Assessee cannot claim supplementary refund based on fresh calculation, after the original refund application has already been processed

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The Hon’ble Odisha High Court in the matter of Vedanta Ltd. v. Union of India [W.P.(C) No. 33278 of 2020 with W.P.(C) No. 24499 of 2020 and W.P.(C) No. 32166 of 2021 dated January 4, 2023] held that, when Input Tax Credit (“ITC”) has been claimed for multiple units of a company registered under a single Goods and Services Tax Identification Number (“GSTIN”) by considering all units together as one, then the assessee cannot claim supplementary refund by computing transaction of each individual unit treating as separate entity or separate “registered person”.

Facts:

Vedanta Limited (“the Petitioner”) is a public limited company involved in the business of manufacture of aluminium products and has three units viz. Aluminum Refinery with Captive Power Plant, Aluminum Smelter and Thermal Power Plant, having common GSTIN Registration.

The Petitioner have made exports and supplied output of the respective units to another unit located in Special Economic Zone (“SEZ”) having a separate GSTIN Registration. All the three units made zero rated supplies to the unit in the SEZ and also made supplies to persons located in Domestic Tariff Area (“DTA”). The Petitioner sought for a refund of unutilized ITC including Compensation Cess in Form RFD-01 for the periods September, 2017 to January, 2018; July, 2018 to September, 2018 and November, 2018 to February, 2020 paid for the procurement of coal used as input as the supplies were considered zero-rated under Section 16 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).

The refund claimed was allowed by the Assistant Commissioner, GST and Central Excise (“the Respondent”) but the Petitioner found that the quantum of the refund as allowed by taking into consideration all the three units together was much lesser than the quantum of refund if the supplies are made unit-wise, therefore the Petitioner manually applied for grant of supplementary refund. The Respondent refused to grant supplementary refund on the grounds that the Petitioner had already taken the benefits of refund and was claiming supplementary refund on the basis of separate unit-wise calculation was not tenable.

Being aggrieved, this petition has been filed challenging the decision of the Respondent of not entertaining the application of the Petitioner for supplementary return.

Issue:

Whether the Petitioner, having three units registered under single GSTIN, can claim supplementary return by taking unit-wise calculation when ITC has been already granted by taking into consideration all the three units together?

Held:

The Hon’ble Orissa High Court in W.P.(C) No. 33278 of 2020 with W.P.(C) No. 24499 of 2020 and W.P.(C) No. 32166 of 2021 held as under:

  • Noted that, since three units of the company have been assigned one GSTIN, they are considered as a single entity for making claims under the CGST Act. Further noted that, the Petitioner requested to combine the refund of the three units, which was granted and the Petitioner received the benefit.
  • Stated that, the Petitioner cannot request for additional refund by submitting another application for supplementary refund by calculating the refund amount based on the transactions of each unit individually.
  • Opined that, the three units of the Petitioner having the same GSTIN, are to be considered as one “person” in terms of Section 25 read with Section 2(84) and Section 2(94) of the CGST Act.
  • Stated that, the Petitioner cannot request for a supplementary refund by calculating the transactions of each individual unit as separate entities or separate “registered persons.” Further observed that, the supplementary refund applications were submitted after the specified time period, thus the Respondent was correct in declining to consider the application. Moreover, supplementary refund applications submitted for a new evaluation using unit-wise figures is not allowed by any statutory provision as the original refund application has already been processed.
  • Noted that, the statute does not provide for the submission of supplementary refund applications and such applications cannot be based on a different stance than the one taken in the original refund application. The transactions of all three units were thoroughly reviewed and a refund was granted. The Petitioner, having accepted the decision, cannot later change its stance and request for an additional refund.
  • Relied on the judgment of the Hon’ble Supreme Court in the matter of Jayam & Co. v. Assistant Commissioner [(2016) 96 VST 1 (SC)] wherein, it was observed that ITC is a concession provided by the legislature that can be subject to certain conditions. Further relied on the judgment of the Supreme Court in the matter of State of Gujarat v. Reliance Industries Ltd. [(2018) 50 GSTR 14 (SC)] wherein, it was laid that the amount of ITC to be allowed and the conditions under which it is to be allowed are within the purview of the legislature. The right to claim ITC is only granted under the statute with specific conditions and restrictions and the ability to claim ITC is established by the tax law and is based on the terms provided in the legislation and these provisions must be strictly adhered to.
  • Observed that, the Respondent, having adjudicated the application for refund based on transactions of all the three units taken together as per the calculation made by the Petitioner itself, had no scope for the Petitioner to again entertain further claim made on the self-same transactions by computing such refund taking into consideration unit-wise figures, more so when the returns have been furnished by disclosing consolidated figures.
  • Opined that, having claimed refund of unutilized ITC on account of zero-rated supplies by clubbing up all the transactions relating to three units, there is no scope for the Petitioner to insist on consideration of supplementary refund application based on fresh calculation made by taking into account transactions of individual unit wise.
  • Held that, even though the Petitioner has claimed to have kept unit-wise accounts with relevant data, since the three units of the Petitioner have a common GSTIN and have filed consolidated returns for the related tax periods, the figures cannot be considered unit-wise for refund claims. Thus, the Respondent has considered the original refund application by taking the figures of all the three units together is correct.
  • Further held that, Rule 89(4) of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”) is intra vires and being framed in conformity with the powers conferred on the Government under Section 164 of the CGST Act, there is no necessity to read down Rule 89(4) of the CGST Rules.

Relevant Provisions:

Section 54(1) of the CGST Act:

“54. Refund of tax –

(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 manner as may be prescribed.”

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