54. Refund of tax.
(1) Any person claiming refund of any tax and interest, if any, paid
on such tax or any other amount paid by him, may make an application before
the expiry of two years from the relevant date in such form and manner as
may be prescribed :
Provided that a registered person, claiming refund of any balance in the
electronic cash ledger in accordance with the provisions of sub-section (6) of
section 49, may claim such refund in the return furnished under section 39 in
such manner as may be prescribed.
(2) A specialized agency of the United Nations Organization or any
Multilateral Financial Institution and Organization notified under the United
Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of six months from the last day of the quarter in which such supply was received.
(3) Subject to the provisions of sub-section (10), a registered person may
claim refund of any unutilised input tax credit at the end of any tax period :
Provided that no refund of unutilised input tax credit shall be allowed
in cases other than—
(i) zero-rated supplies made without payment of tax ;
(ii) where the credit has accumulated on account of rate of tax on
inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council :
Provided further that no refund of unutilised input tax credit shall
be allowed in cases where the goods exported out of India are subjected
to export duty :
Provided also that no refund of input tax credit shall be allowed, if
the supplier of goods or services or both claims refund of the integrated
tax paid on such supplies.
(4) The application shall be accompanied by—
(a) such documentary evidence as may be prescribed to establish
that a refund is due to the applicant ; and
(b) such documentary or other evidence (including the documents
referred to in section 33) as the applicant may furnish to establish that
the amount of tax and interest, if any, paid on such tax or any other
amount paid in relation to which such refund is claimed was collected
from, or paid by, him and the incidence of such tax and interest had not
been passed on to any other person :
Provided that where the amount claimed as refund is less than two
lakh rupees, it shall not be necessary for the applicant to furnish any
documentary and other evidences but he may file a declaration, based
on the documentary or other evidences available with him, certifying
that the incidence of such tax and interest had not been passed on to any
other person.
(5) If, on receipt of any such application, the proper officer is satisfied
that the whole or part of the amount claimed as refund is refundable, he may
make an order accordingly and the amount so determined shall be credited
to the Fund referred to in section 57.
(6) Notwithstanding anything contained in sub-section (5), the proper
officer may, in the case of any claim for refund on account of zero-rated supply
of goods or services or both made by registered persons, other than such
category of registered persons as may be notified by the Government on the
recommendations of the Council, refund on a provisional basis, ninety per
cent. of the total amount so claimed, excluding the amount of input tax credit
provisionally accepted, in such manner and subject to such conditions,
limitations and safeguards as may be prescribed and thereafter make an order
under sub-section (5) for final settlement of the refund claim after due
verification of documents furnished by the applicant.
(7) The proper officer shall issue the order under sub-section (5) within
sixty days from the date of receipt of application complete in all respects.
(8) Notwithstanding anything contained in sub-section ( 5), the
refundable amount shall, instead of being credited to the Fund, be paid to
the applicant, if such amount is relatable to –
(a) refund of tax paid on zero-rated supplies of goods or services or
both or on inputs or input services used in making such zero-rated
supplies ;
(b) refund of unutilised input tax credit under sub-section (3) ;
(c) refund of tax paid on a supply which is not provided, either wholly
or partially, and for which invoice has not been issued, or where a refund
voucher has been issued ;
(d) refund of tax in pursuance of section 77 ;
(e) the tax and interest, if any, or any other amount paid by the
applicant, if he had not passed on the incidence of such tax and interest
to any other person ; or
(f) the tax or interest borne by such other class of applicants as the
Government may, on the recommendations of the Council, by notification,
specify.
(9) Notwithstanding anything to the contrary contained in any judgment,
decree, order or direction of the Appellate Tribunal or any court or in any
other provisions of this Act or the rules made thereunder or in any other law
for the time being in force, no refund shall be made except in accordance
with the provisions of sub-section (8).
(10) Where any refund is due under sub-section (3) to a registered
person who has defaulted in furnishing any return or who is required to pay
any tax, interest or penalty, which has not been stayed by any court, Tribunal
or Appellate Authority by the specified date, the proper officer may—
(a) withhold payment of refund due until the said person has
furnished the return or paid the tax, interest or penalty, as the case may
be ;
(b) deduct from the refund due, any tax, interest, penalty, fee or any
other amount which the taxable person is liable to pay but which remains
unpaid under this Act or under the existing law.
Explanation.––For the purposes of this sub-section, the expression
“specified date” shall mean the last date for filing an appeal under this Act.
(11) Where an order giving rise to a refund is the subject matter of an
appeal or further proceedings or where any other proceedings under this
Act is pending and the Commissioner is of the opinion that grant of such
refund is likely to adversely affect the revenue in the said appeal or other
proceedings on account of malfeasance or fraud committed, he may, after
giving the taxable person an opportunity of being heard, withhold the refund
till such time as he may determine.
