This Tax Alert summarizes a recent circular [1] issued by the Central Board of Indirect Taxes and Customs (CBIC). Circular clarifies on extension of limitation period under Goods and Services Tax (GST) in terms of the Supreme Court (SC) order.
Taking suo moto cognizance of the situation arising due to Covid-19 pandemic, SC, restoring its order dated 23 March 2020 and in continuation of order dated 8 March 2021, had extended the limitation period (prescribed under general or special law) in respect of judicial and quasi-judicial proceedings until further orders.[2]
The key clarifications are:
- The extension applies only to quasi-judicial and judicial matters relating to petitions, applications, suits, appeals and all other proceedings of similar nature.
- SC Order will also cover revision or rectification of any order but not any original adjudication or other proceedings under the Central Goods and Services Tax (CGST) Act.
- Extension granted by SC will not be applicable to proceedings initiated or compliances done by the taxpayer.
- Actions of tax authorities of hearing and disposing the matters as quasi-judicial authority, will be governed by the extensions granted by the statutes or notifications.
Circular summarizes that the extension granted by SC covers appeals to be filed and the proceedings to be undertaken for revision and rectification.
Comments
- While the Circular restricts the extended period for filing refund applications, it also clarifies that the extension is not applicable in respect of first level adjudication proceedings like issuance of SCN, passing orders etc.
- It is relevant to note that Commercial Taxes Department, Chennai had earlier issued an internal instruction elucidating that SC order is applicable for revocation of cancellation of GST registration. Even under IP laws, Delhi HC held that the extension is applicable for undertaking various compliances by the industry.
- Though the period for filing appeal before any quasi-judicial authority is covered by the SC order, the circular seems to clarify that the time limit for disposal of the same is not covered by the said order.
In light of the Circular, one can analyse the impact on timelines applicable to similar proceedings under the Income tax Act.
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