The Central Board of Indirect Taxes and Customs vide Circular No. 70/44/2018-GST dated October 26, 2018 has issued a clarification on certain issues pertaining to refund. The gist of the circular is as hereunder for the ease of understanding: –
- Status of refund claim after issuance of deficiency memo in FORM GST RFD-03 and re-credit of electronic credit ledger: Earlier it was clarified vide Circular No. 59/33/2018 – GST dated Sept 4, 2018 that once deficiency memo under Form GST RFD – 03 is issued in respect of a refund claim, then no show cause notices are required to be issued and the deficiency amount of Input Tax Credit debited under sub-rule (3) of rule 89 of CGST Rules 2017 is required to be recredited to the electronic credit ledger of the applicant by using FORM GST RFD-01B and the taxpayer is expected to file a fresh application for refund. But presently the common portal does not allow a taxpayer to file a fresh application for refund once a deficiency memo in Form GST RFD – 03 has been issued against an earlier refund application for the same period.
Therefore, until the facility is developed, taxpayers would be required to submit the rectified refund application under the earlier Application Reference Number (ARN) only. However, the rectified refund application would be accepted by the jurisdictional tax authorities with the earlier ARN itself.
Note: Re-credit in the electronic credit ledger in FORM GST RFD-01B is to be clarified later.
- Allowing exporters who have received capital goods under EPCG to claim refund of IGST paid on exports: As per Sub-rule (10) of Rule 96 of CGST Rules 2017 it restricts exporters from availing the facility of claiming refund of IGST paid on exports in certain scenarios. However, now any exporter who himself/herself imported any inputs/capital goods in terms of Notification Nos. 78/2017-Customs and 79/2017-Customs both dated Octobers 13, 2017 shall be eligible to claim refund of the IGST paid on exports till the date of the issuance of the notification No. 54/2018 – Central Tax dated October 9, 2018.
Further after the issuance of notification No. 54/2018 – Central Tax October 9, 2018, any exporters who are importing goods in terms of notification Nos. 78/2017- Customs and 79/2017-Customs both dated Octobers 13, 2017 would not be eligible for refund of IGST paid on exports as provided in the said sub-rule.
However, exporters who are receiving capital goods under the EPCG scheme, either through import in terms of N. No. 79/2017 – Customs dated October 13 2017 or through domestic procurement in terms of N. No. 48/2017 – Central Tax, dated October 18, 2017, shall continue to be eligible to claim refund of IGST paid on exports and would not be hit by the restrictions provided in the said sub-rule.
Circular can be accessed at: http://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular-No-70.pdf;jsessionid=9907AB7C60464AA5D59049CD8B64B7F8