2020 (11) TMI 570 - Commissioner - GST

Refund of unutilized ITC - export of Goods and Services without payment of Integrated Tax - refund rejected on the ground that the appellant had shown in return GSTR-3B the turnover of the zero-rated supply as Zero i.e. outward Zero-rated supplies are Zero and the appellant had not corrected in subsequent returns - period of October to December, 2017 - Section 54 of CGST Act - HELD THAT - The appellant has committed an error in GSTR-3B by not furnishing the export value/sale figure in proper column i.e. 3.1(b) outward taxable supplies (Zero-rated) the export value/sale figures have been furnished in wrong column i.e. 3.1(c) i.e. other outward taxable supplies (Nil rated, exempted) due to that refund claim was rejected. The appellant simply stated that they had filed GSTR-1 properly - Further, the appellant in their defence submission has not discussed/elaborated much about the amendment/correction/ rectification has been done in GSTR-1. The appellant did not file any corrected/modified GSTR-1 return of subsequent month for which the appellant was required to do. If the appellant has committed an error while submitting FORM GSTR-3B, the steps should have been taken to rectify the same. The corresponding column in the table provides the step to be followed by the appellant to rectify such error. The appellant was required to rectify such omission or incorrect particulars in the subsequent return to be furnished for the month or quarter during which such omission or incorrect particulars are occurred - there are no force in the contention of appellant. Appeal dismissed - decided against appellant.

Summary

Issues:
Refund claim rejection based on incorrect reporting in GSTR-3B.

Analysis:
The appellant filed a refund claim under Section 54 of the CGST Act for unutilized ITC on export of goods and services without payment of Integrated Tax. The claim was rejected by the adjudicating authority citing incorrect reporting in GSTR-3B, where zero-rated supplies were shown as zero. The appellant contended that the error was clerical and they had followed the prescribed procedures for filing returns and documents.

The appellant argued that they had exported goods without Integrated Tax payment and were eligible for the refund as per Section 54 of the Act. They highlighted that they had filed the refund application correctly and in accordance with the prescribed manner. The appellant emphasized that they rectified the error in their GSTR-1 return as per Circular No. 7/7/2017-GST, which allowed for corrections in GSTR-1 for errors made in GSTR-3B.

During the personal hearing, the appellant's representative reiterated the grounds of appeal and requested a decision based on the submitted documents. The Additional Commissioner observed that the appellant was engaged in exporting goods without Integrated Tax payment, leading to accumulated input tax credit. However, the refund claim was rejected due to the incorrect reporting in GSTR-3B, where zero-rated supplies were not properly categorized.

The Commissioner referred to legal provisions under Section 54(10) and Section 39(9) of the CGST Act, emphasizing the requirement to rectify errors in subsequent returns. Circulars issued by the department clarified the procedure for rectification of errors in GSTR-3B through GSTR-1 and GSTR-2. The Commissioner noted that the appellant failed to provide any reconciliation report regarding the data discrepancies.

Ultimately, the Commissioner found that the appellant's error in reporting export values in GSTR-3B led to the rejection of the refund claim. The appellant's defense of filing GSTR-1 properly was insufficient, as no corrected GSTR-1 return for subsequent months was submitted to rectify the initial error. The Commissioner concluded that the appellant did not follow the necessary steps to rectify the reporting error, leading to the dismissal of the appeal.