{"id":2420,"date":"2020-04-14T13:26:42","date_gmt":"2020-04-14T13:26:42","guid":{"rendered":"https:\/\/www.gstpractitioners.in\/blog\/?p=2420"},"modified":"2020-04-14T15:26:52","modified_gmt":"2020-04-14T15:26:52","slug":"cbic-issued-clarification-in-respect-of-refund-provisions-of-gst-laws","status":"publish","type":"post","link":"https:\/\/www.gstpractitioners.in\/blog\/cbic-issued-clarification-in-respect-of-refund-provisions-of-gst-laws\/","title":{"rendered":"CBIC issued Clarification in respect of Refund provisions of GST Laws"},"content":{"rendered":"
<\/span> 852<\/span><\/div>

Clarification in respect of certain challenges faced by the registered persons in implementation of provisions of GST Laws :<\/em><\/h4>\n

Circular No.136\/06\/2020-GST, dated 03.04.2020 had been issued to clarify doubts regarding relief measures taken by the Government for facilitating taxpayers in meeting the compliance requirements under various provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the \u201cCGST Act\u201d) on account of the measures taken to prevent the spread of Novel Corona Virus (COVID-19). It has been brought to the notice of the Board that certain challenges are being faced by taxpayers in adhering to the compliance requirements under various other provisions of the CGST Act which also need to be clarified.<\/p>\n

The issues raised have been examined and in order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act hereby clarifies as under :<\/p>\n

Point No.1<\/span> : An advance is received by a supplier for a Service contract which subsequently got cancelled. The supplier has issued the invoice before supply of service and paid the GST thereon. Whether he can claim refund of tax paid or is he required to adjust his\u00a0 tax\u00a0 liability\u00a0 in\u00a0 his returns ?<\/em><\/span><\/strong><\/p>\n

In case GST is paid by the supplier on advances received for a future event which got cancelled subsequently and for which invoice is issued before supply of service, the supplier is required to issue a \u201ccredit note\u201d in terms of section 34 of the CGST Act. He shall declare the details of such credit notes in the return for the month during which such credit note has been issued. The tax liability shall be adjusted in the return subject to conditions of section 34 of the CGST Act. There is no need to file a separate refund claim.
\nHowever, in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under \u201cExcess payment of tax, if any\u201d through FORM GST RFD-01.<\/p>\n

Point No.2<\/span> : <\/em>An advance is received by\u00a0\u00a0 a\u00a0\u00a0 supplier\u00a0\u00a0 for\u00a0\u00a0 a Service contract which got cancelled subsequently. The supplier\u00a0\u00a0\u00a0 has\u00a0\u00a0\u00a0 issued receipt\u00a0\u00a0 voucher\u00a0\u00a0 and paid the GST on such advance\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 received. Whether he can claim refund\u00a0 of\u00a0 tax\u00a0 paid\u00a0 on advance or he is required\u00a0 to\u00a0 adjust his tax\u00a0 liability in\u00a0 his <\/em><\/strong>returns?<\/strong><\/p>\n

In case GST is paid by the supplier on advances received for an event which got cancelled subsequently and for which no invoice\u00a0 has\u00a0 been\u00a0 issued\u00a0 in\u00a0 terms\u00a0 of\u00a0 section\u00a0 31\u00a0 (2)\u00a0 of\u00a0 the CGST\u00a0 Act,\u00a0 he\u00a0 is\u00a0 required\u00a0 to\u00a0 issue\u00a0 a\u00a0 \u201crefund\u00a0 voucher\u201d\u00a0 in terms of section 31 (3) (e) of the CGST Act read with rule 51 of the CGST Rules.
\nThe\u00a0 taxpayer\u00a0 can\u00a0 apply\u00a0 for\u00a0 refund\u00a0 of\u00a0 GST\u00a0 paid\u00a0 on\u00a0 such advances by filing FORM GST RFD-01 <\/strong>under the category \u201cRefund of excess payment of tax\u201d.<\/p>\n

