The Tribunal held that while credit notes issued within the statutory time limit must be excluded from adjusted total turnover for the purpose of refund under Rule 89(5), credit notes pertaining to a prior financial year but issued beyond the permissible deadline cannot be given the same treatment.
The Goods and Services Tax Appellate Tribunal, Kolkata Bench, has partially modified a refund order under the inverted duty structure, disallowing the exclusion of credit notes worth ₹1,01,510 from the adjusted total turnover on the ground that they were issued beyond the time limit prescribed under Section 34(2) of the CGST Act [Commissioner of CGST, Siliguri v. M/s Rajshahi Banijya Private Limited].
The respondent, a tea trader claiming refund of accumulated ITC for domestic clearances under inverted tax structure for April to June 2021, had issued credit notes totalling ₹12,04,575 during the refund period. The Revenue contended that these credit notes should not have been excluded from the adjusted total turnover for the purpose of refund computation under Rule 89(5), arguing that it was unclear against which invoices they were issued. The First Appellate Authority had rejected this contention and allowed the full refund of ₹4,32,537.
The Bench of Sunil Kumar Singh (Judicial Member) and Bijoy Kumar Kar (Technical Member) undertook a granular examination of the credit notes against the GSTR-1 voucher register and the Chartered Accountant's certificate. The Tribunal found that credit notes worth ₹11,03,065 pertained to invoices raised during the refund period itself and were validly excludable from the adjusted total turnover. However, three specific credit notes totalling ₹1,01,510, though issued in June 2021, related to invoices of Financial Year 2019-20. Under Section 34(2), the deadline for issuing credit notes for FY 2019-20 supplies was 30 September 2020, and these notes had been issued well beyond that deadline. The Tribunal held that the statute does not permit issuance of credit notes beyond the prescribed time limit, and consequently these time-barred credit notes could not be excluded from the adjusted total turnover.
Recalculating the refund using the corrected adjusted total turnover of ₹5,95,52,703 (instead of ₹5,94,51,193), the Tribunal arrived at a maximum permissible refund of ₹4,30,073 — a reduction of ₹2,464 from the sanctioned amount. The First Appellate Authority's order was modified to this extent, and the original authority was directed to recover the excess. The decision offers a practical reminder that while credit notes issued within the statutory window legitimately reduce turnover for refund purposes, the time limit under Section 34(2) is a hard boundary that cannot be overlooked, however small the amount involved.
2026-juristway.com-2839-GSTAT(Kolkata)-GST | GSTAT Kolkata | APL/18/KLK/2026 | 07.10.2026
