Summary of Clarification on refund related issues vide Circular No.135/05/2020 – GST dt. 31st March, 2020, explaining Bunching of Refund claims across Financial Years, Change in manner of refund of tax paid on supplies other than zero rated supplies, Guidelines for refunds of Input Tax Credit under Section 54(3) and New Requirement to mention HSN/SAC in Annexure ‘B’.

1. Bunching of Refund claims across Financial Years :-

Earlier as per Circular No. 125/44/2019

Amendment Relevant sections

Remarks

Restriction on bunching of refund claims across financial years. Removal of Restriction on bunching of refund claims across financial years. Section 16(3)(a) of IGST Act, 2017: – Refund of unutilized ITC.

Section 54(1) of CGST Act, 2017: Relevant Date for filing of Refund application

Circulars can supplant but not supplement the law. Circulars might mitigate rigours of law by granting administrative relief beyond relevant provisions of the statute, however, Central Government is not empowered to withdraw benefits or impose stricter conditions than postulated by the law.

2. Change in manner of refund of tax paid on supplies other than zero rated supplies:-

Refund Type Earlier Amendement

Relevant Rules

1. Refund of Excess payment of Taxes

2. Refund of tax paid on intra-State supply which is subsequently held to be inter State supply and vice versa;

3. Refund on account of assessment/provisional assessment/appeal/any other order;

4. Refund on account of “any other” ground or reason.

Refund claimed in  Cash Refund allowed in proportion of cash and credit ledger has been debited for discharging the total tax liability for the relevant period for which refund application is filed. 1. Sub Rule  (4A) of Rule 86 of CGST Rules 2017:-Re-credit of the debit made in electronic credit ledger through Form GST PMT-03.

2. Sub Rule (1A) to Rule 92 of CGT Rules, 2017:-Form RFD -06 for refund payment in cash and Form GST  PMT-03 for re credit to electronic credit ledger in proportion of the amount of cash and credit debited for making payment of such tax liability.

3. Guidelines for refunds of Input Tax Credit under Section 54(3) :-

Earlier as per Circular 125/44/2019-CGST

     Amendment Relevant Rule

Remarks

Refund of ITC availed in respect of invoices not reflected in FORM GSTR-2A was also admissible and copies of such invoices were required to be uploaded. Refund of ITC restricted to the extent reflected in Form GSTR-2A. Rule 36(4) of CGST Rules, 2017 : Input tax credit, the details which have not been uploaded in Form GSTR-2A, shall not exceed 10% of the eligible credit available wrt Invoices and Debit Notes as reflected in  Form GSTR-2A. Accordingly, Para 36 of the circular No. 125/44/2019-GST, dated 18.11.2019 stands modified to that extent.

4. New Requirement to mention HSN/SAC in Annexure ‘B’:-

In order to distinguish ITC on capital goods and/or input services out of total ITC for a relevant tax period, changes have been made in Annexure B by adding a column relating to HSN/SAC Code.

Such distinction is required where refund of credit on Capital goods and/or services is not permissible in certain cases.

Annexure B

Statement of invoices to be submitted with application for refund of unutilized ITC

Sr. No.
GSTIN of the Supplier
Name  of the Su pplier
Invoice Details
Categories of input supplies
Central Tax
State Tax/ Union Te rritory Tax
Inte grated Tax
Cess
Eligi ble ITC
A mount of eligible ITC
Invoice No.
Date
Value
Input/
Input Services/
Capital Goods
HSN/
SAC
Yes/
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14

In case of any queries, feel free to contact @ indirecttaxqueries@gmail.com.

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