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TMI BlogClarification on refund related issues.X X X X Extracts X X X X X X X X Extracts X X X X ..... es for processing of claims of refund. 2.1 It was clarified vide Circular No. 37/2018-GST effective from 15th March, 2018 that since the refund claims were being filed in a semi-electronic environment and the processing was completely based on the information provided by the claimants, it becomes necessary that invoices are scrutinized. Accordingly, it was clarified that the invoices relating to inputs, input services and capital goods were to be submitted for processing of claims for refund of integrated tax where services are exported with payment of integrated tax; and invoices relating to inputs and input services were to be submitted for processing of claims for refund of input tax credit where goods or services are exported without p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the application for refund claim in FORM GST RFD-01A and the Application Reference Number (ARN). The claimant shall also declare the eligibility or otherwise of the input tax credit availed against the invoices related to the claim period in the said Annexure for enabling the proper officer to determine the same. 3. System validations in calculating refund amount 3.1. Currently, in case of refund of unutilized input tax credit (ITC for short), the common portal calculates the refundable amount as the least of the following amounts: a) The maximum refund amount as per the formula in rule 89(4) or rule 89(5) of the Gujarat Goods and Services Tax Rules, 2017 (hereinafter referred to as the "GGST Rules") [formula is applied on the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.4. The above system validations are being clarified so that there is no ambiguity in relation to the process through which an application in FORM GST RFD-01A is generated. 3.5. Further, it may be noted that the refund application can be filed only after the electronic credit ledger has been debited in the manner specified in para 3.2 (read with para 3.3) above, and the ARN is generated on the common portal. 4. Re-credit of electronic credit ledger in case of rejection of refund claim: 4.1. In case of rejection of claim for refund of unutilized input tax credit on account of ineligibility of the said credit under sub-sections (1),(2) or (5) of section 17 of the GGST Act, or under any other provision of the Act and rules made thereunder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een laid down in rule 93 of the GGST Rules. 4.3. Consider an example where against a refund claim of ₹ 100, only ₹ 80 is sanctioned (Rs.15 is rejected on account of ineligible ITC and ₹ 5 is rejected on account of any other reason). As described above, ₹ 15 would be re-credited with simultaneous issue of notice under section 73 or 74 of the GGST Act for recovery of ineligible ITC. ₹ 5 would be re-credited (through FORM GST RFD-01B) only after the receipt of an undertaking from the claimant to the effect that he shall not file an appeal or in case he files an appeal, the same is finally decided against the claimant. 5. Scope of rule 96(10) of the GGST Rules: 5.1 Rule 96(10) of the GGST Rules, as amended retro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se purchasers/importers who are directly purchasing/importing supplies on which the benefit of certain notifications, as specified in the said sub-rule, has been availed. 6. Disbursal of refund amount after sanctioning by the proper officer: 6.1 A few cases have come to notice where a tax authority, after receiving a sanction order from the counter part tax authority (Centre or State), has refused to disburse the relevant sanctioned amount calling into question the validity of the sanction order on certain grounds. E.g. a tax officer of one administration has sanctioned, on a provisional basis, 90 per cent. of the amount claimed in a refund application for unutilized ITC on account of exports. On receipt of the provisional sanction order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to file a fresh refund application after rectification of such deficiencies. Further, rule 93(1) of the GGST Rules provides that where any deficiencies have been communicated under rule 90(3), the amount debited under rule 89 (3) shall be re-credited to the electronic credit ledger. Therefore, the intent of the law is very clear that in case a deficiency memo in FORM GST RFD-03 has been issued, the refund claim will have to be filed afresh. 7.2 It has been learnt that certain field formations are issuing show cause notices to the claimants in cases where the refund application is not resubmitted after the issuance of a deficiency memo. These show-cause-notices are being subsequently adjudicated and orders are being passed in FORM GST ..... X X X X Extracts X X X X X X X X Extracts X X X X
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