what is statement 3a under rule 89(4)

Manual > Refund of ITC on Account of Exports without Payment of Tax

How can i file application for refund of itc on account of exports without payment of tax on the gst portal.

To file the application for refund of ITC on account of Exports without payment of Tax on the GST Portal, perform following steps:

1. Access the https://www.gst.gov.in/ URL. The GST Home page is displayed.

2. Click the Services > Refunds > Application for Refund command.

3. The Select the refund type page is displayed.

4. Select the Refund of ITC on Export of Goods & Services without Payment of Tax option.

5. Select the Tax Period for which application has to be filed from the drop-down list.

6. Click the CREATE REFUND APPLICATION button.

7. Select Yes if you want to file a nil refund. Or else, select No.

In case of Yes:

8. Select the Declaration checkbox.

9. In the Name of Authorized Signatory drop-down list, select the name of authorized signatory.

10. Click the FILE WITH DSC or FILE WITH EVC button.

In Case of DSC:

a. Click the PROCEED button.

b. Select the certificate and click the SIGN button.

In Case of EVC:

a. Enter the OTP sent to email and mobile number of the Authorized Signatory registered at the GST Portal and click the VERIFY button.

In case of No:

8. The Refund of ITC on Export of Goods & Services without Payment of Tax page is displayed.

First you need to download the offline utility, upload details of Exports of Goods and/or services and then file refund of ITC on account of Exports of goods and services (without payment of tax).

Click the hyperlink below to know more about them.

Download Offline Utility - To download and enter details in Statement 3 for documents for which refund has to be claimed

Upload Details of Exports of goods and/ or services - To upload the CSV file with details of exports of good/ or services

Refund of ITC on Export of Goods & Services without Payment of Tax - To enter details for refund of ITC on exports of good/ or services without payment of tax

Download Offline Utility

9. Click the Download Offline Utility link.

10. Click the PROCEED button.

11. The zip file is downloaded. Right click on the zip file and select Extract All to unzip the downloaded file.

d. Statement 3 template would be downloaded. Open the excel sheet.

12. Once the template is downloaded, you need to enter the document details for which refund has to be claimed. Enter the GSTIN and “ From Return Period” and “To Return Period” in mmyyyy format for which refund has to be claimed.

13. Enter the Sr. No., Document Details, Goods/ Services, Shipping bill/ Bill of export/ Endorsed Document no. details. The document includes an invoice, a Debit note or a Credit note. Multiple Debit note or Credit note issued against invoices can also be entered in this statement.

1. EGM details are mandatory in case of goods. BRC/FIRC details must be provided in case of services. You need to enter Unique BRC/FIRC details, as separate rows in Statement 3.

2. Port Code can be 6 digits alphanumeric only. Shipping Bill No can be 3 to 7 numeric digits.

3. EGM length can be between 1 to 20 characters.

4. BRC/FIRC length can be between 3 to 30 alphanumeric characters.

5. The date of BRC/ FIRC for export of services in the Statement 3 to be uploaded can be before/ on/ after the date of document.

6. One document can have multiple BRC/FIRC numbers. User can enter multiple BRC/FIRC numbers in Statement 3.

7. Document Date cannot be prior to 1 st July 2017. Document date can be on or after 1 st July 2017.

8. EGM date can be prior to 1 st July 2017. There is no linking of EGM date with Shipping Bill date.

9. BRC/FIRC date can be prior to 1 st July 2017.

10. Shipping Bill Number is mandatory, on selection of “Goods” option.

14. Click the Validate & Calculate button.

15. The total number of records in the sheet is displayed. Click the OK button.

In case of Error:

16.1. Error is displayed in the Error column. Rectify the error.

16.2. Click the Validate & Calculate button.

16.3 Error is displayed in the Error column. Rectify the error.

16.4 Click the Validate & Calculate button.

16.5. Notice that the Error column is blank now after rectification.

17 . Click the Create File To Upload button.

18. Browse the location where you want to save the file.

19. Enter the name of the file and click the SAVE button.

20. A success message is displayed that file is created and you can now proceed to upload the file on the GST Portal. Click the OK button.

Upload Details of Exports of goods and/ or services

21. Click the link Click to upload the details of Exports of goods and/ or services .

22. Click the CLICK HERE TO UPLOAD button.

23. Browse the location where you saved the JSON file. Select the file and click the Open button.

24.1. A success message is displayed that Statement has been uploaded successfully. You can click the Download Unique Documents link to view the documents that has been uploaded successfully.

24.2. Unique documents that has been uploaded successfully are displayed.

25 . Select the Declaration checkbox.

26. Click the PROCEED button.

27. Click the VALIDATE STATEMENT button.

28.1. In case any statement is validated with error, click the Download Invalid Document link.

28.2 Invalid document excel sheet is downloaded on your machine. Open the invalid document excel sheet. Error details are displayed.

28.3 (a). I f your statement has been uploaded/validated with error, rectify the error in the JSON file and upload these statements on the GST Portal again, as per process described above.

Note : You need to upload only the error documents again by clicking the CLICK HERE TO UPLOAD button.

28.3 (b). If you don't have any error and statement has been validated, and then you want to update/delete the statement, then you would have to first delete the whole statement and upload a new statement of documents again if needed.

29. Once the statement is validated, you will get a confirmation message on screen that the statement has been submitted successfully for validation. Click the PROCEED button.

Refund of ITC on Export of Goods & Services without Payment of Tax

30. In the Table Computation of Refund to be claimed Statement-3A [rule 89(4)] : -

a. In Column (1) of Turnover of zero rated supply of goods and services (1) , enter the aggregate turnover of zero rated supply of goods and services i.e. Integrated Tax, Central Tax, State/ UT Tax and Cess.

b. In Column (2) of Adjusted total turnover , enter the aggregate adjusted total turnover i.e. Integrated Tax, Central Tax, State/ UT Tax and Cess .

c. In Column (3) of Net input tax credit, t he Net ITC in table “Computation of Refund to be claimed” is auto-populated by the system and can be edited downwards.

d . After filling the appropriate figures in the table (Statement 3A), the amount of refund will get auto populated in the column (4) “Maximum refund amount to be claimed”.

31. In the Table Amount Eligible for Refund : -

The values as computed in the Table Amount Eligible for Refund table:

In Column " Balance in Electronic Credit ledger at the end of tax period for which refund is claimed (balance remaining after return for this period is filed) (1) " amount is reflecting from Electronic Credit Ledger as at the end of the tax period, for which Refund is being claimed.

In Column " Balance in Electronic Credit ledger at the time of filing of refund application (2) " amount is reflecting from Electronic Credit Ledger as on the date of filing refund application.

Following validations is applicable for checking amount entered by taxpayer under column “Refund to be claimed”:

i. Refund amount to be claimed such that:-

a. the amount in each head is equal to or lower than the balance in each head of Electronic credit ledger;

b. the total refund amount should not exceed the “Maximum Refund amount to be claimed” in Statement 3A; and

c. the total refund amount should not exceed the amount calculated at the aggregate level (IGST+CGST+SGST) in the table “Balance in Electronic Credit Ledger at the end of tax period for which refund is claimed”

ii. Total Refund Claimed to be entered in Cess must be less than or equal to “Maximum Refund amount to be claimed” in Statement 3A.

For Example: In table “Maximum Refund amount to be claimed” in Statement 3A is 1,00,000 INR. The amount in table “Balance in Electronic Credit Ledger at the end of tax period for which refund is claimed” is (CGST=0, SGST=0, IGST=1,50,000) and aggregate amount is 1,50,000 INR. Amount available in Electronic Credit Ledger is (CGST=80,000, SGST=10,000, IGST=0). Now, the total refund to be claimed cannot exceed such that-

“Maximum Refund amount to be claimed” - 1,00,000 INR

Aggregate level of table “Balance in Electronic Credit Ledger at the end of tax period for which refund is claimed” - 1,50,000 INR

The total refund amount cannot exceed the balance available in Electronic Credit Ledger at the individual level i.e. (CGST=80,000, SGST=10,000, IGST=0)

Hence, the total refund amount claimed can be (CGST=80,000, SGST=10,000, IGST=0) and total refund amount that can be claimed is 90,000 INR.

32. You can click the hyperlink Click to view Electronic Liability Ledger to view details of Electronic Liability Ledger that displays your liabilities/ dues of Returns and other than Returns.

33. Click the GO BACK TO REFUND FORM to return to the refund application page.

34. Select the Bank Account Number from the drop-down list.

35. Under section upload Supporting Documents , you can upload supporting documents (if any).

36. Click the Delete button, in case you want to delete any document.

37. In case you have filed the bond/ undertaking (Form GST RFD-11), select I have a valid LUT number or else select I don't have a valid LUT number since I am making only exempt/nil rated supplies. In case of I have a valid LUT number , enter the Reference Number of RFD-11 filing.

Note : On selection of “I have a valid LUT number” from dropdown, a field gets available to the taxpayer for providing LUT ref number and 15 alphanumeric characters are allowed in the textbox. While on selection of “I don’t have a valid LUT number since I am making only exempt/nil rated supplies", no text box will be available and no further validations and taxpayer will be able to file the application.

38. Click the SAVE button.

Note: To view your saved application, navigate to Services > Refunds > My Saved/Filed Application command.

Application can be saved at any stage of completion for a maximum time period of 15 days. If the same is not filed within 15 days, the saved draft will be purged from the GST database.

39. Click the PREVIEW button to download the form in PDF format.

40. Form is downloaded in the PDF format.

41. Select the Declaration and Undertaking checkbox.

42. Click the SUBMIT button.

43. Click the PROCEED button.

To proceed filing refund application, taxpayer has to authenticate Aadhaar or upload e-KYC documents. To learn how to authenticate Aadhaar/upload e-KYC documents, click here

1. In case neither Aadhaar has been authenticated nor e-KYC documents are uploaded, following message will be displayed and you can click on NAVIGATE TO MY PROFILE button or click on CANCEL button

2. In case Aadhaar authentication is in progress, following message will be displayed.

3. In case e-KYC documents have been uploaded and you wish to authenticate Aadhaar, click on NAVIGATE TO MY PROFILE button or click on PROCEED TO FILE button.

44. Select the Declaration checkbox.

45. In the Name of Authorized Signatory drop-down list, select the name of authorized signatory.

46. Click the FILE WITH DSC or FILE WITH EVC button.

47. The success message is displayed and status is changed to Submitted. Application Reference Number (ARN) receipt is downloaded and also sent on your e-mail address and mobile phone number. Click the PDF to open the receipt.

