Refund Fund and Fun

Another great column by Shri Vijay Kumar, after writing my favorite column DDT for a record achieving period!

In this Article, he has explained the story of the doctrine of ‘unjust enrichment’ in a lucid and interesting language, which must be learned by all persons ‘concerned’ about refund of indirect taxes.

As regards GST refunds, presently, most of the refund claims are being filed towards:

(1) IGST paid on zero rated supplies
(2) Accumulated ITC on account of zero rated supplies made without payment of IGST
(3) Accumulated ITC on account of Inverted Tax/Rate Structure
(4) Balance lying in electronic cash ledger

The aspect of unjust enrichment is not applicable to the refunds on account of zero rated supplies and inverted tax structure, as per the provisions of Section 54(8) of the CGST Act, 2017. Refund of balance lying in electronic cash ledger is not refund of tax, but it is a refund of deposit and so, the doctrine of unjust enrichment is not applicable to such refunds also. Thus, the refunds of types mentioned at (1) to (4) herein-above cannot be credited to the Fund.

For GST excess assessed & paid/debited, for which the aspect of unjust enrichment is applicable, the online menu for applying for such refunds, has not been opened yet, so far as I know.

These are personal views.

Shvetal Parikh 22/08/2018