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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 ..... JGST 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 Circular No. 37/ 11/2018-GST, dated March 15, 2018. The said circular was rescinded being subsumed in the master circular on refunds No. 125/44/2019-GST, dated March 5, 2020 and the said restriction on the clubbing of tax periods across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 March 5, 2020, which is re-produced as under : 8. The applicant, at his option, may file a refund claim for a tax period or by clubbing successive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on account of rate of tax on inputs being higher than the rate of tax on output supplies. It is noteworthy that, the input and output being the same in such cases, though attracting different tax rates at different points in time, do not get covered under the provisions of clause (ii) of sub-section (3) of section 54 of the JGST Act. It is hereby clarified that refund of accumulated ITC under clause (ii) of sub-section (3) of section 54 of the JGST Act would not be applicable in cases where the input and the output supplies are the same. 4. Change in manner of refund of tax paid on supplies other than zero- rated supplies 4.1 Circular No. 125/44/2019-GST, dated March 5, 2020, in para 3, categorizes the refund applications to be filed in F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash 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-State Tax, dated June 25, 2020, sub-rule (4A) has been inserted in rule 86 of the JGST 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, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which the cash and credit ledger has been debited for discharging the total tax liability for the relevant period for which application for refund has been filed. Such amount, shall be accordingly paid by issuance of order in Form GST RFD-06 for amount refundable in cash and Form GST PMT-03 to re-credit the amount attributable to credit as ITC in the electronic credit ledger. 5. Guidelines for refunds of input tax credit under section 54(3) 5.1 In terms of para 36 of Circular No. 125/44/2019-GST, dated March 5, 2020, the refund of ITC availed in respect of invoices not reflected in Form GSTR-2A was also admissible and copies of such invoices were required to be uploaded. However, in wake of insertion of sub-rule (4) to rule 36 of the JG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided to amend the said statement. Accordingly, annexure B of Circular No. 125/44/2019-GST, dated March 5, 2020 stands modified to that extent. 6.3 A suitably modified statement format is attached for applicants to upload the details of invoices reflecting in their Form GSTR-2A. The applicant is, in addition to details already prescribed, now required to mention HSN/SAC code which is mentioned on the inward invoices. In cases where supplier is not mandated to mention HSN/SAC code on invoice, the applicant need not mention HSN/SAC Code in respect of such an inward supply. 7. It is requested that suitable trade notices may be issued to publicize the contents of this circular. 8. Difficulty, if any, in implementation of this circular may plea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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