The system generates an ARN and displays it in a confirmation message, indicating that the refund application has been successfully filed.

GST Portal sends the ARN to registered e-mail ID and mobile number of the registered taxpayer.

GST Portal also makes a Debit entry in the Electronic Credit Ledger for the amount claimed as refund.

Filed applications (ARNs) can be downloaded as PDF documents using the My Saved / Filed Applications option under Refunds.

Filed applications can be tracked using the Track Application Status option under Refunds.

Once the ARN is generated on filing of form RFD-01, refund application shall be assigned to refund processing officer for processing. The application will be processed and refund status shall be updated.

The disbursement is made once the concerned Tax Official processes the refund application.

48. ARN receipt is displayed.

49. Navigate to Services > Ledgers > Electronic Credit Ledger to view the d ebit entry in the Electronic Credit Ledger for the amount claimed as refund.

50. The Electronic Credit Ledger is displayed. Click the Electronic Credit Ledger link.

51. Select the From and To date using the calendar to select the period for which you want to view the transactions of Electronic Credit Ledger.

52. Click the GO button.

53. The Electronic Credit Ledger details are displayed. Notice the debit entry in the Electronic Credit Ledger for the amount claimed as refund.

Refund is very important term under the GST for the person who is eligible to claim the refund and for the GST Authority who issues the refund order. Both persons i.e. who claim the refund and who issues refund should have fully conversant with the provisions and law in regard of Refund under the GST.

A. Allowable Refunds

1. Refund of unutilized input tax credit (ITC) on account of exports without payment of tax;

2. Refund of tax paid on export of services with payment of tax;

3. Refund of unutilized ITC on account of supplies made to SEZ Unit/SEZ Developer without payment of tax;

4. Refund of tax paid on supplies made to SEZ Unit/SEZ Developer with payment of tax;

5. Refund of unutilized ITC on account of accumulation due to inverted tax structure;

6. Refund to supplier of tax paid on deemed export supplies;

7. Refund to recipient of tax paid on deemed export supplies;

8. Refund of excess balance in the electronic cash ledger;

9. Refund of excess payment of tax;

10. Refund of tax paid on intra-State supply which is subsequently held to be inter-State supply and vice versa;

11. Refund on account of assessment/provisional assessment/appeal/any other order;

12. Refund on account of “any other” ground or reason; and

13. Refund, as per section 54 (2) of the CGST Act, of tax paid on inward supplies of goods or services or both by UNO etc. notified under section 55.

B. Exceptions, Withholding and Non-Payment of Refund

Exceptions according to provisos to Section 54 (3) of the CGST Act –

> No refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:

> No refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.

Withholding of Refund under section Section 54 (10) of the CGST Act –

> Defaulted in furnishing any return;

> Defaulted in payment of any tax, interest or penalty and

> The Proper Officer is authorised to deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law.

Withholding of Refund under section Section 54 (11) of the CGST Act –

> Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine.

Withholding of Refund Casual Taxable Person or Non-Resident Taxable Person – Section 54 (13) of the CGST Act

> The amount of advance tax deposited by a casual taxable person or a non-resident taxable person under sub-section (2) of section 27, shall not be refunded unless such person has, in respect of the entire period for which the certificate of registration granted to him had remained in force, furnished all the returns required under section 39.

Non Payment of Refund – Section 54 (14) of the CGST Act

> No refund under sub-section (5) or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees. Sub-sections 5 and 6 are about application of refund claiming refund amount less than one thousand rupees. It is clarified vide circular 125/44/2019 that the limit of rupees one thousand shall be applied for each tax head separately and not cumulatively.

C. Time Period and GST Form for apply of refund by the person other than the person ( UNO etc. ) notified under section 55

> GST Form – GST Form GST RFD-01

> Time Period – Before the exipry of Two Years from the Relevant Date

> Relevant Date – Such date explained vide Para 2 of the Explanation to the Section 54 of the CGST Act. The same is reproduced as under:

(a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,—

(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or

(ii) if the goods are exported by land, the date on which such goods pass the frontier; or

(iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India;

(b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished;

(c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of—

(i) receipt of payment in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India, where the supply of services had been completed prior to the receipt of such payment; or

(ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice;

(d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction;

(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3) ( accumulation of tax due to inverted tax structure ) , the due date for furnishing of return under section 39 for the period in which such claim for refund arises;

(f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof;

(g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and

(h) in any other case, the date of payment of tax.

D. Time Period and GST Form for apply of refund by the person ( UNO etc. ) notified under section 55.

According to Section 54 (2) of the CGST Act the person (UNO etc.) notified under section 55 shall apply the refund through GST Form GST RFD-10 before the expiry of six months from the last day of the quarter in which such supply was received. Such supply means inward supply on which the tax has been paid.

E. Procedure, Processing and Sanction of Refund – Application Filed Online

At present i.e. with effect from 26-09-2019 refund procedure is fully electronic. All steps of submission and processing in regard of refund shall be undertaken electronically . The GST Policy Wing issues a circular 125/44/2019-GST by which detail set of guidelines and processing of refund to be done electronically have been laid down.

Gist of the circular 125/44/2019 is given as under:

> Form GST RFD-01 and Documents-

a) The application shall be, inter alia, filled with statements/ declarations/undertakings.

b) Documents/tax invoices shall be required for processing of the refund application be uploaded with the form.

c) A comprehensive list of documents is provided at Annexure-A ( given below at para L) of the Circular.

d) No other document needs to be provided at the stage of filing of the refund application except which are required and stated in Annexure-A.

e) Ten Attachments maximum size of 5 MB may be uploaded with the Refund Application.

f) Neither the refund application in FORM GST RFD-01 nor any of the supporting documents shall be required to be physically submitted to the office of the jurisdictional proper officer.

> Application Reference Number (ARN) and Acknowledgement –

a) The Application Reference Number (ARN) will be generated only after the applicant has completed the process of filing the refund application in FORM GST RFD-01, and has completed uploading of all the supporting documents/ undertaking.

b) The application shall be deemed to have been filed under sub-rule (2) of rule 90 of the CGST Rules on the date of generation of the said ARN.

c) The time limit of 15 days to issue an acknowledgement or a deficiency memo, as the case may be, shall be counted from the date of ARN.

d) The acknowledgement (FORM GST RFD-02) for the complete application or deficiency memo (FORM GST RFD-03) , as the case may be, would be issued electronically.

> Refund Application for a tax period or by clubbing successive tax periods-

Refund application may be filed for a tax period either monthly or quarterly. Quarterly return filers can only file refund application quarterly. The applicant may club successive tax periods with the refund application but he cannot club tax period of different financial years. For example refund application pertaining to 2018-19 can not be clubbed with refund pertaining to 2019-20.

But vide Circular No.135/05/2020 dated 31-03-2020 the restriction on bunching of refund claims across financial years shall not apply. For example Refund Application can be filed by clubbing of months of March 2019 and April 2019 and for two quarters 4 th quarter of 2018-19 and 1 st quarter 2019-20.

> Deficiency Memos

a) A Deficiency Memo shall be issued within 15 days from the date of generation of ARN.

b) Once an acknowledgement has been issued in relation to a refund application, no deficiency memo, on any ground, may be subsequently issued for the said application.

c) A fresh application would be filed after correction/rectification of deficiencies as pointed out.

d) Once an application has been submitted afresh, pursuant to a deficiency memo, the proper officer will not serve another deficiency memo with respect to the application for the same period, unless the deficiencies pointed out in the original deficiency memo remain un-rectified, either wholly or partly, or any other substantive deficiency is noticed subsequently.

e) A rectified refund application, submitted after correction of deficiencies, shall also have to be submitted within 2 years of the relevant date, as defined in the explanation after sub-section (14) of section 54 of the CGST Act.

> Provisional Refund

a) Ninety percent of provisional refund may be granted against claim for refund on account of zero rated supply of goods or services or both.

b) The provisional refund shall be issued within seven days from the date of acknowledgement through GST form GST RFD-04.

c) The proper officer may issue final order for total refund in place of provisional refund within seven days from the date of acknowledgement through GST form GST RFD-06 if the proper officer is fully satisfied about the eligibility of a refund claim on account of zero-rated supplies, and is of the opinion that no further scrutiny is required.

> Provisional Refund amount is higher than the Final Refund Amount

a) For example, consider a situation where an applicant files a refund claim of Rs.100/- on account of zero-rated supplies. The proper officer, after prima-facie examination of the application, sanctions Rs. 90 as provisional refund through FORM GST RFD-04 and the same is electronically credited to his bank account. However, on detailed examination, it appears to the proper officer that only an amount of Rs. 70 is admissible as refund to the applicant. In such cases, the proper officer shall have to issue a show cause notice to the applicant, in FORM GST RFD-08, under section 54 of the CGST Act, read with section 73 or 74 of the CGST Act, requiring the applicant to show cause as to why:

(a) the amount claimed of Rs. 30/- should not be rejected as per the relevant provisions of the law; and

(b) the amount of Rs. 20/- erroneously refunded should not be recovered under section 73 or section 74 of the CGST Act, as the case may be, along with interest and penalty, if any.

b) If the adjudicating authority decides against the applicant in respect of both points (a) and (b) above, then an amount of Rs. 70/- will have to be sanctioned in FORM GST RFD-06, and an amount of Rs. 20/-, along with interest and penalty, if any, shall be entered by the officer in the electronic liability register of the applicant through issuance of FORM GST DRC-07. Further, if the application pertains to refund of unutilized/accumulated ITC, then Rs. 30/-, i.e. the amount rejected, shall have to be re-credited to the electronic credit ledger of the applicant through FORM GST PMT-03 subject to undertaking received from the applicant to the effect that he shall not file an appeal or in case he files an appeal, the same has been finally decided against the applicant. In such cases, it may be noted that FORM GST RFD08 and FORM GST RFD-06, are to be considered as show cause notice and adjudication order respectively, under both section 54 (for rejection of refund) and section 73/74 of the CGST Act as the case may be (for recovery of erroneous refund).

> No adjustment or withholding of refund

No adjustment or withholding of refund, as provided under subsections (10) and (11) of section 54 of the CGST Act, shall be allowed in respect of the amount of refund which has been provisionally sanctioned. In cases where there is an outstanding recoverable amount due from the applicant, the proper officer, instead of granting refund on provisional basis, may process and sanction refund on final basis at the earliest and recover the amount from the amount so sanctioned.

