Recent developments under GST vide circular No. 135/05/2020 for matters relating to Refunds has been summarized below
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Circular No.135/05/2020 – GST Dated 31st March, 2020
| Clarification | Substance |
| Bunching of refund claims across Financial Years | On perusal of the provisions under sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 and sub-section (3) of section 54 of the CGST Act, there appears no bar in claiming refund by clubbing different months across successive Financial Years.
The restriction on bunching of refund claims across financial years shall not apply |
| Refund of accumulated input tax credit (ITC) on account of reduction in GST Rate | 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 CGST Act.
It is hereby clarified that refund of accumulated ITC under clause (ii) of sub-section (3) of section 54 of the CGST Act would not be applicable in cases where the input and the output supplies are the same. |
| Change in manner of refund of tax paid on supplies other than zero rated supplies | Any refund of tax paid on supplies other than zero rated supplies will now be admissible proportionately in the respective original mode of payment
i.e. in cases of refund, where the tax to be refunded has been paid by debiting both electronic cash and credit ledgers (other than the refund of tax paid on zero-rated supplies or deemed export), The refund to be paid in cash and credit shall be calculated in the same proportion 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. |
| Guidelines for refunds of Input Tax Credit under Section 54(3)
|
It has been decided that the refund of accumulated ITC shall be restricted to the ITC as per those invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant. |
| New Requirement to mention HSN /SAC in Annexure ‘B’ | Statement of invoices to be submitted with application for refund of unutilized ITC shall also include HSN of Inward Supply.
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. |
Mr. Setia is a CA by Profession and expert in the field of Indirect Taxation Based in Delhi. Rich experience of over 5 year.