Frequency of filing refund application - GST Ready Reckoner - GST

Frequency of filing refund application As per para 11of Circular 37/11/2018 dated 15-03-2018, [ This Circular Superseded Vide Circular No. 125/44/2019-GST dated 18-11-2019 ] Filing frequency of Refunds: Various representations have been made to the Board regarding the period for which refund applications can be filed. Section 2(107) of the CGST Act defines the term tax period as the period for which the return is required to be furnished. The terms Net ITC and turnover of zero rated supply of goods/services are used in the context of the relevant period in rule 89(4) of CGST Rules. The phrase relevant period has been defined in the said sub-rule as the period for which the claim has been filed . 11.1 In many scenarios, exports may not have been made in that period in which the inputs or input services were received and input tax credit has been availed. Similarly, there may be cases where exports may have been made in a period but no input tax credit has been availed in the said period. The above referred rule, taking into account such scenarios, defines relevant period in the context of the refund claim and does not link it to a tax period. 11.2 In this regard, it is hereby clarified that the (a) Exporter , at his option, may file refund claim for one calendar month / quarter or by clubbing successive calendar months / quarters (b) The calendar month(s) / quarter(s) for which refund claim is filed, however, cannot be spread across different financial years As per circular no. Circular No.135/05/2020 - GST dated 31st March 2020 As per para 2 Bunching of refund claims across Financial Years 2.1 It may be recalled that the restriction on clubbing of tax periods across different financial years was put in vide para 11.2 of the Circular No. 37/11/2018-GST dated 15.03.2018 . The said circular was rescinded being subsumed in the Master Circular on Refunds No. 125/44/2019-GST dated 18.11.2019 and the said restriction on the clubbing of tax periods across financial years for claiming refund thus has been continued vide Paragraph 8 of the Circular No. 125/44/2019-GST dated 18.11.2019 , which is reproduced as under: 8. The applicant, at his option, may file a refund claim for a tax period or by clubbing successive tax periods. The period for which refund claim has been filed, however, cannot spread across different financial years. Registered persons having aggregate turnover of up to 1.5 crore in the preceding financial year or the current financial year opting to file FORM GSTR-1 on quarterly basis, can only apply for refund on a quarterly basis or clubbing successive quarters as aforesaid. However, refund claims under categories listed at (a), (c) and (e) in para 3 above must be filed by the applicant chronologically. This means that an applicant, after submitting a refund application under any of these categories for a certain period, shall not be subsequently allowed to file a refund claim under the same category for any previous period. This principle / limitation, however, shall not apply in cases where a fresh application is being filed pursuant to a deficiency memo having been issued earlier. 2.2 Hon ble Delhi High Court in Order dated 21.01.2020, in the case of M/s Pitambra Books Pvt Ltd. , vide para 13 of the said order has stayed the rigour of paragraph 8 of Circular No. 125/44/2019-GST dated 18.11.2019 and has also directed the Government to either open the online portal so as to enable the petitioner to file the tax refund electronically, or to accept the same manually within 4 weeks from the Order. Hon ble Delhi High Court vide para 12 of the aforesaid Order has observed that the 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. 2.3 Further, same issue has been raised in various other representations also, especially those received from the merchant exporters wherein merchant exporters have received the supplies of goods in the last quarter of a Financial Year and have made exports in the next Financial Year i.e. from April onwards. The restriction imposed vide para 8 of the master refund circular prohibits the refund of ITC accrued in such cases as well. 2.4 On perusal of the provisions under section 16(3) of the IGST Act, 2017 and section 54(3) of the CGST Act , there appears no bar in claiming refund by clubbing different months across successive Financial Years. 2.5 The issue has been examined and it has been decided to remove the restriction on clubbing of tax periods across Financial Years. Accordingly, circular No. 125/44/2019-GST dated 18.11.2019 stands modified to that extent i.e. the restriction on bunching of refund claims across financial years shall not apply. In the case of a casual taxable person and non-resident taxable person , refund of any amount, after adjusting the tax payable by the applicant out of the advance tax deposited by him at the time of registration, shall be claimed in the last return required to be furnished by him . Hence, a casual taxable person or non-resident taxable person need not file monthly or quarterly refunds and has to file refund only in their last return.