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In the recent GST council meet held at Chandigarh, it was proposed to provide the benefit of excluding time limit from 1st March 2020 to 28th February 2022 for filing refund applications under Section 54 and 55 of CGST Act as well as for issuance of demand/order for erroneous refund. More specifically, the GST Council recommended as follows:

Time period from 01.03.2020 to 28.02.2022 to be excluded from calculation of the limitation period for filing refund claim by an applicant under section 54 and 55 of CGST Act, as well as for issuance of demand/ order (by proper officer) in respect of erroneous refunds under section 73 of CGST Act. Further, limitation under section 73 for FY 2017-18 for issuance of order in respect of other demands linked with due date of annual return, to be extended till 30th September 2023”

Consequently, the amendments were brought vide Notification No. 13/2022-Central Tax dated 5th July, 2022 with retrospective effect from 1st March, 2020.

The following amendments were notified:

  • Extension of time limit specified under Section 73 (10) for  issuance  of  order  under  Section  73 (9) for  recovery  of  tax  not  paid  or  short  paid  or  of  input  tax  credit wrongly availed or utilized, in respect of a  tax period for FY 2017-18, up to the 30th September, 2023

Comments: In light of the difficulty faced by the department during COVID-19, also a conscious decision was taken not to conduct audit, scrutiny of returns and issues notices during implementation of GST. Hence, the above amendment was made to extend the due date till 30th September 2023 otherwise it was till February 2023.

  • To exclude the period from 1st March 2020 to the 28th February 2022 for computation of period of limitation under Section 73(10) for issuance of order under Section 73(9) for recovery of erroneous refund.

Comments: As per Section 73(10), recovery notices for erroneous refund shall be issued within 3 years from date of erroneous refund. By virtue of this amendment, the department can exclude the time from 1st of March 2020 to 28th February, 2022 for issuing recovery notices for obtaining erroneous refunds.

Example: An entity received an erroneous refund of Rs. 20 Lakhs on 31st January 2018. Originally, the time limit available with the Department to issue notice for recovery is 3 years from 31st January 2018, i.e., 31st January 2021. However, vide the amendment, since period from 1st March 2020 to 28th February 2022 is excluded, the new time limit for issuing recover notice would be 1st March 2023 (i.e., 2 years are covered till 28th February 2020 and remaining 1 year to be counted from 1st March 2022)

  • To exclude the period from 1st March 2020 to 28th February, 2022 for computation of period of limitation for filing refund application under Section 54 or Section 55.

Example: A Ltd exported services in January 2019 for which payment in CFE was received on 28th February 2019. Originally as per Section 54, time limit to file refund application would be 28th February 2021 (2 years from date of receipt of payment in CFE).  However, vide this amendment since period from 1st March 2020 to 28th February 2022 is excluded, the new time limit for applying for refund would be 1st March 2023 (i.e., 366 days covered till 29th February 2020 and remaining 1 year to be counted from 1st March 2022)

While revenue favoured by extending the limitations for issuing notices, the Government considered taxpayers difficulties especially difficulties faced in timely filing of the refund claims during the COVID period. This amendment also complying the Hon’ble Supreme Court`s Suo-moto order for extending the time for fling various applications under miscellaneous laws.


Extending the time for filing refund claims is welcome step by the Government and it was much needed for the trade and industry. However, practically, there could be many challenges especially since the portal needs updation to be in line with the notification. Also, the benefit of retrospective application of this relaxation may be availed by the taxpayers in case of any litigation.

Further, while the relaxation in filing refund applications was allowed, considering the interest of the Revenue, the Government also proposed to enhance the time limit for demands to be made under Section 73 and 74 of CGST Act. This move is due to the fact that initially, the Government decided against taking any enforcement actions in the initial stages of GST implementation.

Further, audit and scrutiny for FY 2017-18 were impeded due to various restrictions during COVID period. Hence, limitations for demand under the Act are linked to due date of Annual Returns, is also extended till 30th September 2023 by exercising power under section 168A of CGST Act.

To conclude, although it is very a beneficial amendment to the taxpayer by providing extended time limit for time barred refund claims, the interest of revenue is also equally protected by extending time limit for issuance of demand notices. Accordingly, the trade and industry is suggested to prepare their reconciliation aspects and ensure compliance aspects are adhered to.

– Adv. Venkatanarayana GM

– CA. Ramya C

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April 2024