> Disbursal of Refunds by the same Jurisdiction who sanctions the Refund and interest on Refund amount

a) The Government has now decided that that for a refund application assigned to a Central tax officer, both the sanction order (FORM GST RFD-04/06) and the corresponding payment order (FORM GST RFD-05) for the sanctioned refund amount, under all tax heads, shall be issued by the Central tax officer only. Similarly, for refund applications assigned to a State/UT tax officer, both the sanction order (FORM GST RFD-04/06) and the corresponding payment order (FORM GST RFD-05) for the sanctioned refund amount, under all tax heads, shall be issued by the State/UT tax officer only.

b) If the refund amount would have not been credited to the bank account of the Applicant within sixty days from date of receipt of application (ARN), interest @ 6% shall have to pay on the refund amount starting from the date immediately after the expiry of sixty days from the date of receipt of application (ARN) till the date of refund of such tax.

F . Guidelines for Refunds

> For refunds of unutilized Input Tax Credit pertaining to exports without payment of tax, supplies made to SEZ Unit/SEZ Developer without payment of tax and accumulation due to inverted tax structure.

a) Form GSTR-2A shall have to be uploaded with refund application for the period for which the refund is claimed.

b) The Applicant shall also upload the details of all the invoices on the basis of which input tax credit has been availed during the relevant period for which the refund is being claimed, in the format enclosed as Annexure-B ( given below at para L ) .

c) Self-certified copies of invoices which are declared as eligible for ITC in Annexure – B, but which are not populated in FORM GSTR-2A, shall be uploaded by the applicant along with the refund application. I feel this requirement to upload invoices which are not found in 2A, has become infructuous because refund shall be granted only against those invoices which had been available in 2A as per clarification in circular 135/5/2020 but till date this requirement has not been modified/deleted.

d) Valuation of Turnover of Zero Rated Supply of Goods has been restricted to maximum up to 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier. Vide Notification No.16/2020 clause (C) of rule 89 (4) has been replaced with followings:

“(C) “Turnover of zero-rated supply of goods” means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking or

the value which is 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier, whichever is less, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both ;‟.

Circular 147/2020 clarifies that “Turnover of zero-rated supply of goods” determined according to Notification No.16/2020 shall be same for the purpose of “Adjusted Total Turnover” Example as given in the circular is reproduced as under:

Net admissible ITC = Rs. 270

The formula for calculation of refund as per Rule 89(4) is:

Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷Adjusted Total Turnover Turnover of Zero-rated supply of goods (as per amended definition) = Rs. 1500

Adjusted Total Turnover= Rs. 1000 + Rs. 1500 = Rs. 2500 [and not Rs. 1000 + Rs. 1750]

Net ITC = Rs. 270

Refund Amount = Rs. 1500/2500*270 = Rs. 162

e) The proper officer shall not insist on the submission of an invoice (either original or duplicate) the details of which are available in FORM GSTR-2A.

> For refund of tax paid on deemed exports

The third proviso to rule 89(1) of the CGST Rules allows either the recipient or the supplier to apply for refund of tax paid on such deemed export supplies.

Notification 49/2017 requires following evidences in the case of refund pertaining to Deemed Exports

b) Acknowledgment by the jurisdictional Tax officer of the Advance Authorisation holder or Export Promotion Capital Goods Authorisation holder, as the case may be, that the said deemed export supplies have been received by the said Advance Authorisation or Export Promotion Capital Goods Authorisation holder, or a copy of the tax invoice under which such supplies have been made by the supplier, duly signed by the recipient Export Oriented Unit that said deemed export supplies have been received by it.

c) An undertaking by the recipient of deemed export supplies that no input tax credit on such supplies has been availed of by him and he shall not claim the refund in respect of such supplies and the supplier may claim the refund.

d) In case the refund is filed by the recipient of deemed export supplies, an undertaking shall have to be furnished by him stating that refund has been claimed only for those invoices which have been detailed in statement 5B of GST RFD-01 for the tax period for which refund is being claimed and the amount does not exceed the amount of input tax credit availed in the valid return filed for the said tax period. The recipient shall also be required to declare that the supplier has not claimed refund with respect to the said supplies.

> Refund of TDS/TCS deposited in excess

a) Where tax so deducted or collected is deposited under the wrong head (e.g. an amount deducted as Central tax is deposited as Integrated tax/State tax), thereby creating excess balance in the cash ledger of the deductor or the collector as the case may be. It is clarified that such excess balance may be claimed by the tax deductor or the collector as the excess balance in electronic cash ledger.

b) In case where tax deducted or collected in excess is also paid while discharging the liability in FORM GSTR 7 or FORM GSTR 8, as the case may be, and the said amount has been credited to the electronic cash ledger of the deductee, the deductee can adjust the same while discharging his output liability or he can claim refund of the same under the category “refund of excess balance in the electronic cash ledger.

> Refund of Integrated Tax paid on Exports

The refund of Integrated tax paid on goods exported out of India is governed by rule 96 of the CGST Rules. The shipping bill filed by an exporter is deemed to be an application for refund in such cases, but the same is deemed to have been filed only when the export manifest or export report is filed and the applicant has filed the return in FORM GSTR-3B for the relevant period duly indicating the integrated tax paid on goods exported in Table 3.1(b) of FORM-GSTR-3B . In addition, the exporter is expected to furnish the details of the exported goods in Table 6A of FORM GSTR-1 of the relevant period. Only where the common portal is able to validate the consistency of the details so entered by the applicant, the relevant information regarding the refund claim is forwarded to Customs Systems. Upon receipt of the information from the common portal regarding furnishing of these details, the Customs Systems processes the claim for refund and an amount equal to the Integrated tax paid in respect of such export is electronically credited to the bank account of the applicant.

Clarifications in case of Mismatch that zero rated supplies inadvertently declared in table 3.1(a) of GSTR-3B in place of table 3.1(b) of GSTR-3B.

The clarification has been provided in circular 147/2021 read with circular 125/2019 that for the tax periods commencing from 01.07.2017 to 31.03.2021 , such registered persons shall be allowed to file the refund application in FORM GST RFD-01 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.”

G. Clarifications on issues related to making zero-rated supplies

a) Export of goods have been made before furnishing of LUT Bond.

In this regard, it is emphasized that the substantive benefits of zero rating may not be denied where it has been established that exports in terms of the relevant provisions have been made. In such cases the delay in furnishing of LUT may be condoned and the facility for export under LUT may be allowed on ex post facto basis taking into account the facts and circumstances of each case.

b) The Exporter would be liable to pay the tax due along with the interest as applicable within a period of fifteen days after the expiry of three months or such further period as may be allowed by the Commissioner from the date of issue of the invoice for export, if the goods are not exported out of India. The time period in case of services is fifteen days after the expiry of one year or such further period as may be allowed by the Commissioner from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.

It is emphasized that exports have been zero rated under the IGST Act and as long as goods have actually been exported even after a period of three months, payment of Integrated tax first and claiming refund at a subsequent date should not be insisted upon . In such cases, the jurisdictional Commissioner may consider granting extension of time limit for export as provided in the said sub-rule on post facto basis keeping in view the facts and circumstances of each case.

c) Where the value declared in the tax invoice is different from the export value declared in the corresponding shipping bill under the Customs Act, the lower of the two values should be taken into account while calculating the eligible amount of refund.

d) It is clarified that insistence on proof of realization of export proceeds for processing of refund claims related to export of goods has not been envisaged in the law and should not be insisted upon.

e) It is 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.

f) Rule 96B of CGST Rules has been inserted vide notification no.16/2020 –GST dated 23-03-2020 to recover the refund where export proceeds not realised within stipulated time.

H. Clarification on calculation of refund amount for claims of refund of accumulated ITC on account of inverted tax structure

It is clarified that while processing the refund of unutilized ITC on account of inverted tax structure the Tax Authorities cannot deny refund of ITC of GST paid on those inputs which are procured at equal or lower rate of GST than the rate of GST on outward supply. For example multiple inputs such as inputs @ 5% and inputs @ 18% are used for outward supply which gst rate is 12%. While computing the refund both inputs i.e. rate of 5% and rate of 18% will be considered.

Vide Circular 135/05/2020 dated 31-03-2020 has been clarified that refund shall not be allowed where supplies of inward and outward are same. This is the case where rate of GST for item X was 18% but the rate on such item has been reduced to 12%. On such case refund can not be claimed.

I. Clarifications in regard of Input Tax Credit

a) Supplies for export at concessional rate 0.5% and 0.1% respectively. It is clarified that the exporter will be eligible to take credit of the tax @ 0.05% / 0.1% paid by him. The supplier who supplies goods at the concessional rate is also eligible for refund on account of inverted tax structure.

b) It is clarified that the input tax credit of invoices issued in August, 2019, “availed” in September, 2019 cannot be excluded from the calculation of the refund amount for the month of September, 2019.

c) It is clarified that the ITC of the GST paid on inputs, including inward supplies of stores and spares, packing materials etc., shall be available as ITC as long as these inputs are used for the purpose of the business and/or for effecting taxable supplies, including zero-rated supplies, and the ITC for such inputs is not restricted under section 17(5) of the CGST Act. Further, capital goods have been clearly defined in section 2(19) of the CGST Act as goods whose value has been capitalized in the books of account and which are used or intended to be used in the course or furtherance of business. Stores and spares, the expenditure on which has been charged as a revenue expense in the books of account, cannot be held to be capital goods.

J. Clarifications vide Circular 135/05/2020 dated 31-03-2020

1. Refund pertaining to period of different financial years – Restriction on bunching of refund claims across financial years shall not apply. For example Refund Application can be filed by clubbing of months of March 2019 and April 2019 and for two difference quarters of different years say 4 th quarter of 2018-19 and 1 st quarter 2019-20.

2. Refund of accumulated input tax credit (ITC) on account of reduction in GST Rate – It is 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. For example An applicant trading in goods has purchased, say goods “X” attracting 18% GST. However, subsequently, the rate of GST on “X” has been reduced to, say 12%. Accumulation of ITC on such case shall not be applicable for the purpose of refund because of the input and output supplies are same.

