Clerical Error Cannot Justify Denial Of Refund Of IGST Paid Twice: GSTAT Thiruvananthapuram

On 17 September, the Thiruvananthapuram Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) held that a clerical error in reporting export turnover in GSTR-3B cannot by itself justify denial of refund of IGST paid twice by an exporter.

A Division Bench comprising Vice-President Subramanya Rayaprol and Technical Member Ramamoorthi Sriram set aside the Orders rejecting Choice Cashew Industries' refund claims and allowed the three appeals with consequential reliefs. The Bench described the error as “making correct entries at wrong places”.

Choice Cashew Industries, the exporter correctly reported its exports in GSTR-1 for November 2018, December 2018 and February 2019. However, it mistakenly reported the export turnover and corresponding IGST in Table 3.1(a) of GSTR-3B instead of Table 3.1(b), which covers zero-rated supplies.

The mismatch prevented the Customs system from processing the automatic IGST refund. The exporter subsequently paid the same IGST again in August 2019, correctly reported the exports and received a refund of Rs. 18,27,272 through the Customs system.

The exporter did not receive refunds of the original payments of Rs. 9,41,390, Rs. 4,55,293 and Rs. 4,30,587 for the three months. The authorities rejected the refund claims on the ground that the exporter had already received the refund.

The Bench found that the refund already received related to the second payment, while the present claims concerned the original IGST payments. It held that there was no justification for the Revenue to retain tax effectively paid twice.

Accordingly, the GSTAT set aside the Orders and allowed the three appeals with consequential reliefs.

Counsel for Appellant: KR Balachandran, Advocate

Counsel for Respondent: Suresh S., AR