1. Claim for refund filed by an Input Service Distributor, a
person paying tax under section 10 or a non-resident taxable person.
Doubts
Doubts have been raised in case of claims for refund filed by an
Input Service Distributor (ISD for short), a person paying tax under section 10
of the CGST Act (composition taxpayer for short)or a non-resident taxable
person in light of para 2.0 of Circular No. 24/24/2017-GST dated 21.12.2017
which mandates that the refund claim for a tax period may be filed only after
filing the details in FORM GSTR-1 for the said tax period and that it is also to be ensured that a
valid return in FORM GSTR-3B has been filed for the last tax period before the
one in which the refund application is being filed.
In this regard, attention is invited to sub-section (1) of section
37 of the CGST Act read with rule 59 of the Central Goods and Services Tax Rules,
2017 (CGST Rules for short) which mandates that every registered person, other
than an Input Service Distributor or a non-resident taxable person or a person
paying tax under the provisions of section 10 or section 51 or section 52,
shall furnish the details of outward supplies of goods or services or both
effected during a tax period in FORM GSTR-1. Further, as per sub-section (2) of
section 39 of the CGST Act read with rule 62 of the CGST Rules, a composition
taxpayer is required to furnish the return in FORM GSTR-4; as per sub-section
(4) of section 39 of the CGST Act read with rule 65 of the CGST Rules, an ISD
is required to furnish the return in FORM GSTR-6 and as per sub-section (5) of
section 39 of the CGST Act read with rule 63 of the CGST Rules, a non-resident
taxable person is required to furnish the return in FORM GSTR-5.
Clarification
It is clarified that in case of a claim for refund of balance in
the electronic cash ledger filed by an ISD or a composition taxpayer; and the
claim for refund of balance in the electronic cash and/or credit ledger by a
non-resident taxable person, the filing of the details in FORM GSTR-1 and the
return in FORM GSTR-3B is not mandatory. Instead, the return in FORM GSTR-4
filed by a composition taxpayer, the details in FORM GSTR-6 filed by an ISD and
the return in FORM GSTR-5 filed by a non-resident taxable person shall be sufficient
for claiming the said refund.
2.
Application for refund
of integrated tax paid on export of services and supplies made to a Special
Economic Zone developer or a Special Economic Zone unit:
Doubts
It has been represented that while filing the return in FORM
GSTR-3B for a given tax period, certain registered persons committed errors in
declaring the export of services on payment of integrated tax or zero rated
supplies made to a Special Economic Zone developer or a Special Economic Zone
unit on payment of integrated tax. They have shown such supplies in the Table
under column 3.1(a) instead of showing them in column 3.1(b) of FORM GSTR-3B
whilst they have shown the correct details in Table 6A or 6B of FORM GSTR-1 for
the relevant tax period and duly discharged their tax liabilities. Such
registered persons are unable to file the refund application in FORM GST
RFD-01A for refund of integrated tax paid on the export of services or on
supplies made to a SEZ developer or a SEZ unit on the GST common portal because
of an in-built validation check in the system which restricts the refund amount
claimed (integrated tax/cess) to the amount of integrated tax/cess mentioned under column 3.1(b) of FORM GSTR-3B
(zero rated supplies) filed for the corresponding tax period.
Clarification
It is clarified that for the tax periods commencing from 01.07.2017
to 31.03.2018, such registered persons shall be allowed to file the refund
application in FORM GST RFD-01A 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.
3.
Refund of unutilized
input tax credit of compensation cess availed on inputs in cases where the
final product is not subject to the levy of compensation cess:
Doubts
Doubts have been raised whether an exporter is eligible to claim
refund of unutilized input tax credit of compensation cess paid on inputs,
where the final product is not leviable to compensation cess. For instance,
cess is levied on coal, which is an input for the manufacture of aluminum
products, whereas cess is not levied on aluminum products.
Clarification
In this regard, section 16(2) of the Integrated Goods and Services
Tax Act, 2017 (IGST Act for short) states that, subject to the provisions of
section 17(5) of the CGST Act, credit of input tax may be availed for making
zero rated supplies. Further, as per section 8 of the Goods and Services Tax
(Compensation to States) Act, 2017, (hereafter referred to as the Cess Act),
all goods and services specified in the Schedule to the Cess Act are leviable
to cess under the Cess Act; and vide section 11 (2) of the Cess Act, section 16
of the IGST Act is mutatis mutandis made applicable to inter-State supplies of
all such goods and services.