3. Change in manner of refund of tax paid on supplies other than zero rated supplies – Mode of refund in following cases shall be the same in which the same had been paid. If payment of tax had been made through after adjustment of input tax credit then refund if granted, shall be paid by re-credited to the electronic credit ledger. If the amount to be refunded had been paid in cash then same shall be refunded in cash form. If the amount to be refunded partly in cash and partly by adjusted input tax credit then the same shall be refunded proportionately in cash and re-credited to the credit ledger. Such types of refunds are as under:

3.1 Refund of excess payment of tax

3.2 Refund of tax paid on intra-State supply which is subsequently held to be inter-State supply and vice versa;

3.3 Refund on account of assessment/provisional assessment/appeal/any other order;

3.4 Refund on account of “any other” ground or reason.

4. Guidelines for refunds of Input Tax Credit under Section 54(3) – While consider rule 36(4) inserted vide notification 49/2019-GST dated 09- 10-2019 , 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. Accordingly, para 36 of the circular No. 125/44/2019-GST, dated 18.11.2019 stands modified to that extent.

5. New Requirement to mention HSN/SAC in Annexure ‘B’ – The Refund Applicant shall be required to mention HSN/SAC code which is mentioned on the inward invoices. 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.

Modified format of Annexure “B” has been provided as below.

K . The Government has issued Advisory: Tracking GST Refund Application Status on the GST Portal and PFMS portal. To read this advisory you may click on following link.

https://taxguru.in/goods-and-service-tax/tracking-gst-refund-application-status-gst-portal- pfms-portal.html

L. Annexures “A” and “B” appended to circular 125/44/2019

List of all statements/declarations/undertakings/certificates and other supporting documents to be provided along with the refund application

Statement of invoices to be submitted with application for refund of unutilized ITC

Relevant Sections and Rules in regard of Refund

N. List of Circulars issued till date in regard of Refund Issues

To reach to me for any suggestion, rectification, amendment and/or further clarification in regard of this article my email address is [email protected] .

Thanks, sir. This analysis provides a current overview of the refund process under the GST regime as of March 12, 2021. It covers the various scenarios in which refunds are permitted, the documentation and information required to apply for a refund, and the formula used to calculate refund amounts. This detailed analysis is helpful for those seeking to understand the intricacies of GST refunds.

Sir, There is a credit balance in our Electronic Ledger. Can we apply for the Refund?

Sir, Our GST number is active and we want to continue with this number. But there is credit balance in Electronic Ledger. Please tell us whether we can apply for the Refund and what are the documents require.

Sir, We are based in state “A” registered with Centre (CGST). We had an order for state “B” and the same was supplied from state “C” (bill-To-Ship). Then there was an issue in respect of E-Way bill in state “B”. The issue was adjudicated and we paid through DRC 03 (IGST + penalty). Now, JC-Commercial Taxes (Appeals), state “B” passed an order in our favour and directed the respondent to refund the IGST and penalty. No we applied for refund in state “A” (CGST) but it was rejected as they were not respondents and told us to file for refund with the SGST, “B”, as they were the respondents and passed the original order. Any advise or suggestion in this regard is highly appreciated.

Hi mahajan sir, my client is started running hallmark services business, he want refund on hallmark machine purchase by him GST Rs. 289831/- Total machine value 19000000/-, So can he claim refund in gst regime?

As far as the refund in GST is concerned, it is within 2 years from the date of relevant period. But there is favaourable judgement in VAT regime in the case of M/S. RK knit. In that period, we have to file Form W to get refund for zero rated sales within 180 days from the date of export. but the dealer has claimed it after 180 days and rejected by the assessing officer. The Madras High court ordered to refund the belated claim because the dealer has claimed the ITC in the monthly returns within prescribed period and hence the eligible ITC can be refunded eventhough it is claimed belatedly. The High court judgement is as follows: [2015] 84 VST 521 (Mad) [IN THE MADRAS HIGH COURT]

R. K. Knits V. Assistant Commissioner (CT), Adyar II Assessment Circle, Chennai and others MRS. Chitra Venkataraman J. November 24,2011 HF ♦ Assessee, including dealer (Registered or Unregistered) W. P. Nos. 2783, W. P. Nos. 2784 of 2010 decided on November 24,2011 V. Sundareswaran for the petitioner S. Kanmani Annamalai, Government Advocate (Taxes), for the respondents

Cases referred to :

————————————————– ORDER MRS. CHITRA VENKATARAMAN J.—In both the writ petitions, the peti- tioner herein has sought for the issue of a writ of certiorarified mandamus to quash the proceedings dated March 30, 2009, rejecting the refund of input-tax credit on the purchase of the goods used for the manufacture of the goods which are exported to the foreign countries. The respondent rejected the claim on the ground that form W was filed belatedly and was Page No: 522 in violation of section 19(18) of the Tamil Nadu Value Added Tax Act, 2006 read with rule 10(10)(b) of the Tamil Nadu Value Added Tax Rules, 2007. The petitioner states that during 2006-07 and 2007-08, it purchased raw materials locally form registered dealers and used the same for manu- facture of cotton knitted fabrics. These were exported to foreign countries. Under section 18 of the Tamil Nadu Value Added Tax Act, 2006, such export sales are treated as zero rating sales. As per section 19(17) of the said Act, if the input-tax credit determined by the assessing authority for a year exceeds the tax liability for that year, the excess may be adjusted against any outstanding tax due from the dealer. Section 19(18) provides for the excess input-tax credit to be carried forward to the next year or refunded in the manner as prescribed in the returns filed in form I. The petitioner disclosed the amount of input-tax credit, to which the petitioner was entitled to as per section 19 of the Act and claimed refund from time to time. The petitioner states that if the input-tax paid was more than the output tax payable, it carried forward the credit from time to time in each of the monthly returns filed under form I. It is stated that till this date, the returns have not been, in any manner, rejected. As per the provisions of the Act, the total amount of input-tax credit to be refunded as per section 19(18) of the Act comes to Rs. 32,00,151.30. The petitioner states that it approached the respondent in this regard. It however stated that in respect of zero rate tax, the assessee’s refund would be ordered only on filing of form W. Thereupon, the petitioner filed form W for the period January, 2007 to August, 2007, on August 12, 2008. The respondent, however, accepted the claim for the period January, 2007 to March, 2007 and rejected form W for the rest of the period and thereby passed the order. The petitioner contends that as per the provisions of the Act, particularly section 18(1), (2) and (3) read with rule 11(2), input-tax credit could be claimed by the exporter either on adjustment of the output tax payable from local or inter-State sale and in the event of there being no local or inter-State sale for an exporter, the assessee could file a refund claim before the officer, which should be disposed of by the assessing officer within ninety days. The petitioner states that the assessee could claim adjustment/refund even without going in for filing of form W, but in the monthly returns in form I. Thus the claim of the respondent that the petitioner had not filed the refund claim within 180 days form the date of accrual of the credit is contrary to the provisions contained in section 18 of the Act. Page No: 523 The petitioner states that the actual claim of refund for the period Jan- uary to March, 2007 comes to Rs. 11,69,954.36 and that the respondent had passed the impugned order granting the relief to an extent of Rs. 5,57,807. For the period April, 2007 to August, 2007, the input-tax credit comes to Rs. 20,30,297. Considering the fact that the petitioner had given the details of input-tax credit in form I and that the returns have not been, in any manner, rejected, there being no other sales on adjustment too, the res- pondents should have passed an order granting refund as claimed by the petitioner. On notice, the respondents have filed a counter-affidavit, wherein, it is stated that as per section 18(3) of the Tamil Nadu Value Added Tax Act, the claim of refund for input-tax credit in respect of zero rated sales should be made within 180 days from the date of making zero rate sales, failing which, the input-tax credit would lapse. As far as the exercise referred to under section 19(18) is concerned, no time-limit has been prescribed, except section 19(11) stating that the claim should be made before the end of the financial year or before ninety days from the date of purchase, whichever is later. Referring to rule 10(10)(b), the counter-affidavit states that if there is an excess input-tax credit available, the same has to be con- sidered in the assessment as whether to carry forward or refund the same and only on the basis of the assessment order, a refund order would be issued. In respect of the zero rate sales, the refund of excess input-tax credit is not dependent on the assessment being made by the end of the year, nor has it provided for carrying forward of excess input-tax credit. Considering the fact that the petitioner has claimed 100 per cent. export turnover, the claim of the petitioner now made is beyond the statutory time of 180 days from the date of credit of input-tax credit. In the absence of any particulars, it would not be justifiable for the assessee to claim refund. In any event, considering the time-limit fixed under the Act, the petitioner’s prayer could not be granted. It is seen that the first respondent herein passed an order on March 30, 2009, rejecting the claim of the assessee, on the ground that the claim was made beyond the period of 180 days, that the assessee had not filed any objection to the notice issued dated September 19, 2008. As far as the present case is concerned, admittedly, the petitioner’s turnover relates to an export turnover attracting zero rate and there are no other taxable sales effected locally or inter-State, as per section 18 of the Tamil Nadu Value Added Tax Act. Section 19 of the said Act deals with input-tax credit. As per sub-section (10) to section 19, the registered dealer could claim input- tax credit subject to the compliance of the conditions therein and sub- Page No: 524 section (11) states, where the registered dealer fails to claim input-tax credit in respect of any transaction of taxable purchase in any month, he could make the claim before the end of the financial year or before 90 days from the date of purchase, whichever is later. Rule 10 of the Tamil Nadu Value Added Tax Rules provides for the manner of claim on the input-tax credit. Rule 10 (10)(a) provides for carrying over of the excess input-tax credit of a month. Sub-rule (b) states, in case where the input-tax credit as determined by the officer for any registered dealer, for a year, exceeds the tax liability for that year, it may be adjusted as against any arrears of tax or any other amount due from him. If there are no arrears under the Act or after the adjustment, there is still an excess of input-tax credit, the officer has to serve a notice in form P, which is the notice of assessment and refund order, upon the dealer. As far as the present case is concerned, the Revenue does not deny, as a matter of fact, that the petitioner is an 100 per cent. export unit; hence, entitled to claim refund of input-tax credit. The only claim of the Revenue herein is that, in so making the claim, the peti- tioner filed form W as per rule 11(2), which is a specific provision on a refund claim. A perusal of rule 11 shows that the officer has to issue the refund of amount as specified in form P, within ninety days from the date of service of the said form, failing which, the officer has to pay the interest at the prescribed rate. As per sub-rule (2) to rule 11, the refund claim under form W is applicable to cases where a dealer claims refund under section 18(1) along with copies of invoices or bills of related purchases and the claim should be made within 180 days from the date of accrual of the said claim. As already pointed out, section 18 is the applicable provision for zero rate sales. On the premise that the assessee’s case falls for consideration under section 18(1) of the Act, the claim is now sought to be rejected on the ground that the claim had not been made within 180 days. A reading of the provisions thus makes clear two aspects: one as regards the filing of form W within a period of 180 days from the date of accrual of the claim that the officer should pass an order within ninety days from the date of service of the said form, failing which, the assessee would be entitled to interest, which is provided for under the provisions of the Act. A reading of the counter-affidavit filed in this case shows the admitted fact that the assessee has been making a claim in terms of rule 10(10) in its monthly returns and there is no denial of the fact that the claim had been made within the time as specified under the Act. Even if one has to invoke section 18(1) of the Tamil Nadu Value Added Tax Act for making an appli- cation within 180 days, there is no denial of the fact that the returns filed in form I were within the period of 180 days, as had been prescribed under Page No: 525 section 18(1). Thus, whether one goes by section 18 or goes by section 19 of the Tamil Nadu Value Added Tax Act, the fact remains that the assessee had been prompt enough to make its claim for refund in its monthly returns as regards the input-tax credit, a fact which cannot be overlooked by the officer, to say that by reason of form W filed belatedly, the assessee is not entitled to have the refund passed. 0n the specific query thus made to the Revenue as to whether the monthly returns have not been taken up for consideration, it is informed that as of today, the Revenue is yet to take up the monthly returns for assessment. Section 22 prescribes the procedure laid down under the Act for the pur- pose of passing an order on the returns filed. Sub-section (1) of section 22 states that the assessment in respect of a dealer shall be on the basis of a return submitted in the prescribed manner within the prescribed period. Sub-section (2) states that where the returns are accompanied by proof of payment of tax and the documents prescribed, the officer shall accept the returns and pass an assessment order thereon. The selection by the Commissioner for detailed scrutiny is provided under sub-section (3). As far as the present proceedings are concerned, given the fact that the asses- see had made its claim in its monthly returns and the same had been done in accordance with the provisions of the Act without any delay and on the basis of the procedure given under section 22 of the Act, it stands to reason that the first respondent should have taken up the said returns for consi- deration as per section 22(2), and in that event, the claim of the assessee made in its monthly returns, merit consideration as per rule 10(10)(a) and (b). In the face of the admitted fact as to the filing of form I remaining un- disputed, I do not find any justification in the contention of the respon- dents herein that form W filed beyond 180 days resulted in the rejection of the refund claim. In the light of the fact that the provisions on input-tax credit is a beneficial provision under the Act and that the provisions of the Act also contemplate filing of monthly returns and that a claim could be made therein too by giving necessary details along with the input-tax credit refund claim, the proper course herein for the first respondent would be to take up the assessment expeditiously to consider the claim and pass orders accordingly. With the above observation, the writ petitions are allowed and the orders passed rejecting the claim of the petitioner, stands set aside. It is hereby made clear that the claim of the petitioner, hence, has to be worked out in terms of section 22 of the Act as regards the claim made under form I. Connected M. P. Nos. 1 and 1 of 2010 stand closed. No costs. Page No: 526

