Time period for filing of GST refund application has been extended

Last updated: 22 May 2021

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Quick Summary

The time limit for filing GST refund applications has been extended. Previously, if a refund application was rejected due to deficiencies, a new application had to be filed within two years of the relevant date. However, a recent amendment now excludes the period between the deficiency notice and the refiling of the application from the two-year limit. This means a new application will be considered as filed on the original date, providing more flexibility for businesses.

The extension provided for filing of refund application vide N/N: 15/2021 of CGST Act dated 18.05.2021

Insertion of a proviso under Rule 90(3) of the CGST Rules: The time period from the date of filing of the refund claim in FORM GST RFD-01 till the date of communication of the deficiencies in FORM GST RFD-03 by the proper officer, is to be excluded from the period of 2 years in case fresh refund claim is filed after rectification of the deficiencies.

Explanation

As per section 54 of the CGST Act, a refund application can be filed in GST RFD 01 within 2 years from the relevant date. Now suppose any deficiencies have been found during the verification of the refund application by the proper officer. Then he will issue the deficiency memo in RFD 03. Some days will be taken by him during this process and a proper officer has cancelled the refund application of the assessee.

Now the assessee needs to file a fresh application removing the deficiencies.

GST Refund Application Time Extended: New Rules Explained

Prior to the amendment

This new application should have also been filed within the period of 2 years from the relevant date. If the first application was filed within the prescribed period and after the cancellation of the same if the new application filed after expiring of 2 years from the relevant date, then this new application was not entertained by the proper officer stating that the application has become time-barred.

Situation post amendment vide N/N 15/2021 of CGST Act dated 18.05.2021

Now if a fresh application is filed after the rejection of the old application, the time period from the date of issuance of deficiency memo till the date of filing of the new application shall be excluded while computing the time period of 2 years from the relevant date. The fresh application shall be deemed to have been filed on the same date on which the first application was filed.