{"id":8399,"date":"2020-05-12T17:43:30","date_gmt":"2020-05-12T12:13:30","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=8399"},"modified":"2021-02-09T14:17:48","modified_gmt":"2021-02-09T08:47:48","slug":"elucidation-on-gst-refund-issues","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/elucidation-on-gst-refund-issues\/","title":{"rendered":"Elucidation on GST Refund Issues &#8211; Recent Updates"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In order to provide clarification on GST\nrefund issues, the Central Board of Indirect Taxes and Customs went on issuing\na CGST Circular No. 135 on the 31st of March, 2020. Before that, there were a\nlot of perplexities in regard to claiming refunds under GST. By issuing a\ncircular, the CBIC has made efforts to bring coherence in the GST provisions\nimplementation part.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/elucidation-on-gst-refund-issues\/#Clustering_of_Refund_Claims_across_Different_Financial_Years\" >Clustering of Refund Claims across Different Financial Years<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/elucidation-on-gst-refund-issues\/#GST_Rate_Reduction-_Refund_of_ITC\" >GST Rate Reduction- Refund of ITC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/elucidation-on-gst-refund-issues\/#Apart_from_Zero-Rated_Supplies_Other_GST_Refunds\" >Apart from Zero-Rated Supplies, Other GST Refunds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/elucidation-on-gst-refund-issues\/#Points_covering_Refunds_of_Input_Tax_Credit_under_Section_543\" >Points covering Refunds of Input Tax Credit under Section 54(3)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/elucidation-on-gst-refund-issues\/#Need_to_Bring_Up_HSNSAC_in_Annexure-B\" >Need to Bring Up HSN\/SAC in Annexure-B<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/elucidation-on-gst-refund-issues\/#To_Wrap_Up\" >To Wrap Up<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Clustering_of_Refund_Claims_across_Different_Financial_Years\"><\/span>Clustering of Refund Claims across Different Financial Years<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Circular No. 37\/11\/2018- <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>Goods and Service Tax<\/strong><\/a> dated the 15th of March 2018, confined clustering of refunds connected with tax periods paved over against different financial years. Clubbing of tax refund claims was possible only for multiple tax periods in the same financial year. Further, on the 18th of November, 2019, a Master Circular no. 125\/2019 got issued for GST refunds through online medium, and the restrictions of a similar kind were extended.<\/li><li>This restriction has made merchant exporters pass through a lot of hardships. Let&#8217;s understand this by an example.<\/li><li>Suppose that merchant exporters have received the goods in the last quarter of any financial year and went for export in the following financial year, they were unable to claim ITC refund.<\/li><li>After the issue gets analyzed and numerous descriptions received from the taxpayers&#8217; end, CBIC eliminated these restrictions on the clustering of refund claims. From then onwards, it was no more applicable.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GST_Rate_Reduction-_Refund_of_ITC\"><\/span>GST Rate Reduction- Refund of ITC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per Section 54(3) (ii) of the <strong>CGST Act<\/strong><sup><a href=\"http:\/\/gstcouncil.gov.in\/sites\/default\/files\/CGST.pdf\"><strong>[1]<\/strong><\/a><\/sup>, claiming for the refund of ITC is a possibility only in case of credit accumulation. It is due to the fact that the rate of tax on output supplies was lower than the rate of tax on input supplies.<\/p>\n\n\n\n<p>Because of the inverted tax structure, a claim for refund of accumulated ITC can be made only if input and output supplies belong to two different classes. Under this section, ITC cannot be availed if the input and output supplies both carry the same rate and ITC accumulated due to a change in the rate of tax. Earlier, claiming for this refund was a possibility, but with the presentation of this circular, claiming for refunds due to an inverted tax structure is not possible at all.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/online-gst-return-filing-procedure-types-due-date-and-penalty\/\">GST Return Filing Procedure \u2013 Types of GST Returns, Due Date and Penalty<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Apart_from_Zero-Rated_Supplies_Other_GST_Refunds\"><\/span>Apart from Zero-Rated Supplies, Other GST Refunds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In Form GST RFD &#8211; 01, the chief circular on the GST refund has enveloped all refund applications. Let&#8217;s look at the classification other than zero-rated supplies-<\/p>\n\n\n\n<ul><li>A refund that occurs due to excess tax payment<\/li><li>Refund occurring because of the tax paid on intra-state supplies, in due course which was held as inter-state supply and vice versa<\/li><li>Refund occurring by virtue of appeal\/assessment\/provisional assessment or any other order<\/li><li>Refund on the grounds of any other cause.