax /Union territory tax/cess
  • Income from investment along with other monies specified in section 12C (2) of the Central Excise Act, 1944.

√  However, in case of integrated tax and compensation cess as determined under Section 54(5), an amount equal to fifty percent of such sum shall be deposited in the fund. In case of any amount that has been credited to the fund that is now ordered or directed to be to be paid to a claimant by the proper officer, appellate authority or court, then, the same shall be paid from the fund.

Section 58- Utilization of the Fund –

(1) All sums credited to the Fund shall be utilised by the Government for the welfare of the consumers in such manner as may be prescribed.

(2) The Government or the authority specified by it shall maintain proper and separate account and other relevant records in relation to the Fund and prepare an annual statement of accounts in such form as may be prescribed in consultation with the Comptroller and Auditor-General of India.

Analysis-

♦ It should be ensured that the monies credited to the fund shall be utilized to provide assistance to protect the welfare of consumers as per the rules made by the Government.

♦  The Government shall maintain proper and separate records in relation to the Fund in consultation with the Comptroller and Auditor-General of India. 

Any Queries/doubts related to above article mailed at mamta0581@gmail.com.

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