The Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) has allowed the transfer of eight appeals involving a common question: whether interest paid on GST liability discharged through the electronic credit ledger can be refunded in view of the retrospective amendment to Section 50(1) of the Central Goods and Services Tax Act, 2017.
The order, passed on October 12, 2026, by GSTAT President Justice (Retd.) Dr. Sanjaya Kumar Mishra, directs that the appeals filed be listed before a Division Bench of the Principal Bench.
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The Tribunal decided the question of jurisdiction and consolidation of the appeals. It did not rule on whether the company is entitled to the interest refunds claimed.
The appellant/assessee submitted that it supplies tyres, tubes and flaps. During the relevant period, tyres and flaps attracted GST at 28%, while the GST rate on tubes was reduced to 18% with effect from November 15, 2017.
According to the company, it treated tyres, tubes and flaps as individual supplies and paid GST at their respective rates on a bona fide interpretation of the applicable provisions.
The order records that the company subsequently discharged differential tax liability for the relevant period, together with interest. The tax was paid using the available balance in the electronic credit ledger and, to the extent applicable, through the electronic cash ledger. The liability was also reported in its statutory returns.
MRF stated that, at the relevant time, there was no explicit statutory provision restricting interest to the portion of tax paid through the electronic cash ledger. Consequently, as a measure of abundant caution, it paid interest on the gross differential tax liability, including the portion discharged using input tax credit.
The company relied on the retrospective substitution of the proviso to Section 50(1) of the CGST Act by the Finance Act, 2021, effective from July 1, 2017. The order refers to Notification No. 16/2021–Central Tax dated June 1, 2021, which brought the substituted provision into force.
On the basis of that amendment, MRF sought refunds of the interest paid on the portion of its differential tax liability discharged through the electronic credit ledger.
While refunds were allowed in certain cases, the refund applications underlying the eight appeals were rejected. The company challenged those rejections before the respective appellate authorities and subsequently filed appeals before different State Benches of GSTAT.
The appeals concerned tax authorities in Maharashtra, Telangana, West Bengal, Bihar, Punjab, Karnataka, Madhya Pradesh and Uttar Pradesh.
The question placed before the Tribunal was whether MRF was entitled to a refund of interest paid on its gross GST liability to the extent that the underlying tax had been discharged through the electronic credit ledger, in light of the retrospective substitution of the proviso to Section 50(1).
Representatives of the tax authorities from Maharashtra, Punjab, Karnataka, Telangana and Bihar appeared at the virtual hearing. They acknowledged that the appeals involved an identical question of law, although they disputed the company’s entitlement to the relief sought.
The President clarified that the issue at this stage was whether the appeals involved an identical legal question requiring adjudication by the Principal Bench, including to avoid conflicting decisions by different State Benches.
The Tribunal relied on Notification No. S.O. 4219(E) dated September 17, 2025, issued under Section 109(5) of the CGST Act. The notification provides for the Principal Bench to hear cases or classes of cases pending before different State Benches where an identical question of law is involved and the GSTAT President is satisfied that such a common question exists.
The President concluded that the appeals involved an identical question of law warranting a hearing before the Principal Bench.
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