The GST Authority of India Tribunal (GSTAT) ruled that input tax credit (ITC) accumulated before July 18, 2022, cannot be denied solely due to delayed refund applications. The restriction under Rule 89(2A) is not retroactive.
GSTAT: Pre-2022 ITC Refund Valid Despite Late Application
The GST Authority of India Tribunal (GSTAT) has held that the requirement of filing refund applications within two years under Rule 89(2A) of the CGST Rules, 2017, cannot be applied retroactively to deny refunds of unutilised input tax credit (ITC) accumulated before July 18, 2022. The amendment introducing the time bar does not affect accrued rights.
The taxpayer had accumulated ITC due to inverted duty structure prior to the rule change but filed the refund claim after the deadline. The department rejected it relying on the amended rule. GSTAT set aside the order, noting that the right to refund arose prior to the amendment and cannot be extinguished by a subsequent procedural restriction.
This decision protects taxpayers who accrued ITC before the 2022 restriction. Practitioners should assess eligible pre-amendment ITC balances and file pending claims, citing this precedent. The ruling reinforces the principle against retroactive application of procedural bars to substantive entitlements.
Citations
- CGST Rules, 2017, Rule 89(2A)
