The Input Tax Credit (ITC) refund on purchase of the inputs used in supply to SEZ by the Petitioner was denied for the month of February 2018 for the reason of limitation period. Petitioner is a registered company under CGST Act and is engaged in the business of manufacturing and supply of Genset for home consumption and/or to SEZ. In February 2018 petitioner supplied DG set and panel to a unit of M/s Newfound Properties and Leasing Pvt. Ltd situated in SEZ. Section 16 of IGST Act, 2017 defines supply to SEZ as zero rated supply and section 54(3) of CGST Act,2017 stipulates that a registered person can claim refund of unutilised ITC.

As per earlier provisions of section 54 of CGST Act,2017, for the purpose of claiming refund of ITC subjected to conditions enumerated therein, a person has to file application for refund within 2 years from the end of relevant date. Relevant date is last day of the end of financial year in which such claim for refund arises i.e for February 2018, financial year ends on 31.03.2018. Hence relevant date is 31.03.2018 and 2 years hence forth ends on 31.03.2020. However amendment to explanation to CGST Act 2017 which came into force on 01.02.2019 stated that relevant date to file application of refund shall be 2 years from the end of last day of furnishing of return under section 39 for the period in which such claim arises i.e for February 2018, last date of furnishing GSTR 3B u/s 39 expires on 20.03.2018. Hence relevant date is 20.03.2018 and 2 years hence forth ends on 20.03.2020. In the present case petitioner filed refund application on 02.05.2020 before Adjudicating Authority, who rejected the claim on 05.05.2020 on the grounds of application being time barred.

Against the order dated 05.05.2020 of Adjudicating Authority rejecting the refund application the petitioner filed appeal before Joint Commissioner (Appeals) CGST, who rejected the refund application on 29.01.2021 observing that Adjudicating Authority has given opportunity for submission of documents through personal hearing in support of claim, but petitioner had neither submitted documents nor attended personal hearing as called. The petitioner was not able to submit sufficient document to prove that claim was filed within prescribed time limit. Instead, petitioner came with the plea that on account of pandemic COVID -19 the time limit to file application was extended from 20.03.2020 to 30.06.2020 vide notification no 35/2020-CT dated 03.04.2020. Appellate Authority upheld the decision of Adjudicating Authority of rejection of refund claim as proper and as per law.

During the pendency of petition, Government of India vide notification no 13/2022-CT dated 05.07.2020 excluded the period from 01.03.2020 to 28.02.2022 for computation of period of limitation for all refund applications u/s 54 or 55.