By virtue of decision taken in 43rd GST Council Meeting, Notification No. 16/2021 – Central Tax dated 1st June, 2021 was issued under GST law to state that interest under Section 50 of the CGST Act, 2017 would be applicable only on net tax liability with retrospective effect from July 1, 2017. With this notification issued on June 1, 2021, no recovery of interest on gross tax liability shall be made for any tax period. Further, taxpayers who had already paid interest on the gross tax liability would also be entitled to get refund of the such interest paid since July 1, 2017. Refund under the GST law is governed by Section 54 of the CGST Act, 2017. It is worthwhile to note that section 54 of CGST Act, 2017 which deals with refund clearly states that refund shall be filed within 2 years from relevant date in Form GST RFD-01.
Section 54 – Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed.
For the purpose of relevant date, Explanation 2(h) to section 54 states that “in any other case, the date of payment of tax.” In the present scenarios, it gets important to place reliance in the case of Schlumberger Asia Services Ltd. v. Commissioner of CE & ST, Gurgaon-I  127 taxmann.com 509 (Chandigarh – CESTAT) dated 24-5-2021 wherein it was held that amendment to Section 140 came after one year of the switching to the GST Regime on 30-8-2018 which is applicable retrospectively. In that circumstances, the relevant date of filing the refund claim shall be 30-8-2018 and within one year of the said date. Hence, the refund claim filed by the appellant is not barred by limitation.
By placing reliance on the aforesaid judgement, it can be stated that the relevant date can be considered as 1st June, 2021 on which the retrospective amendment has been made in proviso to section 50 of CGST Act, 2021. Therefore, if taxpayer has already paid the interest on gross tax liability, he can file refund application within 2 years from the aforesaid said date i.e. June 1, 2021.