225.            ABC ltd is a construction company rendering services and paying GST in accordance with the Act. They undertook certain construction work on behalf of a trust and paid the tax but did not collect such tax from the trust however later they filed refund claim for the tax so paid contending that they were not actually liable to pay tax as it was exempt.

Although department did not dispute the fact that tax was exempt in the instant case, it nevertheless rejected the refund claim on the ground that refund application filed by the taxable person was beyond the limitation period as stated in the GST Act.

Is the department correct in rejecting the refund claim?

 The case is falling within the provisions of CGST Act, therefore the provision of limitation shall be applied. If tax has been paid treating it as by mistake, the refund claim has to be filed under the Act only and limitation under the section 54(1) would apply.