Clarification in respect of certain challenges faced by the registered persons in implementation of provisions of GST Laws - GST - States - 137/07/2020-GST (GSL/GST/S.168/B.79)

CIRCULAR Chief Commissioner of State Tax, Gujarat State, Ahmedabad Circular No. 137/07/2020-GST, dated April 15, 2020. Subject : Clarification in respect of certain challenges faced by the registered persons in implementation of provisions of GST Laws Regarding Circular No. 136/06/2020-GST, dated April 10, 2020 had been issued to clarify doubts regarding relief measures taken by the Government for facilitating taxpayers in meeting the compliance requirements under various provisions of the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the GGST Act ) on account of the measures taken to prevent the spread of novel corona virus (COVID-19). It has been brought to the notice of the Chief Commissioner of State tax that certain challenges are being faced by taxpayers in adhering to the compliance requirements under various other provisions of the GGST Act which also need to be clarified. 2. The issues raised have been examined and in order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Chief Commissioner of State tax, in exercise of the powers conferred under section 168(1) of the GGST Act hereby clarifies as under : Sl. No. Issue Clarification 1. An advance is received by a supplier for a service contract which subsequently got cancelled. The supplier has issued the invoice before supply of service and paid the GST thereon. Whether he can claim refund of tax paid or is he required to adjust his tax liability in his returns ? In case GST is paid by the supplier on advances received for a future event which got cancelled subsequently and for which invoice is issued before supply of service, the supplier is required to issue a credit note in terms of section 34 of the GGST Act. He shall declare the details of such credit notes in the return for the month during which such credit note has been issued. The tax liability shall be adjusted in the return subject to conditions of section 34 of the GGST Act. There is no need to file a separate refund claim. However, in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under Excess payment of tax, if any through Form GST RFD-01. 2. An advance is received by a supplier for a service contract which got cancelled subsequently. The supplier has issued receipt voucher and paid the GST on such advance received. Whether he can claim refund of tax paid on advance or he is required to adjust his tax liability in his returns ? In case GST is paid by the supplier on advances received for an event which got cancelled subsequently and for which no invoice has been issued in terms of section 31(2) of the GGST Act, he is required to issue a refund voucher in terms of section 31(3) (e) of the GGST Act read with rule 51 of the GGST Rules. The taxpayer can apply for refund of GST paid on such advances by filing Form GST RFD-01 under the category refund of excess payment of tax . 3. Goods supplied by a supplier under cover of a tax invoice are returned by the recipient. Whether he can claim refund of tax paid or is he required to adjust his tax liability in his returns ? In such a case where the goods supplied by a supplier are returned by the recipient and where tax invoice had been issued, the supplier is required to issue a credit note in terms of section 34 of the GGST Act. He shall declare the details of such credit notes in the return for the month during which such credit note has been issued. The tax liability shall be adjusted in the return subject to conditions of section 34 of the GGST Act. There is no need to file a separate refund claim in such a case. However, in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under excess payment of tax, if any through Form GST RFD-01. 4. Letter of Undertaking (LUT) furnished for the purposes of zero-rated supplies as per provisions of section 16 of the Integrated Goods and Services Tax Act, 2017 read with rule 96A of the GGST Rules has expired on March 31, 2020. Whether a registered person can still make a zero-rated supply on such LUT and claim refund accordingly or does he have to make such supplies on payment of IGST and claim refund of such IGST ? Notification No. 37/2017-Central Tax, dated October 4, 2017*, requires LUT to be furnished for a financial year. However, in terms of Notification No. 35/2020-State Tax, dated April 9, 2020**, where the requirement under the GST Law for furnishing of any report, document, return, statement or such other record falls during between the period from March 20, 2020 to June 29, 2020, has been extended till June 30, 2020. Therefore, in terms of Notification No. 35/2020-State Tax**, time limit for filing of LUT for the year 2020-21 shall stand extended to June 30, 2020 and the taxpayer can continue to make the supply without payment of tax under LUT provided that the Form GST RFD-11 for 2020-21 is furnished on or before June 30, 2020. Taxpayers may quote the reference no of the LUT for the year 2019-20 in the relevant documents. 5. While making the payment to recipient, amount equivalent to one per cent was deducted as per the provisions of section 51 of the Gujarat Goods and Services Tax Act, 2017, i. e., Tax Deducted at Source (TDS). Whether the date of deposit of such payment has also been extended vide Notification No. 35/2020-State Tax, dated April 9, 20202 ? As per Notification No. 35/2020-State Tax, dated April 9, 2020**, where the timeline for any compliance required as per sub-section (3) of section 39 and section 51 of the Gujarat Goods and Services Tax Act, 2017 falls during the period from March 20, 2020 to June 29, 2020, the same has been extended till June 30, 2020. Accordingly, the due date for furnishing of return in Form GSTR-7 along with deposit of tax deducted for the said period has also been extended till June 30, 2020 and no interest under section 50 shall be leviable if tax deducted is deposited by June 30, 2020. 6. As per section 54(1), a person is required to make an application before expiry of two years from the relevant date. If in a particular case, date for making an application for refund expires on March 31, 2020, can such person make an application for refund before June 29, 2020 ? As per Notification No. 35/2020-State Tax, dated April 9, 2020**, where the timeline for any compliance required as per sub-section (1) of section 54 of the Gujarat Goods and Services Tax Act, 2017 falls during the period from March 20, 2020 to June 29, 2020, the same has been extended till June 30, 2020. Accordingly, the due date for filing an application for refund falling during the said period has also been extended till June 30, 2020. 3. Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the office of the Chief Commissioner of State Tax. Chief Commissioner of State Tax [No. GSL/GST/S.168/B. 79]