CBIC extends the time period to pass refund order under section 54(7) of CGST Act- Notification No. 46/2020-central tax dated 09th June, 2020

[The said Notification shall come into force w.e.f. 20th day of March, 2020] 

Refund Order under GST

As you are aware that Section 54(5) of CGST Act, 2017 provides that-

“If, on receipt of any such application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund referred to in section 57.”

The proper officer shall issue the order under sub-section (5) within sixty days from the date of receipt of application complete in all respects. [Section 54(7)]”

Due to Covid-19 virus, the difficulties may be faced by every registered person in filing their replies/petitions/applications/suits/ appeals/all other proceedings within the period of limitation prescribed under the respective laws, even the departments are also facing to accomplish their duties on time for issuing various orders/judgments under the timelines farmed in laws.

Illustration depicting an illuminated neon sign with a refund concept

Such situation is same in the case of refund of order by the GST Department on time. Pursuant to the provision of sub-section (7) of Section 54, the proper officer shall issue the order under sub-section (5) within sixty (60) days from the date of receipt of application complete in all respects.

However, due to COVID-19 virus, many registered persons could not submit their reply regarding notice issued by the department for rejection of refund claim, in full or in part, whereas time limit for issuance of order  in terms of the provisions of sub-section (7) of Section 54 of the said Act falls during the COVID-19 period (prescribed From 20th March 2020 to 29th June 2020 in notification) and also therefore, the department could not finalised/determine the amount of refund and not issued any order within time.

In view of the spread of across many countries of the world including India, the Government, on the recommendation of the Council, hereby notifies that in case where a notice has been issued for rejection of refund claim, in full or in part & where time limit for issuance of order (i.e. 60 days From receipt of application) in terms of the provisions of sub-section (5), read with sub-section (7) of Section 54 of the said Act falls during the period From 20th March 2020 to 29th June 2020, in such cases the time limit for issuance of said order shall be extended to 15 days after receipt of reply of notice from registered person or 30th June 2020, whichever is later.

In simple words, if refund order date falls between 20th March to 29th June 2020 in that case refund order can be issued within 75 days (i.e. 60 + 15 Days) of receipt of reply of notice or 30th June 2020, whichever is later.

Conclusion:

1. Notification is applied only in case

a) where a notice has been issued for rejection of refund claim, in full or in part; and

b) where time limit for issuance of order in terms of the provisions of sub-section (5), read with sub-section (7) of Section 54 of the said Act falls during the period from 20th March 2020 to 29th June 2020.

2. In such cases the time limit for issuance of said order is extended to 15 days after receipt of reply of notice from registered person or 30th June 2020, whichever is later.

Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.

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