Relevance of relevant date in case of export
The time limit for filing the refund claim is to be checked from the “relevant date”. This term is defined in Explanation 2 to section 54. This update is about the interpretation of term “relevant date” & its significance in determining the time limit for filing the refund claim.
Section 54(1) of CGST Act, 2017 prescribes that 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. Therefore, the refund application may be filed before expiry of two years from the relevant date.
Further, the term relevant date is defined in Explanation 2 to section 54. This explanation provides various dates for different types of exports like if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; in the case where tax is paid provisionally under this Act or the rules made there under, the date of adjustment of tax after the final assessment thereof;
In the case of refund of unutilised input tax credit under sub-section (3), the end of the financial year in which such claim for refund arises; etc. Therefore, different types of relevant dates are prescribed for different types of refund.
In case of refund of unutilized Input tax credit, the relevant date is prescribed at the end of financial year in which such refund claim arises. Some experts are of the view that for filing the refund claim, the relevant date is to be seen as the starting date for filing the refund claim. In other words, as per view was taken by them, the refund claims of unutilized credit under GST cannot be filed before 31.3.2018.
On the other hand, there is another school of thoughts which is of view that the term “relevant date” has been defined for a restrictive purpose. The definition of “relevant date” as given in the explanation to section 54 is simply meant to calculate the time limit under this section. Reading the explanation with subsection 1 of section 54; it is clear that the registered person may make an application before the expiry of two years from the relevant date which in case of refund of unutilized credit is an end of financial year.
It is worthwhile to mention here that refund claim may be filed even before the end of financial year as the definition of relevant date is simply for the purpose of determining the last date of filing the refund claim which in a case will be two years from the end of financial year. This means, in case of refund of unutilized credit accumulated during the financial year 2016-17; the last date or time limit of two years will be calculated from 1.4.2018 which comes up to 31.3.2020.
We too follow the second school of thoughts as even in Excise regime also, the relevant date was meant simply for calculating the last date of filing the refund claim, it didn’t prescribe the starting date of a refund claim. The same language has been continued in GST regime too, therefore, the interpretation will also be carried forward.
This interpretation is further strengthened by the fact that the government has already taken steps to admit the refund claims, particularly, the refund of unutilized credit and many of the exporters have already received the refund claim amount for the month of July, 2017; i.e. the first month of GST regime. If the interpretation taken by the first school of thoughts is accepted, no refund claim could have been filed before 1.4.2018.
However, the government itself is allowing the same which proves that the definition of relevant date is merely for the purpose of calculating the time limit/ last date of filing the refund claim, it doesn’t prescribe that it will be considered for the purpose of calculating the first date of filing the claim of refund.