Point No.3<\/span> : Goods\u00a0 supplied\u00a0 by\u00a0 a supplier\u00a0 under\u00a0 cover of\u00a0\u00a0 a\u00a0\u00a0 tax\u00a0\u00a0 invoice\u00a0\u00a0 are returned by the recipient.\u00a0 Whether\u00a0 he can\u00a0\u00a0 claim\u00a0\u00a0 refund\u00a0\u00a0 of tax\u00a0\u00a0\u00a0 paid\u00a0\u00a0\u00a0 or\u00a0\u00a0\u00a0 is\u00a0\u00a0\u00a0 he required\u00a0 to\u00a0 adjust his tax\u00a0\u00a0\u00a0 liability\u00a0\u00a0\u00a0 in\u00a0\u00a0\u00a0 his returns ?<\/em><\/strong><\/p>\n

In such a case where the goods supplied by a supplier are returned\u00a0 by\u00a0 the\u00a0 recipient\u00a0 and\u00a0 where\u00a0 tax\u00a0 invoice\u00a0 had\u00a0 been issued, the supplier\u00a0\u00a0 is required to issue a \u201ccredit note\u201d in terms of section 34 of the CGST Act. He shall declare the details of such credit notes in the return for the month during which such credit note has been issued. The tax liability shall be adjusted in the return subject to conditions of section 34 of the CGST Act. There is no need to file a separate refund claim in such a case.
\nHowever, in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under \u201cExcess payment of tax, if any\u201d through FORM GST RFD-01.<\/p>\n

Point N0.4 :<\/span> Letter of Undertaking (LUT)\u00a0\u00a0 furnished\u00a0\u00a0 for the\u00a0 purposes\u00a0 of\u00a0 zero- rated \u00a0supplies\u00a0 as\u00a0 per provisions of section 16 of\u00a0\u00a0 the\u00a0\u00a0 Integrated Goods\u00a0\u00a0\u00a0 and\u00a0\u00a0\u00a0 Services Tax\u00a0 \u00a0Act,\u00a0\u00a0 2017\u00a0\u00a0 read with\u00a0 rule\u00a0 96A\u00a0 of\u00a0 the CGST\u00a0\u00a0\u00a0\u00a0\u00a0 Rules\u00a0\u00a0\u00a0\u00a0\u00a0 has expired on 31.03.2020. Whether\u00a0 a\u00a0 registered person can still make a zero-rated\u00a0\u00a0 supply\u00a0 on such\u00a0 LUT\u00a0 and\u00a0 claim refund\u00a0 accordingly or does\u00a0 he have\u00a0 to\u00a0 make such\u00a0 supplies on payment of IGST and claim\u00a0 refund\u00a0 of\u00a0 such IGST ?<\/strong><\/em><\/p>\n

Notification\u00a0 No.\u00a0 37\/2017-Central\u00a0 Tax,\u00a0 dated\u00a0 04.10.2017, requires LUT\u00a0to\u00a0be\u00a0furnished\u00a0for\u00a0a\u00a0financial\u00a0year<\/u>. However, in\u00a0 terms\u00a0 of\u00a0 notification\u00a0 No.\u00a0 35\/2020\u00a0 Central\u00a0 Tax\u00a0 dated 03.04.2020, where the requirement under the GST Law for furnishing of any report, document, return, statement or such other\u00a0\u00a0 record\u00a0\u00a0 falls\u00a0\u00a0 during\u00a0\u00a0 between\u00a0\u00a0 the\u00a0\u00a0 period\u00a0\u00a0 from 20.03.2020\u00a0\u00a0\u00a0 to\u00a0\u00a0\u00a0 29.06.2020,\u00a0\u00a0\u00a0 has\u00a0\u00a0\u00a0 been\u00a0\u00a0\u00a0 extended\u00a0\u00a0\u00a0 till 30.06.2020.
\nTherefore,\u00a0 in\u00a0 terms\u00a0 of\u00a0 Notification\u00a0 No.\u00a0 35\/2020-Central Tax, time limit for filing of LUT for the year 2020-21 shall stand extended to 30.06.2020 and the taxpayer can continue to\u00a0 make\u00a0 the\u00a0 supply\u00a0 without\u00a0 payment\u00a0 of\u00a0 tax\u00a0 under\u00a0 LUT provided\u00a0 that\u00a0 the\u00a0 FORM\u00a0 GST\u00a0 RFD-11\u00a0 for\u00a0 2020-21\u00a0 is furnished on or before 30.06.2020. Taxpayers may quote the reference no of the LUT for the year 2019-20 in the relevant documents.<\/p>\n

