Background:
Earlier, the 50th Meeting of the GST Council was held on July 11, 2023 in New Delhi, wherein it was recommended to notify provisions of Section 123 of the Finance Act, 2021, amending Section 16 of the IGST Act, to be notified with effect from October 01, 2023.
Notification:
Now, the CBIC vide Notification No. 27/2023- Central Tax dated July 31, 2023, in exercise of the powers conferred by clause (b) of sub-section (2) of Section 1 of the Finance Act, 2021 (13 of 2021), appoints October 01, 2023, as the date on which the provisions of section 123 of the said Act shall come into force.
Section 16 of the IGST Act after Substitution vide Section 123 of The Finance Act, 2021 dated March 28, 2021 w.e.f. October 01, 2023, will read as follows:
“(3) A registered person making zero rated supply shall be eligible to claim refund of unutilised input tax credit on supply of goods or services or both, without payment of integrated tax, under bond or Letter of Undertaking, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder, subject to such conditions, safeguards and procedure as may be prescribed:
Provided that the registered person making zero rated supply of goods shall, in case of non-realisation of sale proceeds, be liable to deposit the refund so received under this sub-section along with the applicable interest under section 50 of the Central Goods and Services Tax Act within thirty days after the expiry of the time limit prescribed under the Foreign Exchange Management Act, 1999 (42 of 1999.) for receipt of foreign exchange remittances, in such manner as may be prescribed.
(4) The Government may, on the recommendation of the Council, and subject to such conditions, safeguards and procedures, by notification, specify—
(i) a class of persons who may make zero rated supply on payment of integrated tax and claim refund of the tax so paid;
(ii) a class of goods or services which may be exported on payment of integrated tax and the supplier of such goods or services may claim the refund of tax so paid.”
The Provision before the amendment reads as follows :
“(3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:—
(a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or
(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.”
The Notification can be accessed at: https://taxinformation.cbic.gov.in/view-pdf/1009805/ENG/Notifications
(Author can be reached at info@a2ztaxcorp.com)
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