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TMI BlogClarification on refund related issuesX X X X Extracts X X X X X X X X Extracts X X X X ..... rred to as "WBGST Act"), hereby clarifies the issues detailed hereunder: 2. Clarification in respect of refund claim by recipient of Deemed Export Supply 2.1 Representations have been received in respect of difficulties being faced by the recipients of the deemed export supplies in claiming refund of tax paid in respect of such supplies since the system is not allowing them to file refund claim under the aforesaid category unless the claimed amount is debited in the electronic credit ledger. 2.2 Para 41 of Trade Circular No. 45/2019 dated 21.11.2019 has placed a condition that the recipient of deemed export supplies for obtaining the refund of tax paid on such supplies shall submit an undertaking that he has not availed ITC on invoices f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n application for refund, the portal requires debit of the equivalent amount from the electronic credit ledger of the claimant. 2.5 As stated above, there is no restriction under 3rd proviso to Rule 89(1) of WBGST Rules, 2017 on recipient of deemed export supply, claiming refund of tax paid on such deemed export supply, on availment of ITC on the tax paid on such supply. Therefore, the para 41 of Trade Circular No. 45/2019 dated 21.11.2019 is modified to remove the restriction of non-availment of ITC by the recipient of deemed export supplies on the invoices, for which refund has been claimed by such recipient. The amended para 41 of Trade Circular No. 45/2019 dated 21.11.2019 would read as under: "41. Certain supplies of goods have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be complied with." 3. Extension of relaxation for filing refund claim in cases where zero-rated supplies has been wrongly declared in Table 3.1(a). 3.1 Para 26 of Trade Circular No. 45/2019 dated 21.11.2019 gave a clarification in relation to cases where taxpayers had inadvertently entered the details of export of services or zero-rated supplies to a Special Economic Zone Unit/Developer in table 3.1(a) instead of table 3.1(b) of FORM GSTR-3B of the relevant period and were unable to claim refund of the integrated tax paid on the same through FORM GST RFD-01A. This was because of a validation check placed on the common portal which prevented the value of refund of integrated tax/cess in FORM GST RFD-01A from being more than the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore than the aggregate amount of integrated tax/cess mentioned in the Table under columns 3.1(a), 3.1(b) and 3.1(c) of FORM GSTR-3B filed for the corresponding tax period." 4. The manner of calculation of Adjusted Total Turnover under sub-rule (4) of Rule 89 of WBGST Rules, 2017. 4.1 Doubts have been raised as to whether the restriction on turnover of zero-rated supply of goods to 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier, imposed by amendment in definition of the "Turnover of zero-rated supply of goods" vide Notification No. 443-F.T. dated 03.04.2020, would also apply for computation of "Adjusted Total Turnover" in the formula given under Rule 89(4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter State supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess" 4.5 From the examination of the above provisions, it is noticed that "Adjusted Total Turnover" includes "Turnover in a State or Union Territory", as defined in Section 2(112) of WBGST Act. As per Section 2(112), "Turnover in a State or Union Territory" includes turnover/ value of export/ zero-rated supplies of goods. The definition of "Turnover of zero-rated supply of goods" has been amended vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly Value per unit No of units supplied Turnover Turnover as per amended definition Local (Quantity 5) 200 5 1000 1000 Export (Quantity 5) 350 5 1750 1500 (1.5*5*200) The formula for calculation of refund as per Rule 89(4) is : Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷Adjusted Total Turnover Turnover of Zero-rated supply of goods (as per amended definition) = ₹ 1500 Adjusted Total Turnover= ₹ 1000 + ₹ 1500 = ₹ 2500 [and not ₹ 1000 + ₹ 1750] Net ITC = ₹ 270 Refund Amount = ₹ 1500*270 / 2500 = ₹ 162 Thus, the admissible refund amount in the instant case is ₹ 162. 5. Diff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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