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Manual filing and processing of refund claims on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger

Circular No.ES/276/2017-18                                                                      December 22, 2017

To: Members of the Council

Sub: Manual filing and processing of refund claims on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger.

Dear Member,

We would like to inform you that the CBEC  has issued Circular No. 24/24/2017 – GST dated 21.12.2017 regarding manual filing and processing of refund claims on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger.

It has been decided by the competent authority, on the recommendations of the Council, that the applications/documents/forms pertaining to refund claims on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger shall be filed and processed manually till further orders due to the non-availability of the refund module on the common portal,

In this regard, the Board, in exercise of its powers conferred under section 168 (1) of the Central Goods and Services Tax Act, 2017 hereby clarifies that the provisions of Circular No. 17/17/2017-GST dated 15.11.2017 shall also be applicable to the following types of refund inasmuch as they pertain to the method of filing of the refund claim and its processing which is consistent with the relevant provisions of the CGST Act, 2017 (hereafter referred to as ‘the CGST Act’) and the CGST Rules, 2017 (hereafter referred to as ‘the CGST Rules’):-

(i) Refund of unutilized input tax credit 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) of goods or services or both except those supplies which are notified by the Government on the recommendations of the Council (section 54 (3) of the CGST Act refers);

(ii) Refund of tax on the supply of goods regarded as deemed exports; and (iii) refund of balance in the electronic cash ledger.

It is clarified that refund claims in respect of zero-rated supplies and on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger shall be filed for a tax period on a monthly basis in FORM GST RFD-01A. 

In case, registered persons having aggregate turnover of up to Rs1.5 crore in the preceding financial year or the current financial year are opting to file FORM GSTR-1 quarterly, such persons shall apply for refund on a quarterly basis. Further, it is stated 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.

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. Since the date of furnishing of FORM GSTR 1 from July, 2017 onwards has been extended while the dates of furnishing of FORM GSTR 2 and FORM GSTR 3 for such period are yet to be notified, it has been decided by the competent  authority  to  sanction  refund  of  provisionally  accepted  input  tax  credit  at  this juncture.

However, the registered persons applying for refund must give an undertaking to the effect that the amount of refund sanctioned would be paid back to the Government with interest in case it is found subsequently that the requirements of clause (c) of sub-section (2) of  section 16 read  with  sub-section  (2) of  sections 42 of  the  CGST  Act  have  not  been complied with in respect of  the amount  refunded. 

This undertaking should be submitted manually along with the refund claim till the same is available in FORM RFD-01A on the common portal.

In case of refund claim arising due to inverted duty structure- Statement 1 and Statement 1A of FORM GST RFD-01A have to be filled.

As per the provisions of rule 89(2)(g) of the CGST Rules, statement 5B of  FORM GST RFD-01A  is required to be furnished for claiming refund on  supplies declared as deemed exports:-

In case of refund claim for the balance amount in the electronic cash ledger, upon filing of

FORM GST RFD-01A as per the procedure laid down in para 2.4 of Circular No. 17/17/2017-GST dated 15.11.2017, the amount of refund claimed shall get debited in the electronic cash ledger.

It is also clarified that the drawback of all taxes under GST (Central Tax, Integrated Tax, State/Union Territory Tax) should not have been availed while claiming refund of accumulated ITC under section 54(3)(ii) of the CGST Act. A declaration to this effect forms part of FORM GST RFD-01A as well.

For more information, you may kindly refer to the Circular No. 24/24/2017.

Members may kindly make a note of the above.

Thanking You,

Yours faithfully,

S. BALARAJU
EXECUTIVE DIRECTOR

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