The tax authority said the period between filing a refund claim and an officer issuing a deficiency notice will not be counted in the total time limit available for filing a refund request
The Central Board of Indirect Taxes and Customs (CBIC) has eased the norms for claiming Goods and Services Tax (GST) refunds making it easier for businesses to rectify their applications.
The tax authority said in the CGST (Fourth Amendment) Rules issued on Tuesday that the period between filing a refund claim and an officer issuing a deficiency notice will not be counted in the total time limit available for filing a refund request. This helps businesses as the time lost in rectifying the application will not lead to rejection of the claim.
Experts said that in recent times, many GST refund applications were returned on the grounds of deficiency urging the company to file a fresh application. The rectified application was treated as a new refund claim and in several instances, its filing date is taken as the relevant date resulting in rejections on the ground of breach of time limits, said Niraj Bagri, Partner, Dhruva Advisors LLP.
The amendment puts to rest this controversy, providing that the time period from the date of filing of original refund application till the time the deficiency letter is issued, will be excluded for determining the two-year period available.
The move comes at a time businesses are facing disruption in economic activity due to lockdown like situation in many parts of the country to fight back the pandemic. CBIC has already launched a tax refund drive till end of the month to ease the liquidity problems of businesses. The idea is to process all pending GST refund claims on priority.
The tax authority earlier this month offered relief to businesses by cutting the interest and late fee for delayed reporting of March and April sales. Due date for reporting transactions in a month and paying applicable GST falls on the subsequent month and the compliance relief is applicable for the returns to be filed and taxes to be remitted in April and May.