Unlock the intricacies of CBIC’s latest circular 197/09/2023-GST on GST refunds. Get quick answers to key questions and gain clarity on ITC, zero-rated supplies, and adjusted total turnover calculation.
The CBIC has issued circular 197/09/2023-GST, which provides clarifications on issues related to refunds. These clarifications are expected to provide much-needed clarity to taxpayers and help them to claim refunds more easily.
The summary of clarifications are provided below for easy understanding and reference.
Question 1 : Whether the refund of the accumulated ITC under section 54(3) of CGST Act shall be admissible on the basis of the input tax credit as reflected in FORM GSTR-2A or on the basis of that available as per FORM GSTR-2B of the applicant?
Clarification :
i. W.E.F 01-01-2022, ITC reflecting in GSTR 2B can be allowed as refund.
ii. If a refund claim was processed from January 2022 onwards before this circular was issued, it will not be reopened because of the clarification in this circular.
Scenario :
Exporters have voluntarily made payment of IGST along with applicable interest, in cases where goods could not be exported or payment for export of services could not be received within time frame
Question 2 : Whether subsequent to export of the goods or realization of payment in case of export of services, the said exporters are entitled to claim not only refund of unutilized input tax credit on account of export but also refund of the integrated tax and interest so paid?
Clarifications :
i. As long as goods are actually exported or payment is realized in case of export of services, even if it is beyond the time frames as prescribed, the benefit of zero-rated supplies cannot be denied to the concerned exporters.
ii. Exporters would be entitled to refund of unutilized input tax credit u/s 54(3) On actual export of the goods or on realization of payment in case of export of services.
iii. Further, exporters would be entitled to claim refund of the IGST tax so paid earlier on account of goods not being exported, or the payment not being realized for export of services, within the time frame prescribed. However, refund of the interest paid is not allowed.
Question 3 : Whether value of goods exported out of India has to be considered as per Explanation under sub-rule (4) of rule 89 of CGST Rules for the purpose of calculation of adjusted total turnover ?
Clarification : Yes. Consequent to Explanation having been inserted in sub-rule (4) of rule 89 of CGST Rules vide Notification No. 14/2022- CT dated 05.07.2022, the value of goods exported out of India to be included while calculating “adjusted total turnover” will be same as being determined as per the Explanation inserted in the said sub-rule.
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