GST SPECIAL REFUND
FORTNIGHT FROM 31.5.2018 TO 14.6.2018 AND 2 MORE DAYS EXTENDED IN INDIA
The Goods and Services Tax
Act, 2017 came into force in India with effect from 1.7.2017.
The Central Government has
announced “Special GST Refund Fortnight” from 31.5.2018 to 14.5.2018 and the
relevant Circular is given below for ready reference:
Circular
No.
45/19/2018-GST
F. No. CBEC/20/16/4/2018-GST
Government of India Ministry
of Finance Department of Revenue
Central
Board of Indirect Taxes
and
Customs
GST Policy Wing
New Delhi, Dated the 30th May,
2018
To,
The Principal Chief Commissioners/Chief Commissioners/Principal
Commissioners/ Commissioners of Central Tax (All)
The Principal Directors General/ Directors General
(All)
Madam / Sir,
Subject: Clarifications
on refund related issues – reg.
The Board
vide
Circular No. 17/17/2017
–
GST
dated 15th November 2017, No.
24/24/2017 – GST dated 21st December 2017 and No. 37/11/2018 – GST dated 15th March,
2018 has laid down the procedure for manual filing and processing of different types of refund claims
under GST and
clarified
the exports related refund issues.
2. Representations
have been received seeking clarification on certain refund related issues. In order to clarify these
issues and with a view to ensure uniformity
in the implementation of the provisions of the law 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
(CGST Act for short) hereby clarifies the issues raised as below:
3. Claim for refund filed by an Input Service Distributor, a person paying tax under
section 10 or a non-resident
taxable person:
3.1 Doubts have been
raised in case of claims for refund
filed by an Input Service Distributor (ISD for short), a person paying
tax under section 10 of the CGST Act (composition taxpayer for short)or a non-resident taxable person in light of para 2.0 of Circular No. 24/24/2017-GST dated 21.12.2017 which mandates that the refund claim for a tax period may be filed only after filing the details in FORM GSTR-1 for
the said tax period
and that it is also to be ensured that a valid return in FORM GSTR-3B has been filed for the
last tax period before the one in
which the refund application
is being filed.
3.2 In this regard, attention is invited to sub-section (1) of section 37 of the CGST Act read with rule 59 of the Central Goods and Services Tax Rules, 2017 (CGST Rules for short)
which mandates that every registered person, other than an Input Service Distributor or a
non-resident taxable
person or a person
paying tax under
the provisions of section 10 or
section 51 or section 52, shall furnish the
details of outward supplies of goods or services or both
effected during a tax period in FORM GSTR-1. Further, as per sub-section (2) of
section 39 of the CGST Act read with rule 62 of the CGST Rules, a composition taxpayer is required to furnish the return in FORM GSTR-4; as per sub-section (4)
of section 39 of the CGST
Act read with rule 65 of the CGST Rules, an ISD is required to furnish the return in
FORM GSTR-6 and as per sub-section (5) of section 39 of the CGST Act read with rule 63
of the CGST Rules, a non-resident taxable person is required to furnish the return in FORM GSTR-5.
3.3 Thus, it is clarified that in case of a claim for refund of balance in the electronic
cash ledger filed by an ISD or a composition taxpayer; and the claim for refund of balance in the
electronic cash and/or credit ledger by a non-resident taxable person, the filing of the details in
FORM GSTR-1 and the
return in FORM
GSTR-3B is not mandatory. Instead, the return
in FORM GSTR-4 filed by a composition taxpayer, the details in FORM GSTR-6 filed by
an
ISD and the return in FORM GSTR-5 filed by
a non-resident taxable person shall be sufficient for
claiming the said
refund.
4. Application for refund of integrated tax paid on export of services and supplies
made to a Special Economic Zone developer or a Special Economic Zone unit:
4.1 It has been represented that while filing
the return in FORM GSTR-3B for
a given tax period, certain registered persons committed errors in declaring the
export of services on
payment of integrated tax or
zero rated supplies
made to a Special Economic Zone developer
or a
Special Economic Zone unit on payment of integrated tax. They have shown such supplies in the Table under column 3.1(a) instead of showing them in column 3.1(b) of
FORM GSTR-3B whilst they have shown the correct details in Table 6A or 6B of FORM GSTR-1 for the relevant tax period and duly discharged their tax liabilities. Such registered
persons are unable to file the refund application in FORM GST RFD-01A for
refund of integrated
tax
paid on the export
of services or on supplies made to a SEZ developer or a SEZ
unit on the GST common portal because of
an
in-built validation check in the system which restricts the refund amount claimed (integrated tax/cess) to the amount of integrated tax/cess
mentioned under column 3.1(b) of FORM GSTR-3B (zero rated
supplies) filed for the corresponding tax period.
4.2 In this regard, it is clarified that for the tax periods commencing from 01.07.2017 to
31.03.2018, such registered persons shall be allowed to file the refund application in FORM GST RFD-01A on the common portal subject to the
condition that the amount of
refund of integrated
tax/cess claimed shall
not be more 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.