Refund to be claimed should be according to GSTR 2B or GSTR 2A for the period April 2021??

Excellant article

Can we file refund application for the period of July 2017 to March 2018?

As 2 years has been passed as per GST Law Provisions.

Sir i have 1 BRC no again 2 invoices, but in statement 3, asking for different two diffrent BRC. What should i do?

Practical problem. Ask GST Grievance,

Very nice article on GST Refund. The author has put in a lot of efforts.

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Under Goods and Service Tax (“ GST ”), refund is admissible on various grounds. Refund application is filed in form GST RFD-01 and different supporting documents are required to be filed along with refund application for different type of refund applications. Any deviation in supporting documents can lead to rejection of a refund application.

Refund application is filed in different scenarios such as:

For every refund application, CBIC has specified a different set of documents.

Where refund application is filed for accumulated ITC on account of export of goods or services without payment of taxes, GST RF-01 should be accompanied with a statement containing details of Export invoices along with shipping Bill Number or BIRC Certificate.

In this article, we will carry out a detailed discussion about such statement:

A. Requirement of Statement 3 & 3A in GST RFD-01

As per Rule 89(2)(b) & (c) of CGST Rules , 2017 read with Circular No. 125/44/2019 – GST dated 18th November, 2019, , where refund application is filed to claim refund of accumulated ITC on account of export of goods or services without payment of taxes, in such case, alongwith GST RFD-01, following document is required to be attached:

B. How Statement-3 & 3A is prepared

Post login at GST Portal, when a new refund application is created at “Services>Refunds>Application for Refund> Refund of ITC on Export of Goods & Services without Payment of Tax”, the system will provide a offline utility of Statement 3.

3. Important Points while filing Statement-3 & 3A for GST Refund

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

Takeaways from 48th GST Council Meetings

Revised procedure of granting igst refund to risky exporters, gst on liquidated damages, compensation and penalty arising out of breach of contract, etc., no gst on ocean freight under reverse charge mechanism on cif contract , clarification on various issues related to gst| circular no. 172/04/2022-gst, related post.

In the 48th GST Council meeting, the GST council suggested changes in GST rates of certain products, clarified GST rates applicable, decriminalization of certain offenses under GST, rationalization of GST provisions, etc.

CBIC has issued a detailed instruction on Revised procedure of granting IGST Refund to Risky Exporters. The board has made changes in the SOP prescribed earlier vide Instructions No. 04/2022-GST dated 28th November 2022.

GST on liquidated damages, compensation and penalty arising out of breach of contract

Performance is the essence of a contract. Liquidated damages cannot be said to be a consideration received for tolerating the breach or non-performance of the contract.

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(1) Any person, except the persons covered under notification issued under section 55, claiming refund of any tax, interest, penalty, fees or any other amount paid by him, other than refund of integrated tax paid on goods exported out of India, may file subject to the provisions of rule 10B an application electronically in FORM GST RFD 01 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner: (Refer Note 12)

Provided that any claim for refund relating to balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49 may be made through the return furnished for the relevant tax period in FORM GSTR 3 or FORM GSTR 4 or FORM GSTR 7 , as the case may be:

Provided further that in respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application for refund shall be filed by the–

(a) supplier of goods after such goods have been admitted in full in the Special Economic Zone for authorised operations, as endorsed by the specified officer of the Zone;

(b) supplier of services along with such evidence regarding receipt of services for authorised operations as endorsed by the specified officer of the Zone:

Provided also that in respect of supplies regarded as deemed exports, the application shall be filed by the recipient of deemed export supplies: (Refer Note 2)

Provided also that in respect of supplies regarded as deemed exports, the application may be filed by,-

(a) the recipient of deemed export supplies; or

(b) the supplier of deemed export supplies in cases where the recipient does not avail of input tax credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund.

Provided also that refund of any amount, after adjusting the tax payable by the applicant out of the advance tax deposited by him under section 27 at the time of registration, shall be claimed in the last return required to be furnished by him.

(1A) Any person, claiming refund under section 77 of the Act of any tax paid by him, in respect of a transaction considered by him to be an intra-State supply, which is subsequently held to be an inter-State supply, may, before the expiry of a period of two years from the date of payment of the tax on the inter-State supply, file an application electronically in FORM GST RFD-01 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner:

Provided that the said application may, as regard to any payment of tax on inter-State supply before coming into force of this sub-rule, be filed before the expiry of a period of two years from the date on which this sub-rule comes into force. (Refer Note 13)

(2) The application under sub-rule (1) shall be accompanied by any of the following documentary evidences in Annexure 1 in Form GST RFD 01 , as applicable, to establish that a refund is due to the applicant, namely:-

(a) the reference number of the order and a copy of the order passed by the proper officer or an appellate authority or Appellate Tribunal or court resulting in such refund or reference number of the payment of the amount specified in sub-section (6) of section 107 and sub-section (8) of section 112 claimed as refund;

(b) a statement containing the number and date of shipping bills or bills of export and the number and the date of the relevant export invoices, in a case where the refund is on account of export of goods;

(c) a statement containing the number and date of invoices and the relevant Bank Realisation Certificates or Foreign Inward Remittance Certificates, as the case may be, in a case where the refund is on account of the export of services;

(d) a statement containing the number and date of invoices as provided in rule 46 along with the evidence regarding the endorsement specified in the second proviso to sub-rule (1) in the case of the supply of goods made to a Special Economic Zone unit or a Special Economic Zone developer;

(e) a statement containing the number and date of invoices, the evidence regarding the endorsement specified in the second proviso to sub-rule (1) and the details of payment, along with the proof thereof, made by the recipient to the supplier for authorised operations as defined under the Special Economic Zone Act, 2005, in a case where the refund is on account of supply of services made to a Special Economic Zone unit or a Special Economic Zone developer;

(f) a declaration to the effect that the Special Economic Zone unit or the Special Economic Zone developer has not availed the input tax credit of the tax paid by the supplier of goods or services or both, in a case where the refund is on account of supply of goods or services made to a Special Economic Zone unit or a Special Economic Zone developer; (Refer Note 10)

(f) a declaration to the effect that tax has not been collected from the Special Economic Zone unit or the Special Economic Zone developer, in a case where the refund is on account of supply of goods or services or both made to a Special Economic Zone unit or a Special Economic Zone developer;

(g) a statement containing the number and date of invoices along with such other evidence as may be notified in this behalf, in a case where the refund is on account of deemed exports;

(h) a statement containing the number and the date of the invoices received and issued during a tax period in a case where the claim pertains to refund of any unutilised input tax credit under sub-section (3) of section 54 where the credit has accumulated on account of the rate of tax on the inputs being higher than the rate of tax on output supplies, other than nil-rated or fully exempt supplies;

(i) the reference number of the final assessment order and a copy of the said order in a case where the refund arises on account of the finalisation of provisional assessment;

(j) a statement showing the details of transactions considered as intra-State supply but which is subsequently held to be inter-State supply;

(k) a statement showing the details of the amount of claim on account of excess payment of tax;

(l) a declaration to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed does not exceed two lakh rupees:

Provided that a declaration is not required to be furnished in respect of the cases covered under clause (a) or clause (b) or clause (c) or clause (d) or clause (f) of sub-section (8) of section 54;

(m) a Certificate in Annexure 2 of FORM GST RFD 01 issued by a chartered accountant or a cost accountant to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed exceeds two lakh rupees:

Provided that a certificate is not required to be furnished in respect of cases covered under clause (a) or clause (b) or clause (c) or clause (d) or clause (f) of sub-section (8) of section 54;

Explanation.- For the purposes of this rule-

(i) in case of refunds referred to in clause (c) of sub-section (8) of section 54, the expression “invoice” means invoice conforming to the provisions contained in section 31;

(ii) where the amount of tax has been recovered from the recipient, it shall be deemed that the incidence of tax has been passed on to the ultimate consumer.