<\/li><\/ul>\n\n\n\n<p>Even the claims are not related to\nZero-rated supplies. Still, the refund gets settled up in cash in the current\nscenario.<\/p>\n\n\n\n<p>According to the recent notification released by CBIC on the 23rd of March, 2020, the refund of excess tax paid on supplies leaving the Zero-rated supplies will be available in the similar proportion in which cash and credit ledger got debited for tax payment and for which claiming of refund can be made later on. In Form GST RFD-06, an order will be issued for payment in the form of cash. Also, the GST officer will issue a Form GST PMT-03 for re-crediting the Input Tax Credit amount in the credit ledger.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Points_covering_Refunds_of_Input_Tax_Credit_under_Section_543\"><\/span>Points covering Refunds of Input Tax Credit under Section 54(3)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>In\nForm GSTR-2A, claim for ITR refund with reference to invoices were not\nreproduced.<\/li><li>On\nthe before-mentioned ITC, claiming a refund was acknowledged under paragraph 36\nof the GST refund master circular. As per the latest rule, only 10% of eligible\nInput Tax Credit in GSTR-2A will be a part of provisional ITC.<\/li><li>Overall,\nsince 110% of eligible ITC is reflected in GSTR-2A, it has got the permit as\nITC claim in GSTR-3B.<\/li><li> In regard to ITC refund passability, several references got received on those invoices that were unavailable in GSTR-2A of the applicant after the aforementioned rule came into existence. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Need_to_Bring_Up_HSNSAC_in_Annexure-B\"><\/span>Need to Bring Up HSN\/SAC in Annexure-B<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>All\nthe refund applicants should file a GSTR-2A copy along with an Annexure B\n(Concerned with inward invoices) at the time of filing RFD-01 for accumulated\nITC refunds. Where GSTR-2A wasn&#8217;t reflecting any invoice, but for which an\napplicant has made a claim for ITC, may get the details on board in Annexure-B.<\/li><li>GST\nofficers found that there was the unavailability of HSN-wise details in Form\nGSTR-2A, picking out the difference between input services, ITC on inputs and\ncapital goods become difficult. This circular has brought a clarification that\nHSN\/SAC code must get notified in the additional column of Annexure B. If there\nwon&#8217;t be any mandatory reason to mention HSN\/SAC in incoming invoices, then\nmentioning HSN\/SAC in Annexure B won&#8217;t be a necessary thing to do as well.<\/li><li>Most\nimportantly, a modified format with respect to this statement is available for\nthe applicants so that they can upload their invoice details reflecting in the\nGSTR-2A form.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"To_Wrap_Up\"><\/span>To Wrap Up<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Central Board of Indirect Taxes and Customs issued a Circular on the 31st of March 2020 to provide elucidation on GST Refund issues related to its online processing and promises to bring consistency in the implementation of GST provisions. We hope you might have gained a lot of insight regarding clarification on GST refund issues after giving a thorough reading to this article. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/latest-changes-in-gst-due-to-covid-19\/\">Latest Changes In GST Due To COVID 19\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In order to provide clarification on GST refund issues, the Central Board of Indirect Taxes and Customs went on issuing a CGST Circular No. 135 on the 31st of March, 2020. Before that, there were a lot of perplexities in regard to claiming refunds under GST. By issuing a circular, the CBIC has made efforts [&hellip;]<\/p>\n","protected":false},"author":19,"featured_media":8421,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16,152],"tags":[561],"acf":{"service_id":"68"},"authorName":"Margesh Rai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2024\/03\/Margesh.png","authorDescription":"With 10+ years of creative writing experience and 500+ blogs and thought leadership articles to his credit, Margesh Rai has left a significant impact in the field of content marketing. A published author and poet, Margesh Rai has experience writing for 20+ segments, such as Legal, Fintech, SAAS, Dairy, Real Estate, Hospitality, Recruitment, Sustainability, etc.","postViews":3901,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/8399"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=8399"}],"version-history":[{"count":22,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/8399\/revisions"}],"predecessor-version":[{"id":25767,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/8399\/revisions\/25767"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/8421"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=8399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=8399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=8399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}