(12) Where a refund is withheld under sub-section (11), the taxable
person shall, notwithstanding anything contained in section 56, be entitled
to interest at such rate not exceeding six per cent. as may be notified on the
recommendations of the Council, if as a result of the appeal or further
proceedings he becomes entitled to refund.
(13) Notwithstanding anything to the contrary contained in this section,
the amount of advance tax deposited by a casual taxable person or a nonresident taxable person under sub-section (2) of section 27, shall not be
refunded unless such person has, in respect of the entire period for which
the certificate of registration granted to him had remained in force, furnished
all the returns required under section 39.
(14) Notwithstanding anything contained in this section, no refund
under sub-section (5) or sub-section (6) shall be paid to an applicant, if the
amount is less than one thousand rupees.
Explanation.—For the purposes of this section,––
(1) “refund” includes refund of tax paid on zero-rated supplies of
goods or services or both or on inputs or input services used in making
such zero-rated supplies, or refund of tax on the supply of goods regarded
as deemed exports, or refund of unutilised input tax credit as provided
under sub-section (3).
(2) “relevant date” means –
(a) in the case of goods exported out of India where a refund of
tax paid is available in respect of goods themselves or, as the case
may be, the inputs or input services used in such goods,––
(i) if the goods are exported by sea or air, the date on which
the ship or the aircraft in which such goods are loaded, leaves
India ; or
(ii) if the goods are exported by land, the date on which
such goods pass the frontier ; or
(iii) if the goods are exported by post, the date of despatch
of goods by the Post Office concerned to a place outside India ;
(b) in the case of supply of goods regarded as deemed exports
where a refund of tax paid is available in respect of the goods, the
date on which the return relating to such deemed exports is
furnished ;
(c) in the case of services exported out of India where a refund
of tax paid is available in respect of services themselves or, as the
case may be, the inputs or input services used in such services, the
date of––
(i) receipt of payment in convertible foreign exchange,
where the supply of services had been completed prior to the
receipt of such payment ; or
(ii) issue of invoice, where payment for the services had
been received in advance prior to the date of issue of the invoice ;
(d) in case where the tax becomes refundable as a consequence
of judgment, decree, order or direction of the Appellate Authority,
Appellate Tribunal or any court, the date of communication of such
judgment, decree, order or direction ;
(e) in the case of refund of unutilised input tax credit under
sub-section (3), the end of the financial year in which such claim for
refund arises ;
(f) in the case where tax is paid provisionally under this Act or
the rules made thereunder, the date of adjustment of tax after the
final assessment thereof ;
(g) in the case of a person, other than the supplier, the date of
receipt of goods or services or both by such person ; and
(h) in any other case, the date of payment of tax.
55. Refund in certain cases
The Government may, on the recommendations of the Council, by
notification, specify any specialized agency of the United Nations Organization
or any Multilateral Financial Institution and Organization notified under
the United Nations (Privileges and Immunities) Act, 1947(46 of 1947), Consulate or Embassy of foreign countries and any other person or class of persons as may
be specified in this behalf, who shall, subject to such conditions and
restrictions as may be prescribed, be entitled to claim a refund of taxes paid
on the notified supplies of goods or services or both received by them.
56. Interest on delayed refunds
If any tax ordered to be refunded under sub-section (5) of section
54 to any applicant is not refunded within sixty days from the date of receipt
of application under sub-section (1) of that section, interest at such rate not
exceeding six per cent. as may be specified in the notification issued by the
Government on the recommendations of the Council shall be payable in
respect of such refund from the date immediately after the expiry of sixty
days from the date of receipt of application under the said sub-section till
the date of refund of such tax :
Provided that where any claim of refund arises from an order passed by
an adjudicating authority or Appellate Authority or Appellate Tribunal or
court which has attained finality and the same is not refunded within sixty
days from the date of receipt of application filed consequent to such order,
interest at such rate not exceeding nine per cent. as may be notified by the
Government on the recommendations of the Council shall be payable in
respect of such refund from the date immediately after the expiry of sixty
days from the date of receipt of application till the date of refund.
Explanation.––For the purposes of this section, where any order of
refund is made by an Appellate Authority, Appellate Tribunal or any court
against an order of the proper officer under sub-section (5) of section 54, the
order passed by the Appellate Authority, Appellate Tribunal or the court
shall be deemed to be an order passed under the said sub-section (5).
57. Consumer Welfare Fund .
The Government shall constitute a Fund, to be called the Consumer
Welfare Fund and there shall be credited to the Fund,––
(a) the amount referred to in sub-section (5) of section 54 ;
(b) any income from investment of the amount credited to the Fund ;
and
(c) such other monies received by it, in such manner as may be prescribed.
58. Utilisation of Fund
(1) All sums credited to the Fund shall be utilised by the Government
for the welfare of the consumers in such manner as may be prescribed.
(2) The Government or the authority specified by it shall maintain
proper and separate account and other relevant records in relation to the
Fund and prepare an annual statement of accounts in such form as may be
prescribed in consultation with the Comptroller and Auditor General of India.
