Representation to GST Council: Clarification on Refund Eligibility

At the Chamber of Small Industry Association (COSIA), we continuously advocate for the interests of Micro, Small, and Medium Enterprises (MSMEs) across India. Recently, we submitted a detailed representation (dated 19.09.2024) to the Chairperson of the Goods and Services Tax (GST) Council, seeking urgent clarification on the eligibility for GST refunds under Rule 89(4) of the CGST Rules, 2017, particularly when refunds under Rule 89(4B) are not claimed.

Key Issues Raised:

1. Confusion in Refund Claims: Our members have faced challenges with the differing interpretations of refund eligibility under Rules 89(4) and 89(4B). While Rule 89(4) provides a clear formula for calculating refunds, the language in Rule 89(4B) has led to ambiguity, making it difficult for MSMEs to navigate the process.
2. Unjust Notices from GST DGGI: We highlighted that members have received summons and notices alleging excess claims under Rule 89(4). This has caused undue stress and harassment, especially since these claims were previously sanctioned by the GST Department after thorough verification.
3. Legal Precedents: We referred to established legal principles that support the right of taxpayers to choose the more beneficial provision, regardless of specificity. We emphasized that the interpretation by the GST DGGI is inconsistent with settled law.
4. Need for Clarity: We called for clear guidelines stating that refunds already processed and sanctioned under Rule 89(4) should not be subject to further review, allowing MSMEs to focus on growth rather than navigating complex regulatory frameworks.

Our Request:

In our representation, we earnestly urged the GST Council to issue a clarification ensuring that all GST refunds sanctioned in the past are upheld, allowing MSMEs to operate with confidence. We appreciate the GST Council’s acknowledgment of the challenges faced by exporters and look forward to a resolution that prioritizes the interests of MSMEs.

COSIA remains committed to representing the voice of MSMEs and will continue to engage with relevant authorities to facilitate a conducive business environment.