GST: CBIC clarifies Issues on Refund [Read Circular]

The Central Board of Indirect Taxes and Customs (CBIC) has clarified the miscellaneous issues relating the refund under the Goods and Services Tax ( GST ) law.

With regard to the issue of Status of refund claim after issuance of deficiency memo and re-credit of electronic credit ledger, it was clarified that presently, the common portal does not allow a taxpayer to file a fresh application for the refund once a deficiency memo has been issued against an earlier refund application for the same period. Therefore, it is clarified that till the time such facility is developed, taxpayers would be required to submit the rectified refund application under the earlier Application Reference Number (ARN) only. Thus, it is reiterated that when a deficiency memo in FORM GST RFD-03 is issued to taxpayers, re-credit in the electronic credit ledger (using FORM GST RFD-01B) is not required to be carried out and the rectified refund application would be accepted by the jurisdictional tax authorities with the earlier ARN itself. It is further clarified that a suitable clarification would be issued separately for cases in which such re-credit has already been carried out.

On the issue of allowing exporters who have received capital goods under EPCG to claim the refund of IGST paid on exports, the circular said that the net effect of the amendments in September would be that any exporter who himself/herself imported any inputs/capital goods in terms of notification Nos. 78/2017-Customs and 79/2017-Customs both dated 13th October 2017 shall be eligible to claim the refund of the IGST paid on exports till the date of the issuance of the notification No. 54/2018 – Central Tax dated the 9th October 2018.

“Further, after the issuance of notification No. 54/2018 – Central Tax dated the 9th October 2018, exporters who are importing goods in terms of notification Nos. 78/2017- Customs and 79/2017-Customs both dated 13th October 2017 would not be eligible for the refund of IGST paid on exports as provided in the said sub-rule. However, exporters who are receiving capital goods under the EPCG scheme, either through import in terms of notification No. 79/2017-Customs dated 13th October, 2017 or through domestic procurement in terms of notification No. 48/2017-Central Tax, dated 18th October, 2017, shall continue to be eligible to claim refund of IGST paid on exports and would not be hit by the restrictions provided in the said sub-rule. All clarifications issued in this regard vide any Circular issued earlier are hereby superseded,” it said.