(3) Where the application relates to refund of input tax credit, the electronic credit ledger shall be debited by the applicant by an amount equal to the refund so claimed.

(4) In the case of zero-rated supply of goods or services or both without payment of tax under bond or letter of undertaking in accordance with the provisions of sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), refund of input tax credit shall be granted as per the following formula,-

Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero rated supply of services) x Net ITC ÷ Adjusted Total Turnover

(A) “Refund amount” means the maximum refund that is admissible;

(B) “Net ITC” means input tax credit availed on inputs and input services during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both;

(C) “Turnover of zero-rated supply of goods” means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking or the value which is 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier, whichever is less, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both;

(D) “Turnover of zero-rated supply of services” means the value of zero-rated supply of services made without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:-

Zero-rated supply of services is the aggregate of the payments received during the relevant period for zero-rated supply of services and zero-rated supply of services where supply has been completed for which payment had been received in advance in any period prior to the relevant period reduced by advances received for zero-rated supply of services for which the supply of services has not been completed during the relevant period;

(E) “Adjusted Total turnover” means the turnover in a State or a Union territory, as defined under sub-section clause (112) of section 2, excluding the value of exempt supplies other than zero-rated supplies, during the relevant period; (Refer Note 1& 7)

(E) “Adjusted Total Turnover” means the sum total of the value of-

(a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and

(b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services,

(i) the value of exempt supplies other than zero-rated supplies; and

(ii) the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or sub-rule (4B) or both, if any,

during the relevant period.

(F) “Relevant period” means the period for which the claim has been filed. (Refer Note 3)

(4A) In the case of supplies received on which the supplier has availed the benefit of notification No. 48/2017 Central Tax dated 18th October, 2017, refund of input tax credit, availed in respect of other inputs or input services used in making zero-rated supply of goods or services or both, shall be granted. (Refer Note 3& 4)

(4A) In the case of supplies received on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 48/2017 Central Tax dated 18/10/2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1305(E) dated 18/10/2017, refund of input tax credit, availed in respect of other inputs or input services used in making zero-rated supply of goods or services or both, shall be granted.

(4B) In the case of supplies received on which the supplier has availed the benefit of notification No. 40/2017 Central Tax (Rate) dated 23rd October, 2017 or notification No. 41/2017 Integrated Tax (Rate) dated 23rd October, 2017, or both, refund of input tax credit, availed in respect of inputs received under the said notifications for export of goods and the input tax credit availed in respect of other inputs or input services to the extent used in making such export of goods, shall be granted. (Refer Note 3 & 4)

(4B) In the case of supplies received on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 40/2017 Central Tax (Rate) dated the 23rd October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1320 (E) dated the 23rd October, 2017 or notification No. 41/2017 Integrated Tax (Rate) dated the 23rd October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1321(E) dated the 23rd October, 2017 or notification No. 78/2017 Customs dated the 13th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1272(E) dated the 13th October, 2017 or notification No. 79/2017 Customs dated the 13th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1299(E) dated the 13th October, 2017, or all of them, refund of input tax credit, availed in respect of inputs received under the said notifications for export of goods and the input tax credit availed in respect of other inputs or input services to the extent used in making such export of goods, shall be granted. (Refer Note 8)

(4B) Where the person claiming refund of unutilised input tax credit on account of zero rated supplies without payment of tax has –

(a) received supplies on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 40/2017 Central Tax (Rate), dated 23/10/2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1320(E) dated 23/10/2017 or notification No. 41/2017 Integrated Tax (Rate), dated 23/10/2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1321(E) dated 23/10/2017; or

(b) availed the benefit of notification No. 78/2017 Customs, dated 13/10/2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1272(E), dated 13/10/2017 or notification No. 79/2017 Customs, dated 13/10/2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1299(E), dated 13/10/2017,

the refund of input tax credit, availed in respect of inputs received under the said notifications for export of goods and the input tax credit availed in respect of other inputs or input services to the extent used in making such export of goods, shall be granted.

(5) In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula,-

Maximum Refund Amount = {(Turnover of inverted rated supply of goods) x Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods

Explanation.- For the purposes of this sub rule, the expressions “Net ITC” and “Adjusted Total turnover” shall have the same meanings as assigned to them in sub-rule (4). (Refer Note 5)

(5). In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula:-

Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods and services.

Explanation:- For the purposes of this sub-rule, the expressions-

(a) “Net ITC” shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both; and

(b) “Adjusted Total turnover” shall have the same meaning as assigned to it in sub-rule (4). (Refer Note 6)

(5) In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula:-

Explanation:- For the purposes of this sub-rule, the expressions–

(b) Adjusted Total turnover shall have the same meaning as assigned to it in sub-rule (4). (Refer Note 9)

(b) “Adjusted Total turnover” and “relevant period” shall have the same meaning as assigned to them in sub-rule (4).

Amendments History:

1. In Clause (E) of Sub rule (4), the text ‘sub-section’ substituted with the text ‘clause’ w.e.f. 01/07/2017 vide Central Tax Notification 17/2017 dt. 27/07/2017.

2. Third proviso to sub-rule (1) substituted vide Central Tax Notification 47/2017 dt. 18/10/2017.

3. Sub-rule (4) substituted & sub-rules (4A) and (4B) inserted w.e.f. 23/10/2017 vide Central Tax Notification 75/2017 dt. 29/12/2017. To view the previous version of sub-rule (4), please refer Central Tax Notification 10/2017 dt. 28/06/2017.

4. Sub-rules (4A) and (4B) substituted w.e.f. 23/10/2017 vide Central Tax Notification 3/2018 dt. 23/01/2018.

5. Sub-rule (5) substituted vide Central Tax Notification 21/2018 dt. 18/04/2018.

6. Sub-rule (5) again substituted w.r.e.f. 01/07/2017 vide Central Tax Notification 26/2018 dt. 13/06/2018.

7. Clause (E) of sub-rule (4) substituted vide Central Tax Notification 39/2018 dt. 04/09/2018.

8. Sub-rule (4B) substituted vide Central Tax Notification 54/2018 dt. 09/10/2018.

9. Explanation (b) to sub-rule (5) substituted vide Central Tax Notification 74/2018 dt. 31/12/2018.

10. Clause (f) of sub-rule (2) substituted vide Central Tax Notification 3/2019 dt. 29/01/2019.

11. Clause (C) of sub-rule (4) substituted vide Central Tax Notification 16/2020 dt. 23/03/2020.

12. In sub-rule (1), the text “subject to the provisions of rule 10B” inserted after the text “may file”, vide Central Tax Notification 35/2021 dt. 24/09/2021, pending notification on commencement date thereof. Subsequently, vide Central Tax Notification 38/2021 , CBIC notifies 01/01/2022 as the commencement date in respect of amendment in sub-rule (1) which was made vide clause (i) of sub-rule (6) of the CGST (8th Amendment) Rules, 2021 (Central Tax Notification 35/2021 ).

13. Sub-rule (1A), applicable w.e.f. 24/09/2021, inserted vide the Central Tax Notification 35/2021 dt. 24/09/2021.

—–

Note: The CGST Rules 2017 along with the prescribed Forms were initially notified vide Central Tax Notifications 3/2017 dt. 19/06/2017 ( Rule 1 to 26 ), 10/2017 dt. 28/06/2017 ( Rules 27 to 138 ) and 15/2017 dt. 01/07/2017 ( Rules 139 to 162 ). These Rules/ Forms were subsequently amended by CBIC through various Notifications issued from time to time. Information on this page is a Rule-wise compilation of Amendments made by all such Notifications upto 29/12/2021, with best possible efforts for accuracy. In any case, E&OE . For official/ updated information, please visit CBIC website.

Whether the supplier would be eligible to get IGST refund against the Invoice made to SEZ Developer without the endorsement made by the SEZ Officer on the supplies? If no, what next steps can be made by the supplier to get back IGST debited in the monthly return.In case of non-refund, if the debited amount can be reversed to electronics credit ledger?

Our refund date has lapsed. So how can we get it? in our credit ledger or cash ledger?

Hon’ble SC has held in the case Union of India v. VKC Footsteps India Pvt Ltd. that CGST Rule Rule 89(5) is not ultra vires and is in conformity with Section 54(3) of the CGST Act 2017. It may be noted earlier Hon’ble Gujarat HC had struck down CGST Rule 89(5) which denies refund of unutilized input tax credit (ITC) paid on input services accumulated on account of inverted duty structure.

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Chapter 10 Refund Rules (Rule 89 to 97)

Rule 89 GST - Application for refund of tax, interest, penalty, fees or any other amount

Last updated at March 1, 2023 by Teachoo

According to Rule 89 of Central Goods and Service Tax Act, 2017 as passed by Lok Sabha :

Provided that a declaration is not required to be furnished in respect of the cases covered under clause (a) or clause (b) or clause (c) or clause (d) or clause (f) of sub-section (8) of section 54;

a Certificate in Annexure 2 of FORM GST RFD-01 issued by a chartered accountant or a cost accountant to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed exceeds two lakh rupees:

Provided that a certificate is not required to be furnished in respect of cases covered under clause (a) or clause (b) or clause (c) or clause (d) or clause (f) of sub- section (8) of section 54;

Explanation .– For the purposes of this rule-

"Adjusted Total turnover" means the turnover in a State or a Union territory, as defined under sub-section (112) of section 2, excluding the value of exempt supplies other than zero-rated supplies, during the relevant period;

“Relevant period” means the period for which the claim has been filed

Explanation.- For the purposes of this sub rule, the expressions “Net ITC” and “Adjusted Total turnover” shall have the same meanings as assigned to them in sub-rule (4).

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Amended Clause (C) of Rule 89(4) of CGST Rules: Zero Rated (Export) Turnover for Purpose of ITC Refund

Amended Clause (C) -CGST Rules - ITC Refund

Is the Govt Walking the Talk on Support to Exporters ?

Exports like many other sectors in the economy, has taken a major hit due to the COVID 19 pandemic and consequential business disruptions and lockdowns. A PIB Press release dated 15th Oct 2020 from the Ministry of Commerce & Industry , inter alia states “India’s overall exports ( Merchandise and Services combined ) in April -Sept 2020-21 are estimated to be USD 221.86 Bn, exhibiting a negative growth of -16.66% over the same period last year “ .