5. Refund of unutilized input tax credit of compensation cess availed on inputs in cases
where the
final product is not subject
to
the levy of compensation cess:
5.1 Doubts have been raised whether an exporter is eligible to claim refund of unutilized
input tax credit of
compensation cess paid on inputs, where the
final product is not leviable to compensation
cess. For instance, cess is levied on coal, which is an input for
the manufacture of aluminum products, whereas cess
is
not levied on aluminum products.
5.2 In this regard, section 16(2) of the Integrated Goods and Services Tax Act, 2017
(IGST Act for short) states that, subject to the provisions of
section 17(5) of the CGST Act, credit of input tax may
be availed for making zero rated supplies. Further, as per section 8 of
the Goods and Services Tax (Compensation to States) Act, 2017, (hereafter referred to as the
Cess Act), all goods and services specified in the Schedule to the Cess Act are leviable to
cess under the Cess Act; and vide section 11 (2) of the Cess Act, section 16 of the IGST Act
is mutatis mutandis made applicable to inter-State supplies of all such goods and services.
Thus, it implies
that all supplies of such goods and services are zero rated under the Cess Act.
Moreover, as section 17(5) of the CGST Act does not restrict the availment of input tax credit of compensation cess on coal, it is clarified that a
registered person making zero rated supply of aluminum products under bond or LUT may claim refund of unutilized credit including
that of compensation cess
paid on coal.
5.3 Such registered persons may also make zero-rated supply of aluminum products on
payment of integrated tax but they cannot utilize the credit of the compensation cess paid on
coal for payment of integrated tax in view
of the proviso to section 11(2)
of the Cess Act, which allows the utilization of the input
tax
credit of cess, only for the payment of cess on the
outward supplies. Accordingly, they cannot claim refund of compensation cess in case of
zero-rated
supply on payment of integrated tax.
6. Whether bond or Letter of Undertaking (LUT)
is required in the case of zero
rated supply of exempted or non-GST goods and whether refund can be claimed by the
exporter of exempted or non-GST
goods?
6.1 As per section 16(2) of the IGST Act, credit of input tax may be availed for making
zero rated supplies,
notwithstanding that such supply is an exempt supply. Whereas, as per section 2 (47) of the CGST Act, exempt supply
includes non-taxable supply. Further, as per
section 16(3) of the IGST Act, a registered person making zero rated supply shall be eligible to claim refund when he either makes supply of goods or services or both under bond or letter of
undertaking (LUT) or makes such supply on payment
of integrated tax.
6.2 However,
in
case
of zero rated
supply of exempted
or
non-GST goods,
the
requirement for furnishing a bond or LUT cannot be insisted upon. It is thus, clarified that in respect of
refund claims on account of export of non-GST and exempted goods without payment of integrated tax; LUT/bond
is not required. Such registered persons exporting
non- GST goods shall comply
with the requirements prescribed under the existing law (i.e. Central Excise Act, 1944 or the
VAT
law of the respective
State) or under the Customs Act, 1962, if any.
6.3 Further, the exporter would be eligible for refund of unutilized input
tax credit of
central tax,
state tax, union territory tax,
integrated
tax and
compensation cess in
such cases.
7. What is the scope of the restriction imposed by rule 96(10) of the CGST Rules, regarding non-availment of the
benefit of
notification Nos. 48/2017-Central Tax dated
the 18.10.2017, 40/2017-Central Tax (Rate)
dated 23.10.2017, 41/2017-Integrated Tax
(Rate) dated 23.10.2017, 78/2017-Customs dated 13.10.2017 or 79/2017-Customs dated
13.10.2017?
7.1 Sub-rule (10) of rule 96 of the CGST Rules seeks to prevent an exporter, who is
receiving goods from suppliers availing
the benefit of certain specified notifications under
which they supply goods without
payment of tax or at reduced rate of tax, from exporting goods under payment of integrated
tax.
This is to ensure that the exporter does not utilise
the input tax credit availed on other domestic
supplies received for making the payment of integrated
tax
on export of goods.
7.2 However, the said restriction is not applicable to an exporter who has procured goods
from suppliers who have not availed the benefits of the specified notifications for making their outward supplies. Further, the said restriction is also not applicable to an exporter
who has procured goods
from suppliers who have, in turn, received goods
from
registered
persons availing the benefits of these notifications since the exporter did not directly procure these
goods without payment of
tax
or at reduced rate of tax.
7.3 Thus, the restriction under sub-rule (10) of rule 96 of the CGST Rules is only
applicable to those exporters who are directly receiving goods from those suppliers who are availing
the benefit under notification No. 48/2017-Central Tax dated the 18th October, 2017, notification No. 40/2017-Central Tax (Rate) dated the 23rd October, 2017, or notification No.
41/2017-Integrated Tax (Rate) dated the 23rd October, 2017 or notification No. 78/2017-
Customs dated
the
13th October, 2017 or notification
No.
79/2017-Customs dated
the
13th October, 2017.
