TMI BlogClarification on refund related issues.X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, in exercise of its powers conferred by section 168 of the Himachal Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as HPGST Act ), I hereby clarify the issues detailed hereunder: Physical submission of refund claims with jurisdictional proper officer: 2. Due to the non-availability of the complete electronic refund module, a work around was prescribed vide Circular No. 17/17/2017-GST issued vide No. 12-28/2017-18-EXN-GST-1810 dated 17th January, 2018 and Circular No. 24/24/2017-GST issued vide No. 12-28/2017-18-EXN-GST-3280 dated 3rd February, 2018, wherein a taxpayer was required to file FORM GST RFD-01A on the common portal, generate the Acknowledgement Receipt Number (ARN), take print-outs of the same, and submit it physically in the office of the jurisdictional proper officer, along with all the supporting documents. It has been learnt that this requirement of physical submission of documents in the jurisdictional tax office is causing undue hardship to the taxpayers. Therefore, in order to further simplify the refund process, the following instructions, in partial modification of the aforesaid circulars, are issued: a) Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictional tax office for the submission of the refund application. Accordingly, the acknowledgement for the complete application or deficiency memo, as the case may be, would be issued by the jurisdictional tax officer based on the documents so received electronically from the common portal. However, the said acknowledgement or deficiency memo shall continue to be issued manually for the time being. e) If a refund application is electronically transferred to the wrong jurisdictional officer, he/she shall reassign it to the correct jurisdictional officer electronically within a period of three days. In such cases, the application shall be deemed to have been filed under rule 90(2) of the HPGST Rules only after it has been so reassigned. Deficiency memos shall not be issued in such cases merely on the ground that the applications were received electronically in the wrong jurisdiction. Where the facility of electronic re-assignment is not available, the present arrangement shall continue. f) It has already been clarified vide Circular No. 70/44/2018-GST that after the issuance of a deficiency memo, taxpayers would be required to submit the rectified refund application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 per cent GST) to manufacture output Y (attracting 12 per cent GST). ii. The refund of accumulated ITC in the situation at (i) above, will be available under section 54(3) of the HPGST Act read with rule 89(5) of the HPGST Rules, which prescribes the formula for the maximum refund amount permissible in such situations. iii. Further assume that the claimant supplies the output Y having value of ₹ 3,000/- during the relevant period for which the refund is being claimed. Therefore, the turnover of inverted rated supply of goods and services will be ₹ 3,000/-. Since the claimant has no other outward supplies, his adjusted total turnover will also be ₹ 3,000/-. iv. If we assume that Input A, having value of ₹ 500/- and Input B, having value of ₹ 2,000/-, have been purchased in the relevant period for the manufacture of Y, then Net ITC shall be equal to ₹ 385/- (₹ 25/- and ₹ 360/- on Input A and Input B respectively). v. Therefore, multiplying Net ITC by the ratio of turnover of inverted rated supply of goods and services to the adjusted total turnover will give the figure of ₹ 385/-. vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e laid down: a) All refund applications in which the amount claimed is less than the statutory limit of ₹ 1,000/-should be rejected and the amount re-credited to the electronic credit ledger of the applicant through the issuance of FORM GST RFD-01B. b) For all applications wherein an amount greater than ₹ 1000/- has been claimed, a list of applications which have not been received in the jurisdictional tax office within a period of 60 days starting from the date of generation of ARN may be compiled. A communication may be sent to all such claimants on their registered email ids, informing that the application needs to be physical submitted to the jurisdictional tax office within 15 days of the date of the email. The contact details and the address of the jurisdictional officer may also be provided in the said communication. The claimant may be further informed that if he/she fails to physically submit the application within 15 days of the date of the email, the application shall be summarily rejected and the debited amount, if any, shall be re-credited to the electronic credit ledger. 7. For the applications generated on the common portal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ITC accumulated on account of exports for the month of July, 2018 and includes the said accumulated ITC for the month of July, 2018. How should the amount of compensation cess to be refunded be calculated? Clarification: In the instant case, refund on account of compensation cess is to be recomputed as if the same was available in the respective months in which the refund of unutilized credit of CGST/SGST/UTGST/IGST was claimed on account of exports made under LUT/Bond. If the aggregate of these recomputed amounts of refund of compensation cess is less than or equal to the eligible refund of compensation cess calculated in respect of the month in which the same has actually been claimed, then the aggregate of the recomputed refund of compensation cess of the respective months would be admissible. Further, the recomputed amount of eligible refund (of compensation cess) in respect of past periods, as aforesaid, would not be admissible in respect of consignments exported on payment of IGST. This process would be applicable for application for refund of compensation cess (not claimed earlier) in respect of the past period. b) Issue: A registered person uses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r officer should sanction ₹ 50/- as the refund amount or ₹ 25/- (i.e. half of the ITC availed after adjusting for reversals)? Clarification: ITC which is reversed cannot be held to have been 'availed' in the relevant period. Therefore, the same cannot be part of refund of unutilized ITC on account of zero-rated supplies. Moreover, the reversed ITC has been accounted as a cost which would have reduced the income tax liability of the claimant. Therefore, the same amount cannot, at the same time, be refunded to him/her in the ratio of export turnover to total turnover. However, if the said reversed amount is again availed in a later tax period, subject to the restriction under section 16(4) of the HPGST Act, it can be refunded in the ratio of export turnover to total turnover in that tax period in the same manner as detailed in para 9(a) above. This is subject to the restriction that the accounting entry showing the said ITC as cost is also reversed. Non-consideration of ITC of GST paid on invoices of earlier tax period availed in subsequent tax period: 10. Presently, ITC is reflected in the electronic credit ledger on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ITC, even though the value of these goods has not been capitalized in his books of account by the claimant. 13. In relation to the above, it is clarified that the input tax credit of the GST paid on inputs shall be available to a registered person as long as he/she uses or intends to use such inputs for the purposes of his/her business and there is no specific restriction on the availment of such ITC anywhere else in the GST Act. The GST paid on inward supplies of stores and spares, packing materials etc. shall be available as ITC as long as these inputs are used for the purpose of the business and/or for effecting taxable supplies, including zero-rated supplies, and the ITC for such inputs is not restricted under section 17(5) of the HPGST Act. Further, capital goods have been clearly defined in section 2(19) of the HPGST Act as goods whose value has been capitalized in the books of account and which are used or intended to be used in the course or furtherance of business. Stores and spares, the expenditure on which has been charged as a revenue expense in the books of account, cannot be held to be capital goods. Refund of accumulated ITC of input services an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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