Allowed refund of IGST paid on ocean freight beyond limitation period prescribed under GST Law

Last updated: 18 June 2021

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The Gujarat High Court has ruled that a refund of IGST paid on ocean freight under the reverse charge mechanism can be claimed even if the application is filed beyond the usual time limit. The court stated that tax collected without legal authority is not considered a valid tax, therefore, the standard time limit under Section 54 of the CGST Act does not apply. The claim was found to be within the time limit prescribed by the Limitation Act, 1963.

Court :
Gujarat HC

Brief :
The Hon’ble High Court, Gujarat in M/S Comsol Energy Private Limited v. State of Gujarat [R/Special Civil Application No. 11905 of 2020 decided on December 21, 2020] allowed the refund claim of Integrated Goods and Service Tax ('IGST') paid on ocean freight under the reverse charge mechanism ('RCM') beyond the statutory time limit prescribed under Section 54 of the Central Good and Service Tax Act, 2017 ('the CGST Act'). Held that, the amount collected without authority of law cannot be considered as tax collected and therefore, Section 54 of the CGST Act shall not be applicable. Further, noted that the refund claim was within the time limit prescribed under the Limitation Act, 1963 ('the Limitation Act').

Citation :
R/Special Civil Application No. 11905 of 2020 decided on December 21, 2020

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