7.4 Further, there might be a scenario where a manufacturer might have imported capital goods by availing the benefit of Notification No. 78/2017-Customs dated 13.10.2017 or
79/2017-Customs dated 13.10.2017. Thereafter, goods manufactured from such capital goods
may
be supplied to an exporter. It is hereby clarified that this restriction does not apply to such
inward supplies of an exporter.
8. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
9. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of
the Board.
Hindi version would follow.
(Upender Gupta) Commissioner (GST)
PRESS RELEASE
DATED 12.6.2018
Extension of Special Refund Fortnight till 16.6.2018
The Government has launched the second “Special Drive
Refund Fortnight” from 31.5.2018 to 14.6.2018.
During the first Refund Fortnight from 15th to 29th March an amount of Rs.5350 Crore was sanctioned and during this fortnight over Rs 7500 Crore has been sanctioned.
In view of
overwhelming
response from exporters and pending claims, the period of Refund fortnight is being extended
by
two more days i.e up to 16th June, 2018.
All exporters whose
refunds have
been held up on account of short payment are required to
make the
payment
of
IGST
equal
to short payment
and follow the instructions of Circular
No.12/2018-Customs dated 29.5.2018.
In IGST short payment cases, small exporters whose aggregate IGST refund amount for the period
July, 2017
to March, 2018 is up to Rs. 10 Lakhs are required to
submit self-certified copies
of proof of payment of IGST to the concerned Customs office
at
the port of export.
Others are
required to submit a certificate from a Chartered Accountant including the proof
of payment.
All GST refund claimants, whose claims are still pending, are being
encouraged to approach
their jurisdictional Tax
Authority for
disposal of their refund claims submitted on or before
30.04.2018. In case the jurisdiction (i.e. Centre or State) has not been defined for a particular
claimant, he/she can approach
either of
the jurisdictional tax authorities.
All claimants
may note the refund application in FORM GST RFD-01A will not be processed
unless a copy of the application, along with all supporting documents, is submitted to the
jurisdictional tax office. Mere online submission
is not sufficient.
All IGST refund claimants may
register on ICEGATE website, if not already
done, to check
their refund status. Customs field
formations have been
informed about the extension of the Refund
Drive. Exporters are requested to make the best of this extended drive and avail of the opportunity
to get the refunds sanctioned during this special drive. In case of any problem, exporters are advised
to approach the Commissioner of Customs /Jurisdictional Tax Authorities. The Government is committed
to clear all the remaining refund claims filed
upto 30.04.2018 are still pending.
RESULT OF REFUND FORTNIGHT
PRESS RELEASE DATED 20.6.2018
In line with the commitment of
Government to liquidate
all pending GST refunds filed
till
30th April, 2018,
the Central Board of Indirect Taxes and Customs (CBIC) has successfully concluded the second refund
extended fortnight from 31st May,
2018 to 16th June, 2018.
During the period, all field formations of CBIC and States, once again worked hard to
provide refund relief to the exporters. Special refund cells manned by
experienced staff were
put in place throughout the country. Exporter awareness campaigns using both print
media and social media were carried out so that the benefit could be extended to maximum exporters. All
field formations were tasked to go the extra mile in order to facilitate the sanctioning of refunds.
Issues which threw new challenges while sanctioning of refunds were clarified by
circulars,
advisories etc.
By the end of 16th June,2018, Rs. 6,087 crore IGST refund has been sanctioned in the
refund fortnight.
The interesting facts during the second fortnight are (i) about 1,68,191 shipping bills have been processed (ii)
IGST refund claims of about 9,293 exporters have been
sanctioned including about 3500 new exporters, whose refunds
had been held up, have got their refund sanctioned.
The amount of RFD-01A refund claims received by the Centre as on 30th April, 2018 was Rs. 9,816 crores. The target for the
Special Refund Fortnight was to dispose off this
amount. During the refund fortnight, an amount of Rs. 1,548 crores was sanctioned by the Centre and Rs. 2,290 crores by the States. This takes the amount of RFD-01A refund claims
disposed, as on 16.06.2018, by
the Centre to Rs. 10,824 crores and by the States to Rs. 7,287 crores. Thus, the total
amount of RFD-01A claims
disposed off stands at Rs. 18,111 crores.
In all, Rs 21,142 crore (IGST refunds), Rs. 9,923 crore (RFD-01A refund by CBIC) and Rs 6,997 crore (RFD-01A refund by
States) all totaling Rs 38,062 crore has been
sanctioned till 16th June, 2018. Considering the amount
of rejected claims, the total IGST disposed is Rs 23,437
Crore, RFD-01A (by CBIC) is Rs10,824
crore, RFD-01A (by States) is
Rs 7, 287 crore and total GST refund disposed
till
16th June, 2018 stands Rs 41,548 crore.
The momentum gained during this fortnight would be carried on by
all
formations where
refunds are still pending. The CBIC
is dedicated to
sanction all the legitimate refund
claims of
exporters. Efforts are being made to resolve those issues which are still pending. However, the
exporters need to ensure that the correct procedure of filing
returns, giving accurate information in Shipping Bill and submitting RFD01A application forms to the jurisdictional formations
are followed for
quick disbursal of their
refund claims.
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