A recipient of goods or services cannot file GST refund application: Madras HC

 

The Hon’ble Madras High Court in the case of Tvl. Norton Granites & Properties Private Ltd. v. Assistant Commissioner (ST) [Writ Petition No. 13522 of 2024 dated June 12, 2024], held that the refund application for excess tax paid must be filed by the registered service provider, not by the recipient of services. Since M/s KG Foundation was the registered entity, the Assessee’s direct refund claim was deemed invalid. Consequently, the writ petition was dismissed.

M/s. Tvl. Norton Granites & Properties Private Ltd. (“the Petitioner”), had entered into an agreement for development/sale with KG Foundation Private Limited. Under the said agreement, the property was to be developed by KG Foundation. In relation thereto, the petitioner states that KG Foundation collected GST at 18% in relation to the construction activities.   The GST rate for the services should have been 5%, the Petitioner contended and thus, filed an application of refund for the surplus GST paid.

The refund application was rejected by the assistant commissioner (ST) (“the Respondent”) via an order on November 24, 2022 (“the Impugned Order”) for the assessment period 2018-19, mentioning that merely KG Foundation was enrolled service provider has the power to furnish the refund claim. The applicant dissatisfied with the impugned order furnishes the present writ petition to the Hon’ble Madras High Court.

The Hon’ble Madras High Court held that, the GST on construction services was levied on a forward charge basis, meaning the service provider is responsible for tax collection. Consequently, the refund application should have been filed by KG Foundation, the registered service provider, rather than the recipient of the services. Hence, the writ petition was dismissed.

 

The copy of the order is as under:

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