Refund of pre-deposit for filing appeal governed by section 107 read with section 115 of the CGST Act, and not section 54 of the CGST Act – Supreme Court

In brief

In a recent judgement¹ , the Supreme Court held that refund of statutory pre-deposit paid for filing an appeal under section 107 is governed by section 107(6) read with section 115 of the Central Goods and Services Tax Act, 2017 (CGST Act) and not by section 54 of the CGST Act. Previously, Revenue authorities had rejected the taxpayers’ refund application citing that it was filed beyond the limitation period prescribed under section 54 of the CGST Act. In this regard, the High Court held in the favour of the taxpayer, granting the refund, while holding that the limitation period under section 54 of the CGST Act was merely directory and not mandatory. The Supreme Court held that the exercise undertaken by the High Court in respect of section 54 of the CGST Act was unnecessary.