Point No.5<\/span> : While\u00a0\u00a0\u00a0\u00a0 making\u00a0\u00a0\u00a0\u00a0 the payment\u00a0 to\u00a0 recipient, amount\u00a0 equivalent\u00a0 to one\u00a0\u00a0\u00a0 per\u00a0\u00a0\u00a0 cent\u00a0\u00a0\u00a0 was deducted\u00a0\u00a0 as\u00a0\u00a0 per\u00a0\u00a0 the provisions\u00a0\u00a0 of\u00a0\u00a0 section <\/strong>notification N. 35\/2020-Central\u00a0\u00a0\u00a0 Tax dated 03.04.2020?<\/strong><\/em><\/p>\n

As\u00a0\u00a0 per\u00a0\u00a0 notification\u00a0\u00a0 No.\u00a0\u00a0 35\/2020-Central\u00a0\u00a0 Tax\u00a0\u00a0 dated 03.04.2020, where the timeline for any compliance required as per sub-section (1) of section 54 of the Central Goods and\u00a0 Services\u00a0 Tax\u00a0 Act,\u00a0 2017\u00a0 falls\u00a0 during\u00a0 the\u00a0 period\u00a0 from 20.03.2020 to 29.06.2020, the same has been extended till 30.06.2020.\u00a0\u00a0 Accordingly,\u00a0\u00a0 the\u00a0\u00a0 due\u00a0\u00a0 date\u00a0\u00a0 for\u00a0\u00a0 filing\u00a0\u00a0 an application for refund falling during the said period has also been extended till 30.06.2020.<\/p>\n

Point No.6 :As per section 54 (1), a person\u00a0 is\u00a0 required\u00a0 to make\u00a0\u00a0 an\u00a0\u00a0 application before\u00a0 expiry\u00a0 of\u00a0 two years from\u00a0 the relevant\u00a0 date.\u00a0 If\u00a0 in particular\u00a0\u00a0 case, date for making an application for refund expires\u00a0 on\u00a0 31.03.2020, can such person make an application for refund before 29.07.2020?<\/em><\/strong><\/p>\n

As\u00a0\u00a0 per\u00a0\u00a0 notification\u00a0\u00a0 No.\u00a0\u00a0 35\/2020-Central\u00a0\u00a0 Tax\u00a0\u00a0 dated 03.04.2020, where the timeline for any compliance required as per sub-section (1) of section 54 of the Central Goods and\u00a0 Services\u00a0 Tax\u00a0 Act,\u00a0 2017\u00a0 falls\u00a0 during\u00a0 the\u00a0 period\u00a0 from 20.03.2020 to 29.06.2020, the same has been extended till 30.06.2020.\u00a0\u00a0 Accordingly,\u00a0\u00a0 the\u00a0\u00a0 due\u00a0\u00a0 date\u00a0\u00a0 for\u00a0\u00a0 filing\u00a0\u00a0 an application for refund falling during the said period has also been extended till 30.06.2020.<\/p>\n

Source : Cbic Circular No. 137\/07\/2020-GST<\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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