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TMI BlogClarifications on exports related refund issuesX X X X Extracts X X X X X X X X Extracts X X X X ..... efund of input tax credit shall be allowed in cases where the supplier of goods or services or both avails of drawback in respect of central tax. 2.1 This has been clarified in paragraph 8.0 of Circular No. 2-TNGST, dated 2.2.18. In the said paragraph, reference to section 54(3) (ii) of the TNGST Act is a typographical error and it should read as section 54(3) (i) of the TNGST Act . It may be noted that in the said circular reference has been made only to central tax, integrated tax, State / Union territory tax and not to customs duty leviable under the Customs Act, 1962. Therefore, a supplier availing of drawback only with respect to basic customs duty shall be eligible for refund of unutilized input tax credit of central tax / State tax / Union territory tax / integrated tax / compensation cess under the said provision. It is further clarified that refund of eligible credit on account of State tax shall be available even if the supplier of goods or services or both has availed of drawback in respect of central tax. 3. Amendment through Table 9 of GSTR-1: It has been reported that refund claims are not being processed on account of mis-matches between data contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay the tax due along with the interest as applicable within a period of fifteen days after the expiry of three months or such further period as may be allowed by the commissioner from the date of issue of the invoice for export, if the goods are not exported out of India. The time period in case of services is fifteen days after the expiry of one year or such further period as may be allowed by the Commissioner from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange. 5.1 It has been reported that the exporters have been asked to pay integrated tax where the goods have been exported but not within three months from the date of the issue of the invoice for export. In this regard, it is emphasised that exports have been zero rated under the Integrated Goods and Services Tax Act, 2017 (IGST Act) and as long as goods have actually been exported even after a period of three months, payment of integrated tax first and claiming refund at a subsequent date should not be insisted upon. In such cases, the jurisdictional Commissioner may consider granting extension of time limit for export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees. The circulars on LUT under TNGST mention that a person intending to export under LUT is required to give a self-declaration at the time of submission of LUT that he has not been prosecuted. Persons who are not eligible to export under LUT are required to export under bond. 7.2 It is clarified that this requirement is already satisfied in case of exports under LUT and asking for self-declaration with every refund claim where the exports have been made under LUT is not warranted. 8. Refund of transitional credit: Refund of unutilized input tax credit is allowed in two scenarios mentioned in sub-section (3) of section 54 of the TNGST Act. These two scenarios are zero rated supplies made without payment of tax and inverted tax structure. In sub-rule (4) and (5) of rule 89 of the TNGST Rules, the amount of refund under these scenarios is to be calculated using the formulae given in the said sub-rules. availed on inputs and input services during the relevant period other than the input tax credit availed for which refund is claimed under sub- rules (4A) or (4B) or both . It is clarifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovides that the amount of refund arising out of such claims shall be refunded in cash. Further, the first proviso to the said sub-section provides that where any claim for refund of CENVAT/TNVAT credit is fully or partially rejected, the amount so rejected shall lapse and therefore, will not be transitioned into GST. Furthermore, it should be ensured that no refund of the amount of CENVAT/TNVAT credit is granted in case the said amount has been transitioned under GST. The field formations are advised to process such refund applications accordingly. 11. Filing frequency of Refunds: Various representations have been made regarding the period for which refund applications can be filed. Section 2(107) of the TNGST 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 TNGST 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at the concessional rate is also eligible for refund on account of inverted tax structure as per the provisions of clause (ii) of the first proviso to sub-section (3) of section 54 of the TNGST Act. It may also be noted that the exporter of such goods can export the goods only under LUT / bond and cannot export on payment of integrated tax. 14. Requirement of invoices for processing of claims for refund: It has been brought to the notice of the Department that for processing of refund claims, copies of invoices and other additional information are being insisted upon by many field formations. 14.1 It was envisaged that only the specified statements would be required for processing of refund claims because the details of outward supplies and inward supplies would be available on the common portal which would be matched. Most of the other information like shipping bills details etc. would also be available because of the linkage of the common portal with the Customs system. However, because of delays in operationalizing the requisite modules on the common portal, in many cases, suppliers' invoices on the basis of which the exporter is claiming refund may not be availa ..... 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