Summary: Under the CGST Act, 2017, Section 54(1) of the Act allows “any person” to claim a refund of tax paid, which includes both suppliers and recipients. Although there have been instances where authorities have argued that only suppliers can claim refunds, the legal text supports a broader interpretation. The term “any person” in Section 54(1) suggests that the scope for claiming refunds is not limited to suppliers but extends to recipients as well. Judicial decisions from the Gujarat High Court in M/s. Ipca Laboratories Ltd. v. Commissioner and M/s. SE Forge Ltd v. Union of India, and from the Madras High Court in Platinum Holdings Pvt Ltd v. Additional Commissioner of Central GST, affirm that recipients are eligible to seek refunds. These rulings highlight that the statutory language is clear and inclusive, rejecting restrictive interpretations and reinforcing the broad eligibility for refund claims under the CGST Act. Thus, recipients can indeed claim refunds under Section 54(1) of the CGST Act, aligning with the law’s intent and judicial precedents.
In several cases the department holds that the option of refund claim is available only with the supplier and not with the recipient. Hence, “Recipient” cannot claim the refund.
Refund claim is preferred u/s 54(1) of the Act, it is necessary to appreciate the provisions of sub-section (1) which reads as under:
“(1) 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:
Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in [such form and] such manner as may be prescribed.
Sub-section (1) as it emanates from plain reading from above, entitles “any person” to seek refund of “any tax”. Use of the word “any” with respect to the categories of a person as well as the categories of payments are to be construed in its widest possible amplitude and be deemed to expand the scope without boundaries and limits.
Use of “any person” expands the eligibility beyond the specifications such as supplier, recipient, registered, unregistered etc. Any person whether supplier or recipient or a person other than the supplier or recipient stands qualified to fall within the ambit of the eligible person who can resort to the provisions of sub-section (1). Hence, restricting the scope of sub-section (1) to the suppliers of goods and services or both will not only go against the parliamentary intent but also tantamount to put an embargo over the parliamentary function.
It is settled position of law that no condition can be put into the plain language of statute in guise of interpretation or construction thereof. When the language of the statute is plain and unambiguous the same shall have to be read as such without putting any further modifications or alterations.
Few judgements are delivered by the Hon’ble High Courts on which the reliance can be placed.
- Decision of Gujarat High Court in the case of M/s. Ipca Laboratories Ltd. V. Commissioner
- Decision of Gujarat High Court in the case of M/s. SE Forge Ltd v. Union of India
- Decision of Madras High Court in the case Platinum Holdings Pvt Ltd v. Additional Commissioner of Central GST
Based on the above judgements, it is evident that even a “Recipient” can claim the refund u/s 54(1) in DTA as well as in SEZ.
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