The uncertainty continues around the law relating to refund of taxes in India. The Indian tax laws contain a mechanism relating to recovery of duties/taxes short paid to enable the revenue authorities to secure the appropriate payment of duties/taxes to the government coffers.
Equally, the tax payer's are given an opportunity to seek refund of duties/taxes paid in excess. The law goes one step further and also allows for interest on the duties/taxes deposited in excess. But, the claim by the tax payer has to pass the rigour of the law in the form of unjust enrichment. There is a presumption cast against the tax payer that the incidence of the duty has been passed on, unless proved contrary.
Consequently, it is not sufficient for a tax payer in India to merely evidence his claim to refund by showing the sustainability of its claim to an exemption or a lower rate of duty. Amongst other things, the tax payer has to establish beyond doubt that burden of tax payment has not been shifted downstream to its consumers.
Thus, refund proceedings are often litigious and act as a technical barrier for the ease of doing business in India. To compound the burden of the tax payers, different Courts in various judicial precedents have set varying evidentiary benchmarks for an assessee to prove its eligibility to refund by overcoming the age old barrier of ‘unjust enrichment’.
To reduce the uncertainty around the process of claiming refund under taxing statutes in India, Lakshmikumaran & Sridharan is organizing a conference call on 30th November 2018, from 4:00 PM – 5:00 PM.
Mr. BL Narasimhan, Principal Partner, L&S will discuss about the evolution of the principles of refund and unjust enrichment, with a special focus on provisions of Customs Act, 1962 and landmark judicial precedents till date.