Inverted Duty Refund for Pre-Restriction Period Allowed Despite Later Filing: GSTAT Hyderabad

GSTAT Hyderabad set aside rejection of a ₹61.48 lakh edible-oil refund for May 2020 to March 2021, following High Courts that struck down Circular 181’s filing-date test.

GSTAT Hyderabad has held that a refund of credit accumulated through an inverted duty structure before 18 Jul 2022, when Notification No. 09/2022-Central Tax (Rate) restricted such refunds for edible oils, cannot be refused merely because the application was filed after that date. [Kedia Agro v. Principal Commissioner Hyderabad GST Commissionerate & Ors., 2026-juristway.com-3153-GSTAT(Hyderabad)-GST]

The Bench of Sushil Kumar Sharma, Member (Judicial), and Duvvuri Krishna Srinivas, Member (Technical), allowed the appeal and directed the original authority to decide the claim afresh.

The appellant, an edible oil manufacturer, first applied on 18 Jun 2022 for a refund for May 2020 to March 2021, withdrew that application, and filed a fresh one on 25 Mar 2023 for ₹61,47,671. The refund was rejected under Circular No. 181/13/2022-GST, which applies the restriction to all applications filed on or after 18 Jul 2022.

The Department argued that the restriction applied because the fresh application was filed after the notification took effect, and that the withdrawn application could not help. It also said a review petition was proposed before the Supreme Court.

The Bench relied on M/s Gemini Edibles and Fats India Limited v. Assistant Commissioner of Central Tax, where the Andhra Pradesh High Court struck down the circular to that extent, and noted that the Revenue’s SLPs were dismissed on 9 May 2025. Similar rulings of the Gujarat, Rajasthan, Allahabad and Calcutta High Courts, including Patanjali Foods Ltd. Vs UOI, were also noted. No evidence of any review petition was produced.

The application was within two years under Section 54. The Bench held that ITC is a right that accrues when inputs are bought and cannot be curtailed by giving an executive circular retrospective effect. Any claim to interest is to be examined in the fresh refund proceedings. No costs were awarded.

2026-juristway.com-3153-GSTAT(Hyderabad)-GST