The Govt announced various steps to boost exports and support exporters in this period, e.g: The validity of Foreign Trade Policy (2015-20) extended by one year i.e. upto 31-3-2021 and relaxations granted and time lines extended due to COVID-19 . ( b). Interest Equalization Scheme on pre and post shipment rupee export credit was extended by one year i.e. upto 31-3-2021. ( c) .Line Ministries have notified various sectoral incentive packages, such as Production Linked Incentive Scheme (PLI) by Ministry of Electronics and Information Technology (MeitY) and PLI Scheme by Department of Pharma for Key Starting Materials (KSMs)/ Drug Intermediates and Active Pharmaceutical Ingredients (APIs).( source ;Ministry of Commerce Press release dated 15th Sept 2020)

The above are primarily reliefs in the domain of export finance/working capital . One would have expected some tax measures also to support the beleaguered exporters. Instead, ironically soon after the lockdown was imposed, Notification 16/2020 dated 23.3. 2020 imposed artificial restrictions of the quantum of IGST refunds for exports. Though this notification may have been an aberration and in fact has been comparatively unnoticed till now, it raises questions whether the Govt is really walking the talk on supporting exporters in the arena of GST reforms , as it is supporting them through other financing schemes .

The Amendment

Notification 16/2020 dated 23.3. 2020 has led to amendment of clause (C) to Rule 89(4) ; amending the definition of ‘turnover of zero-rated supply of goods’ as follows

Effect & Implication of the Amendment

The exporters of zero rated supply of goods had the option of exporting without payment of tax under Bond or LUT . They had the option of claiming refund of the consequential unutilized ITC as per the following formula in Rule 89(4):

Refund Amount = Net ITC * Turnover of Export( Zero rated goods ) / Total Adjusted Turnover.

Before amendment, the actual transaction value of the exported goods was taken in the numerator for determining the ratio of export turnover to total turnover and the same ratio was applied to the ITC to arrive at the refund amount . Now , post amendment, the numerator is artificially restricted (by a deeming/legal fiction ) , to max 1.5 times the “value of supply” of similar goods by same exporter or similarly placed suppliers , in the domestic market

Anomalies & Questions

( a) Exporters who do not pay GST on the exported final products and claim refund of unutilized ITC under Rule 89 (4)( C), and

( b) Exporters who opt to pay IGST on exported final products and claim refund for the same tax under Rule 96 .

There is no ” intelligible differentia” spelt out for this classification , to satisfy the test of Article 14.

Way Forward

It may be perhaps prudent, and not too late, to rescind the said amendment to Clause C of Rule 89(4) for the reasons stated above in this article , , as inter alia the New Rule 96 B itself builds in adequate safeguards against artificially inflated & fabricated export turnover . The revenue loss , if any , will be far less than the goodwill earned from bona fide exporters, and perhaps also the increase in quantum of exports due to such positive and confidence building measures

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Dear Members,

As per Rule 89(4) of Central Goods and Services Tax Rules, 2017 ( CGST Rules ), refund of Input Tax Credit ( ITC ) shall be granted as per following formula, in case of zero-rated supply of services without payment of IGST under bond or letter of undertaking ( LUT ) in accordance with Section 16(3) of the Integrated Goods and Services Tax Act, 2017 (IGST Act):

Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷ Adjusted Total Turnover

(A) “ Refund amount ” means the maximum refund that is admissible;

(B) “ Net ITC ” means input tax credit availed on inputs and input services during the relevant period other than ITC availed for which refund is claimed under sub-rules (4A) or (4B) or both;

(C) “ Turnover of zero-rated supply of goods ” means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or LUT, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both;

(D) “ Turnover of zero-rated supply of services ” means the value of zero-rated supply of services made without payment of tax under bond or LUT, calculated in the following manner, namely :-

(E) “ Adjusted Total turnover ” means the turnover in a State or a Union territory, as defined under Section 2(112), excluding -

(a) the value of exempt supplies other than zero-rated supplies and

(b) the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both, if any,

during the relevant period;

(F) “ Relevant period ” means the period for which the claim has been filed.

As per Section 2(112) of CGST Act , “ turnover in State ” or “turnover in Union territory” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes CGST, SGST, UTGST, IGST and cess.

In the case where an Assessee is only engaged in supply of services outside India for which payment is received by it in later months. The amount received by assessee in a particular month is always different from the amount of invoices raised by assesse. Since assessee is only providing export services, refund amount for assessee shall be calculated in the following manner:

Refund Amount = Net ITC x (Turnover of zero-rated supply of services) ÷ Adjusted Total Turnover

Here it is pertinent to note that Adjusted Total Turnover i.e. turnover in a state { Section 2(112) of CGST Act } is required to be taken in the denominator for calculating the refund amount. Adjusted total turnover means the aggregate value of all taxable supplies, intra-state exempt supplies, exports of goods or services, and inter-state supplies. In the instant case, since assesse is only providing export services, value of export of services is required to be taken to calculate adjusted total turnover.

The issue here is whether the value of export of services shall be the value of invoice raised by assessee in a particular month for export services provided by it or the value of zero-rated supply of services as per Clause(D) i.e. payments received for zero-rated supply of services during the relevant period.

It may be noted that taking the value of invoice raised for export services might give absurd & unintended results, in case of assessees where the amount received is less than value of invoice raised during any tax period, as its refund would get restricted to the extent of payment received. The said assessee would not be able to claim the said refund amount in any future tax periods. Thus, the assessee who is an 100% Export Oriented Undertaking would not be able to claim 100% refund of GST paid by it on inputs & input services received for providing export services, which is not the intention of law. The same is explained with the help of an example below:

Value of Export invoice raised in July, 2017 – 1,00,000/-

Payment received during July, 2017 – 80,000/-

ITC taken in July, 2017 – 10,000/-

Refund amount = 10000 x 80000 / 100000 = 8000/-

In the above case, though the exporter had taken ITC equivalent to INR 10000/-, but refund amount is coming to INR 8000/-. Further, exporter cannot claim refund of balance amount of INR 2000/- in any future tax period as the maximum refund amount is restricted to ITC claimed during the tax period for which refund is filed. Thus, INR 2000/- would become a cost for the said exporter.

In my view, the above is not the intention of the law. The amount of payment received for zero-rated supply of services during the relevant period shall only be considered for calculating the adjusted total turnover. This interpretation would be in line with the provisions under erstwhile Cenvat Credit Rules, 2004 with respect of refund of Cenvat credit to exporter of services.

Kindly confirm and guide as to how to proceed further in this regard?

Thanks & Regards,

Amit Khurana

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Showing Replies 1 to 2 of 2 Records

In my opinion your method of calculation is not correct.

Your total turnover within the state or union territory is ₹ 1,00,000/-.

Total ITC availed by you is ₹ 10,000/-.

Therefore the refund amount is 1,00,000X10,000 divided by 1,00,000.

Payment received by you do not have any significance for filing the refund claim. By the above calculation myour eligible refund will be Ra. 10,000/-

Thank you for your reply. However, I would like to draw your attention to the definition of "Turnover of Zero-Rated Supply of Services" as mentioned in Rule 89(4) :

“ Turnover of zero-rated supply of services ” means the value of zero-rated supply of services made without payment of tax under bond or LUT, calculated in the following manner, namely :-

Therefore, the actual receipts of the export of services do matter. that is the reason why the authorities ask for FIRC/BRC to ensure that the payment has been received.

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Clarification on Statements to be Annexed With the Application for Refund

Updated on : Jan 25th, 2023 - 5:36:26 PM

In our previous article, we had discussed the format of form GST RFD-01 in detail. There are certain statements to be annexed along with the form GST RFD-01 based on the reason for claiming the refund. There are 7 different statements specified depending upon the reason for claiming the refund. A certificate is also required at the time of filing GST RFD-01, which requires the signature of a chartered accountant or a cost accountant. All the statements will be auto-populated on the common portal and the applicant has to select the corresponding invoices for which the refund is claimed.

Latest Update on GST Refund

05th July 2022 Taxpayers can exclude the COVID pandemic period (1st March 2020 and 28th February 2022) while calculating the time limit for filing GST refund applications under Sections 54 or 55 of the CGST Act. 1st February 2022 Budget 2022 update- 1. Section 54 is amended to provide that refund claim of any balance in the electronic cash ledger can be made in a particular form and manner prescribed. 2. The time limit to claim refund by UN agencies is now two years from last day of quarter when supply was received instead of six months. 3. The restriction to refund taxpayers for tax defaults, that earlier applied to unutilised ITC refund, is now extended to other types of refunds. 4. The relevant date to file refund claim application for supplies to SEZ is clarified in new sub-clause (ba) of clause (2) of the explanation. 1st May 2021 Where the time limit to pass orders for rejecting any refund claim fully or partly falls between 15th April 2021 and 30th May 2021, it is extended. The extended time limit shall be later of two dates: (1) 15 days after reply to notice OR (2) 31st May 2021

Statement 1

It has to be annexed with form GST RFD-01 if the refund is claimed due to the tax rate being higher on the inputs used then the tax rate on the sales. Details of the tax paid on the output under different heads like CGST, SGST, UTGST and IGST would be mentioned in the details to be provided for outward supplies. There will be two separate tables for the inward and outward supplies. Details regarding the tax paid on inputs and the total ITC available under above mentioned different heads would appear in the statement.

For Example:

Glow Private Limited signed a contract for providing investment consultancy services to Viraj Consultants for a sum of Rs 5 lakh. Glow Private Limited had a tax liability for the above service provided of Rs 90,000 due to the 18% tax charged under GST based on the contract with Glow private limited. Glow Private Limited paid tax on inputs at the rate of 28% and the ITC available was Rs 1,00,000. Glow Private Limited can claim the refund of Rs 10,000 for the excess tax paid on inputs. Viraj Consultants can claim the refund for the excess tax paid on the inputs than the final tax liability on output, by filing form GST RFD-01 annexed with statement 1 and certificate signed by a chartered accountant or cost accountant.

Statement 2

It has to be annexed in the case of an application for refund filed for the tax paid on exports . Shipping bill details like port code and date and export general manifest (EGM) details are mandatory to be mentioned in the table under statement 2. Reference number and date mentioned in the bank reconciliation certificate (BRC) or foreign inward remittance certificate (FICR) has to be shared in the table under the statement 2.