Thus, it implies that all supplies of such goods and services are
zero rated under the Cess Act.
Moreover, as section 17(5) of the CGST Act does not restrict the
availment of input tax credit of compensation cess on coal, it is clarified
that a registered person making zero rated supply of aluminum products under
bond or LUT may claim refund of unutilized credit including that of
compensation cess paid on coal.
Such registered persons may also make zero-rated supply of aluminum
products on payment of integrated tax but they cannot utilize the credit of the
compensation cess paid on coal for payment of integrated tax in view of the
proviso to section 11(2) of the Cess Act, which allows the utilization of the
input tax credit of cess, only for the payment of cess on the outward supplies.
Accordingly, they cannot claim refund of compensation cess in case of zero-rated
supply on payment of integrated tax.
4.
Whether bond or Letter
of Undertaking (LUT) is required in the case of zero rated supply of exempted
or non-GST goods and whether refund can be claimed by the exporter of exempted
or non-GST goods?
Clarification
As per section 16(2) of the IGST Act, credit of input tax may be
availed for making zero rated supplies, notwithstanding that such supply is an
exempt supply. Whereas, as per section 2 (47) of the CGST Act, exempt supply
includes non-taxable supply. Further, as per section 16(3) of the IGST Act, a
registered person making zero rated supply shall be eligible to claim refund
when he either makes supply of goods or services or both under bond or letter of
undertaking (LUT) or makes such supply on payment of integrated tax.
However, in case of zero rated supply of exempted or non-GST goods,
the requirement for furnishing a bond or LUT cannot be insisted upon. It is
thus, 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.
Such registered persons exporting nonGST goods shall comply with the
requirements prescribed under the existing law (i.e. Central Excise Act, 1944
or the VAT law of the respective State) or under the Customs Act, 1962, if any.
Further, the exporter would be eligible for refund of unutilized
input tax credit of central tax, state tax, union territory tax, integrated tax
and compensation cess in such cases.
5.
What is the scope of
the restriction imposed by rule 96(10) of the CGST Rules, regarding
non-availment of the benefit of notification Nos. 48/2017-Central Tax dated the
18.10.2017, 40/2017-Central Tax (Rate) dated 23.10.2017, 41/2017-Integrated Tax
(Rate) dated 23.10.2017, 78/2017-Customs dated 13.10.2017 or 79/2017-Customs
dated 13.10.2017?
Clarification
Sub-rule (10) of rule 96 of the CGST Rules seeks to prevent an
exporter, who is receiving goods from suppliers availing the benefit of certain
specified notifications under which they supply goods without payment of tax or
at reduced rate of tax, from exporting goods under payment of integrated tax.
This is to ensure that the exporter does not utilise the input tax credit
availed on other domestic supplies received for making the payment of integrated
tax on export of goods.
However, the said restriction is not applicable to an exporter who
has procured goods from suppliers who have not availed the benefits of the specified
notifications for making their outward supplies. Further, the said restriction
is also not applicable to an exporter who has procured goods from suppliers who
have, in turn, received goods from registered persons availing the benefits of
these notifications since the exporter did not directly procure these goods
without payment of tax or at reduced rate of tax.
Thus, the restriction under sub-rule (10) of rule 96 of the CGST
Rules is only applicable to those exporters who are directly receiving goods
from those suppliers who are availing the benefit under notification No.
48/2017-Central Tax dated the 18th October, 2017, notification No. 40/2017-Central
Tax (Rate) dated the 23rd October, 2017, or notification No. 41/2017-Integrated
Tax (Rate) dated the 23rd October, 2017 or notification No. 78/2017- Customs
dated the 13th October, 2017 or notification No. 79/2017-Customs dated the 13th
October, 2017.
Further, there might be a scenario where a manufacturer might have
imported capital goods by availing the benefit of Notification No. 78/2017-Customs
dated 13.10.2017 or 79/2017-Customs dated 13.10.2017. Thereafter, goods
manufactured from such capital goods may be supplied to an exporter. It is
hereby clarified that this restriction does not apply to such inward supplies
of an exporter.
No comments:
Post a Comment