TMI BlogProcessing of refund under the GST.X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain instructions about processing of refund under the GST Act were issued. 2.2. Vide said Trade Circular in Paragraph 1.5 and Paragraph 4 instructions were given to the Nodal Officers regarding the information/data about refund i.e. Input Tax Credit, Turn-over in GSTR-1 and GSTR-3B etc. to be provided by the Economic Intelligence Unit (EIU) and the procedure to be followed while carrying out refund Audit, respectively. The said Para s i.e. 1.5 and 4 are hereby deleted and revised instructions with regards to the initiation of Audit is being issued separately. 3. Submission of invoices for processing of claims of refund: 3.1. It was clarified vide Para No. 16 of the Trade Circular No. 17T of 2018 dated the 2nd June 2018 (See Circular No. 37/11/2018-GST dated 15th March, 2018 issued by the CBIC) 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is to be debited from the other electronic credit ledger (i.e., State tax/Union Territory tax, in this case). 4.3. The procedure described in para 3.2 above, however, is not presently available on the common portal. Till the time such facility is made available on the common portal, the taxpayers are advised to follow the order as explained above for all refund applications. However, for applications already filed and pending with the tax authorities, where this order is not adhered to by the claimant, no adverse view may be taken by the tax authorities. 4.4. 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. 4.5. 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 4.2 (read with para 4.3) above, and the ARN is generated on the common portal. 5. Re-credit of electronic credit ledger in case of rejection of refund claim: 5.1. In case of rejection of claim for refund of unutilized input tax credit on account of ineligibility of the said credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rospectively by notification No. 39/2018-State Tax, dated 18.09.2018 provides that registered persons, including importers, who are directly purchasing/importing supplies on which the benefit of reduced tax incidence or no tax incidence under certain specified notifications has been availed, shall not be eligible for refund of integrated tax paid on export of goods or services. For example, an importer (X) who is importing goods under the benefit of Advance Authorization/EPCG, is directly purchasing /importing supplies on which the benefit of reduced/Nil incidence of tax under the specified notifications has been availed. In this case, the restriction under rule 96(10) of the MGST Rules is applicable to X. However, if X supplies the said goods, after importation, to a domestic buyer (Y), on payment of full tax, then Y can rightfully export these goods under payment of integrated tax and claim refund of the integrated tax so paid. However, in the said example if Y purchases these goods from X after availing the benefit of specified notifications, then Y also will not be eligible to claim refund of integrated tax paid on export of goods or services. 6.2. Overall, it is clarified t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in FORM GST RFD-03 , requiring him to file a fresh refund application after rectification of such deficiencies. Further, rule 93(1) of the MGST 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. 8.2. It has been learnt that certain field formations are issuing show cause notices to the claimants in cases where the refund application is not re-submitted after the issuance of a deficiency memo. These show-cause-notices are being subsequently adjudicated and orders are being passed in FORM GST RFD-04/06 . It is clarified that show-cause-notices are not required to be issued where deficiency memos have been issued. A refund application which is re-submitted after the issuance of a deficiency memo shall have to be treated as a fresh application. No order in FORM GST RFD-04/ 06 can be issued in respect of an application against which a deficiency memo has been issued and which has not been resubmitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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