Statement 3

Statement 4

A statement has to be annexed by the applicant in the case of supply of good or services to a SEZ unit/SEZ developer. Following are the details to be provided in the table:

Statement 5

It is to be attached in the case of goods supplied from an export-oriented unit or in the case of the goods being treated as deemed exports. Following details are required in statement 5:

Statement 6

This statement is filed in the case of refund claimed due to an interstate supply of goods and services being later considered as intrastate or vice-versa. Following details have to be shared in the statement:

Statement 7

It is to be attached when there was excess tax paid in the last GSTR 3 filed. Following details are to be mentioned:

Statement 8

It is to be attached when an unregistered person is claiming a GST refund on account of excess tax payment due to cancellation or termination of agreement or contract for the supply of service. The unregistered taxpayer must submit the following documents:

You can find the exact format of statement to be annexed to the application for refund on the department’s website.

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17 CFR § 270.3a-4 - Status of investment advisory programs.

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This section is a nonexclusive safe harbor from the definition of investment company for programs that provide discretionary investment advisory services to clients. There is no registration requirement under section 5 of the Securities Act of 1933 [ 15 U.S.C. 77e ] with respect to programs that are organized and operated in the manner described in § 270.3a-4. The section is not intended, however, to create any presumption about a program that is not organized and operated in the manner contemplated by the section .

(a) Any program under which discretionary investment advisory services are provided to clients that has the following characteristics will not be deemed to be an investment company within the meaning of the Act [ 15 U.S.C. 80a , et seq. ]:

(1) Each client's account in the program is managed on the basis of the client's financial situation and investment objectives and in accordance with any reasonable restrictions imposed by the client on the management of the account.

(i) At the opening of the account, the sponsor or another person designated by the sponsor obtains information from the client regarding the client's financial situation and investment objectives, and gives the client the opportunity to impose reasonable restrictions on the management of the account;

(ii) At least annually, the sponsor or another person designated by the sponsor contacts the client to determine whether there have been any changes in the client's financial situation or investment objectives, and whether the client wishes to impose any reasonable restrictions on the management of the account or reasonably modify existing restrictions;

(iii) At least quarterly, the sponsor or another person designated by the sponsor notifies the client in writing to contact the sponsor or such other person if there have been any changes in the client's financial situation or investment objectives, or if the client wishes to impose any reasonable restrictions on the management of the client's account or reasonably modify existing restrictions, and provides the client with a means through which such contact may be made; and

(iv) The sponsor and personnel of the manager of the client's account who are knowledgeable about the account and its management are reasonably available to the client for consultation.

(3) Each client has the ability to impose reasonable restrictions on the management of the client's account, including the designation of particular securities or types of securities that should not be purchased for the account, or that should be sold if held in the account; Provided, however, that nothing in this section requires that a client have the ability to require that particular securities or types of securities be purchased for the account.

(4) The sponsor or person designated by the sponsor provides each client with a statement, at least quarterly, containing a description of all activity in the client's account during the preceding period, including all transactions made on behalf of the account, all contributions and withdrawals made by the client, all fees and expenses charged to the account, and the value of the account at the beginning and end of the period.

(5) Each client retains, with respect to all securities and funds in the account, to the same extent as if the client held the securities and funds outside the program, the right to:

(i) Withdraw securities or cash;

(ii) Vote securities, or delegate the authority to vote securities to another person ;

(iii) Be provided in a timely manner with a written confirmation or other notification of each securities transaction, and all other documents required by law to be provided to security holders; and

(iv) Proceed directly as a security holder against the issuer of any security in the client's account and not be obligated to join any person involved in the operation of the program, or any other client of the program, as a condition precedent to initiating such proceeding.

(b) As used in this section , the term sponsor refers to any person who receives compensation for sponsoring, organizing or administering the program, or for selecting, or providing advice to clients regarding the selection of, persons responsible for managing the client's account in the program. If a program has more than one sponsor, one person shall be designated the principal sponsor, and such person shall be considered the sponsor of the program under this section .

Securities Act of 1933

IMAGES

GST Refund Process for All Types of refunds Explained with Action Items
Statement 3A under Rule 89(4)
GST Refund Process for All Types of refunds Explained with Action Items
Refund of ITC on Export of Goods & Services without payment of IGST
GST Refund Process for All Types of refunds Explained with Action Items
ITC Refund on Account of Exports Without Payment of Tax

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COMMENTS

Refund of ITC paid on Exports of Goods and Services Without Payment of
In the Table Computation of Refund to be claimed Statement-3A [rule 89(4)]: - Note: a. In Column (1) of Turnover of zero rated supply of goods and services(1), enter the aggregate turnover of zero rated supply of goods and services i.e. Integrated Tax, Central Tax, State/ UT Tax and Cess. b.
Statement 3A Under Rule 89 4
3A [rule 89 (4)] Refund Type: Export without payment of tax (accumulated ITC) - calculation of refund amount (Amount in Rs.) Turnover of zero rated supply Adjusted total Net input tax credit Refund amount (1×2÷3) of goods and services turnover 1 2 3 4 12,07,03,355.48 98,39,360.00 9,32,64,62,987.00 1,27,341.28 Back to top About About Scribd Press
Refund of accumulated credit
Statement 3A of FORM RFD-01A Refund of ITC shall be granted as per the following formula: Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷Adjusted Total Turnover Refund Amount= Maximum refund that is admissible
Statement 3A under Rule 89(4)
Statement 3A under Rule 89 (4) 58 Views. Under the GST law, refund of unutilized input tax credit in respect of export of goods or services without payment of tax under Bond or LUT would be available subject to submission of statement 3A providing details of export supplies. The given document provides the format of such statement.
Refund under GST Regime- Detailed Analysis
The formula for calculation of refund as per Rule 89 (4) is: Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷Adjusted Total Turnover Turnover of Zero-rated supply of goods (as per amended definition) = Rs. 1500
PDF Application for Refund
input tax credit of the tax paid by the application covered under this refund claim. _ DECLARATION [section 54(3)(ii)] ... Statement- 3A [rule 89(4)] Refund Type: Export without payment of tax (accumulated ITC) - calculation of refund amount 123Subsituted vide Notification no. 56/2019-CT dt. 14.11.2019
Statement-3 & 3A| Annexure to GST Refund application in form GST RFD-01
How Statement-3 & 3A is prepared Post login at GST Portal, when a new refund application is created at "Services>Refunds>Application for Refund> Refund of ITC on Export of Goods & Services without Payment of Tax", the system will provide a offline utility of Statement 3. Downloaded utility will ask for following information: GSTIN of applicant
Rule 89 of CGST Rules 2017: Application for Refund of Tax, Interest
(a) supplier of goods after such goods have been admitted in full in the Special Economic Zone for authorised operations, as endorsed by the specified officer of the Zone; (b) supplier of services along with such evidence regarding receipt of services for authorised operations as endorsed by the specified officer of the Zone:
Rule 89 GST
a statement containing the number and the date of the invoices received and issued during a tax period in a case where the claim pertains to refund of any unutilised input tax credit under sub-section (3) of section 54 where the credit has accumulated on account of the rate of tax on the inputs being higher than the rate of tax on output …
PDF FORM-GST-RFD-01 Application for Refund
refund under clause (a) or clause (b) or clause (c) or clause (d) or clause (f) of sub- section (8) of section 54.) 10. Verification ... Statement- 3A [rule 89(4)] Refund Type: Export without payment of tax (accumulated ITC) - calculation of refund amount Turnover of zero rated supply of goods
Amended Clause (C) of Rule 89(4) of CGST Rules
The said amendment to Rule 89 ( 4) ( C) , will entice the exporters to export goods on payment of IGST and claim full refund thereof under Rule 96 and not opt for refund of unutilized ITC under Rule 89(4), as the working capital hit in Rule 96 will be usually lower than the loss of ITC as per amended Rule 89(4) . Thus, Rule 89 (40 ( C) itself ...
Refund of ITC u/r 89 (4) of the CGST Rules, 2017, Goods and Services
As per Rule 89 (4) of Central Goods and Services Tax Rules, 2017 ( CGST Rules ), refund of Input Tax Credit ( ITC) shall be granted as per following formula, in case of zero-rated supply of services without payment of IGST under bond or letter of undertaking ( LUT) in accordance with Section 16 (3) of the Integrated Goods and Services Tax Act, …
Clarification on Statements to be Annexed With the ...
This statement is filed in the case of refund claimed due to an interstate supply of goods and services being later considered as intrastate or vice-versa. Following details have to be shared in the statement: GSTIN or name in case of the supply of goods to a consumer Date and taxable value mentioned in the invoice
PDF CBEC-20/23/03/2020-GST Government of India Ministry of Finance
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." 4. The manner of calculation of Adjusted Total Turnover under sub-rule (4) of Rule 89 of CGST Rules, 2017. 4.1 Doubts have been raised as to whether the restriction on turnover of zero-rated supply
17 CFR § 210.3A-03
(a) [Reserved] (b) As to each consolidated financial statement and as to each combined financial statement, if there has been a change in the persons included or excluded in the corresponding statement for the preceding fiscal period filed with the Commission that has a material effect on the financial statements, the persons included and the persons excluded shall be disclosed.
17 CFR § 240.3a4-1
(a) An associated person of an issuer of securities shall not be deemed to be a broker solely by reason of his participation in the sale of the securities of such issuer if the associated person: (1) Is not subject to a statutory disqualification, as that term is defined in section 3(a)(39) of the Act, at the time of his participation; and (2) Is not compensated in connection with his ...
17 CFR § 270.3a-4
This section is a nonexclusive safe harbor from the definition of investment company for programs that provide discretionary investment advisory services to clients. There is no registration requirement under section 5 of the Securities Act of 1933 [15 U.S.C. 77e] with respect to programs that are organized and operated in the manner described in § 270.3a-4.
Body
Statement- 3A [rule 89 (4)] Refund Type: Export without payment of tax (accumulated ITC) - calculation of refund amount (Amount in Rs.) "Statement-4 [rule 89 (2) (d) and 89 (2) (e)] Refund Type: On account of supplies made to SEZ unit or SEZ Developer (on payment of tax) (Amount in Rs.) Statement-5A [rule 89 (4)]
Post-Effective Amendment No.1 on Form S-8 to Form S-4
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the "Securities Act"), this registration statement (the "Registration Statement") also covers an indeterminate number of additional Ordinary Shares, par value $0.0001 per share ("Ordinary Shares"), of Actavis plc, a public limited company organized under the laws of Ireland (the "Registrant"), which may ...