Delayed GST Refund attracts Interest: Gujarat HC issues notice to Centre, CBIC and GSTN

By Abhishek Chopra (CA, LLB) Goods and Services Tax Featured , Judiciary , Trending October 17, 2018 3 comments

TaxGuru Citation: 2018 taxguru.in 1894
Case Name: M/s. Saraf Natural Stone Vs Union Of India (Gujarat High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Gujarat High Court

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M/s. Saraf Natural Stone Vs Union Of India (Gujarat High Court)

While admitting a petition seeking interest / compensation for delay in both provisional as well as final refund of GST beyond stipulated period, the Gujarat High Court has issued notices to Centre, CBIC and GSTN.

The petitioner M/s Saraf Natural Stone has filed the writ petition before the Gujarat High Court asking for directions against the government to grant them not only interest @ 6% statutorily payable to them on delayed GST refund beyond 60 days from the date of application, but also interest in the nature of compensation for delay in provisional refund of 90% of the amount beyond seven days from the date of acknowledgment of application even though statute does not provide for the same.

Serial number 4A of Table 4 of FORM GSTR-4 not needed to be filled

Further, they submitted that that provisions of CGST Act, 2017 and Rules relating to refunds applies, mutatis mutandis, in relation to integrated tax as they apply in relation to central tax.

Counsel for the Petitioners Mr. Vinay Shraff, Mr. Vishal J Dave , Mr. Prateek Gattani and Mr. Nipun Singhvi submitted before the Court that the, that such inaction, leading to inordinate delay in granting of refund, is arbitrary and unreasonable and therefore is violative of Article 14 of the Constitution of India. It severely impacted working capital of the petitioner and therefore substantially diminished its ability to continue business which is a serious affront to its right to carry on its trade or business guaranteed under Article 19(1)(g) of the Constitution. It has also caused the deprivation of the petitioner’s enjoyment of the property and therefore, this is positively violative of the provision of Article 300A of the Constitution of India.

The next date of the matter is 23.11.2018

CA Abhishek Chopra, GST Consultant opined that “The claim made by petitioner is mandatorily payable to them by the department suo-motu and admission of writ for payment of the same is good news for exporters as they have been getting delayed refund which blocks their working capital cycle. The increased cost of capital has posed serious threats to their ability to do business.”

Read Final Judgment – Department to pay Interest on delay in Grant of IGST refund to Exporters @9% p.a