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TMI Blog2024 (1) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 ('CGST Act', for short) and also Circular No. 135/05/2020-GST dated 31.3.2020 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, Ext. P7 in WP(C) No.26112/2023. 3. In WP(C) No. 26112/2023, the challenge is against Ext. P13 appellate order dated 8.6.2023 setting aside the refund orders in favour of the petitioner for the period from April to September, 2021, while in WP(C) No. 20511/2023, the petitioner seeks to quash Ext .P8 appellate order issued by the 2nd respondent and also Exts. P4, P5 and P6 orders issued by the 1st respondent rejecting petitioner's refund applications for accumulated ITC for the months of May, June and March, 2020, respectively. In WP(C) No. 36699/2023, the challenge is against Ext. P17 order of the 1st respondent rejecting the aforesaid refund claim of the petitioner for the period from July, 2020 to March, 2021. 4. The petitioner is engaged in bottling of Liquefied Petroleum Gas ('LPG', for short) in cylinders for both domestic and commercial uses. On the bulk supply of LPG received by the petitioner from various refineries, the petitioner is required to pay GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of six months from the last day of the quarter in which such supply was received. (3) Subject to the provisions of subsection (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be allowed in cases other than- (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such exports; (b) refund of unutilised input tax credit under sub-section (3); (c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued; (d) refund of tax in pursuance of section 77; (e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or (f) the tax or interest borne by such other class of applicants as the Government may, on the recommendations of the Council, by notification, specify. (8-A) The Government may disburse the refund of the State tax in such manner as may be prescribed. (9) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provisions of this Act or the rules made thereunder or in any other law for the time being in force, no refund shall be made except in accordance with the provisions of sub-section (8). (10) Where any refund is due under subsection (3) to a registered person who has defaulted in furnishing any return or who i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t tax credit as provided under sub-section (3). (2) "relevant date" means- (a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,- (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or (ii) if the goods are exported by land, the date on which such goods pass the frontier; or (iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India; (b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished; (c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of- (i) receipt of payment in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India, where the supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/ Commissioners of Central Tax (All) The Principal Director Generals/ Director Generals (All) Madam/Sir, Subject: Clarification on refund related issues - Reg. Various representations have been received seeking clarification on some of the issues relating to GST refunds. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law in this regard across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "CGST Act"), hereby clarifies the issues detailed hereunder: 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (3) of section 54 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. 3. Refund of accumulated input tax credit (ITC) on account of reduction in GST Rate 3.1 It has been brought to the notice of the Board that some of the applicants are seeking refund of unutilized ITC on account of inverted duty structure where the inversion is due to change in the GST rate on the same goods. This can be explained through an illustration. An applicant trading in goods has purchased, say goods "X" attracting 18% GST. However, subsequently, the rate of GST on "X" has been reduced to, say 12%. It is being claimed that accumulation of ITC in such a case is also covered as accumulation on account of inverted duty structure and such applicants have sought refund of accumulated ITC under clause (ii) of subsecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent, in these cases, the amount of admissible refund, is paid in cash even when such payment of tax or any part thereof, has been made through ITC. 4.3.1 As this could lead to allowing unintended encashment of credit balances, this issue has been engaging attention of the Government. Accordingly, vide notification No. 16/2020-Central Tax dated 23.03.2020, subrule (4A) has been inserted in rule 86 of the CGST Rules, 2017 which reads as under: "(4A) Where a registered person has claimed refund of any amount paid as tax wrongly paid or paid in excess for which debit has been made from the electronic credit ledger, the said amount, if found admissible, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03." 4.3.2 Further, vide the same notification, sub-rule (1A) has also been inserted in rule 92 of the CGST Rules, 2017. The same is reproduced hereunder: "(1A) Where, upon examination of the application of refund of any amount paid as tax other than the refund of tax paid on zero-rated supplies or deemed export, the proper officer is satisfied that a refund under sub-section (5) of section 54 of the Act is due and pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant. Accordingly, para 36 of the circular No. 125/44/2019-GST, dated 18.11.2019 stands modified to that extent. 6. New Requirement to mention HSN/SAC in Annexure 'B' 6.1 References have also been received from the field formations that HSN wise details of goods and services are not available in FORM GSTR-2A and therefore it becomes very difficult to distinguish ITC on capital goods and/or input services out of total ITC for a relevant tax period. It has been recommended that a column relating to HSN/SAC Code should be added in the statement of invoices relating to inward supply as provided in Annexure-B of the circular No. 125/44/2019- GST dated 18.11.2019 so as to easily identify between the supplies of goods and services. 6.2 The issue has been examined and considering that such a distinction is important in view of the provisions relating to refund where refund of credit on Capital goods and/or services is not permissible in certain cases, it has been decided to amend the said statement. Accordingly, Annexure-B of the circular No. 125/44/2019-GST, dated 18.11.2019 stands modified to that extent. 6.3 A suitably modified statement format is attached for applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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