TMI BlogClarifications on exports related refund issues - regardingX X X X Extracts X X X X X X X X Extracts X X X X ..... 8.0 of Circular No. 05/2018-GST, dated 11th January 2018. In the said paragraph, reference to section 54(3)(ii) of the DGST Act is a typographical error and it should be read as section 54(3) (i) of the DGST Act . It may be noted that in the said circular reference has been made only to central tax, integrated tax, State / Union territory tax and not to customs duty leviable under the Customs Act, 1962. Therefore, a supplier availing drawback only with respect to basic customs duty shall be eligible for refund of unutilized input tax credit of central tax / State tax / Union territory tax / integrated tax / compensation cess under the said provision. It is further clarified that refund of eligible credit on account of State tax shall be available even if the supplier of goods or services or both has availed of drawback in respect of central tax. 3. Amendment through Table 9 GSTR-1: It has been reported that refund claims are not being processed on account of mis-matches among data contained in FORM GSTR-1, FORM GSTR-3B and shipping bills/bills of export. In this connection, it may be noted that the facility of filing of Table 9 in FORM GSTR-1 , an amendment table which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 5.1. It has been reported that the exporters have been asked to pay integrated tax where the goods have been exported but not within three months from the date of the issue of the invoice for export. In this regard, it is emphasised that exports have been zero rated under the Integrated Goods and Services Tax Act, 2017 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) of the GOI Circular No. 8/8/2017-GST dated 4th October, 2017, mentions that a person intending to export under LUT is required to give a self-declaration at the time of submission of LUT that he has not been prosecuted. Persons who are not eligible to export under LUT are required to export under bond. 7.2. It is clarified that this requirement is already satisfied in case of exports under LUT and asking for self-declaration with every refund claim where the exports have been made under LUT is not warranted. 8. Refund of transitional credit : Refund of unutilized input tax credit is allowed in two scenarios mentioned in sub-section (3) of section 54 of the DGST Act. These two scenarios are zero rated supplies made without payment of tax and inverted tax structure. In sub-rule (4) and (5) of rule 89 of the DGST Rules, the amount of refund under these scenarios is to be calculated using the formulae given in the said sub-rules. The formulae use the phrase 'Net ITC' and defines the same as 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-crediting input tax credit, while processing claims of refund filed under the existing laws. In this regard, attention is invited to sub-section (3) of section 142 of the DGST Act which provides that the amount of refund arising out of such claims shall be refunded in cash. Further, the first proviso to the said sub-section provides that where any claim for refund of the amount of input tax credit is fully or partially rejected, the amount so rejected shall lapse and therefore, will not be transitioned into GST. Furthermore, it should be ensured that no refund of the amount of input tax credit is granted in case the said amount has been transitioned under GST. The Proper Officers are advised to process such refund applications accordingly. 11. Filing frequency of Refunds : Various representations have been made regarding the period for which refund applications can be filed. Section 2(107) of the DGST Act defines the term tax period as the period for which the return is required to be furnished. The terms 'Net ITC' and 'turnover of zero rated supply of goods/services' are used in the context of the relevant period in rule 89(4) of DGST Rules. The phrase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods may be procured at the normal applicable tax rate. 13.2. It is also 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 as per the provisions of clause (ii) of the first proviso to sub-section (3) of section 54 of the DGST Act. [t may also be noted that the exporter of such goods can export the goods only under LUT / bond and cannot export on payment of integrated tax. In this connection, notification No. 3/2018-State Tax, dated 31.01.2018 may be referred. 14. Requirement of invoices for processing of claims for refund : It has been brought to the notice that for processing of refund claims, copies of invoices and other additional information are being insisted upon by many field formations. 14.1. It was envisaged that only the specified statements would be required for processing of refund claims because the details of outward supplies and inward supplies would be available on the common portal which would be matched. Most of the other information like shipping bills details etc. would al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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