Circular No. 94/13/2019-GST
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F. No. CBEC-20/16/04/2018 – GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
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New Delhi, Dated the 28
th
March, 2019
To,
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All)
The Principal Director Generals / Director Generals (All)
Madam/Sir,
Subject: Clarifications on refund related issues under GST– Reg.
Various representations have been received seeking clarifications on certain issues
relating to refund. In order to clarify these issues and to ensure uniformity in the
implementation of the provisions of law across the field formations, the Board, in exercise of
its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as “CGST Act”), hereby clarifies the issues as detailed hereunder:
Sl.
No.
Issue Clarification
1. Certain registered persons have reversed,
through return in FORM GSTR-3B filed
for the month of August, 2018 or for a
subsequent month, the accumulated input
tax credit (ITC) required to be lapsed in
terms of notification No. 20/2018-
Central Tax (Rate) dated 26.07.2018
read with circular No. 56/30/2018-GST
dated 24.08.2018 (hereinafter referred to
as the “said notification”). Some of these
registered persons, who have attempted
to claim refund of accumulated ITC on
account of inverted tax structure for the
same period in which the ITC required to
be lapsed in terms of the said notification
a) As a one-time measure to resolve this
issue, refund of accumulated ITC on
account of inverted tax structure, for
the period(s) in which there is
reversal of the ITC required to be
lapsed in terms of the said
notification, is to be claimed under
the category “any other” instead of
under the category “refund of
unutilized ITC on account of
accumulation due to inverted tax
structure” in FORM GST RFD-01A.
It is emphasized that this application
for refund should relate to the same
tax period in which such reversal has
Circular No. 94/13/2019-GST
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has been reversed, are not able to claim
refund of accumulated ITC to the extent
to which they are so eligible. This is
because of a validation check on the
common portal which prevents the value
of input tax credit in Statement 1A of
FORM GST RFD -01Afrom being
higher than the amount of ITC availed in
FORM GSTR-3B of the relevant period
minus the value of ITC reversed in the
same period. This results in registered
persons being unable to claim the full
amount of refund of accumulated ITC on
account of inverted tax structure to
which they might be otherwise eligible.
What is the solution to this problem?
been made.
b) The application shall be accompanied
by all statements, declarations,
undertakings and other documents
which are statutorily required to be
submitted with a “refund claim of
unutilized ITC on account of
accumulation due to inverted tax
structure”. On receiving the said
application, the proper officer shall
himself calculate the refund amount
admissible as per rule 89(5) of
Central Goods and Services Tax
Rules, 2017 (hereinafter referred to as
“CGST Rules”), in the manner
detailed in para 3 of Circular No.
59/33/2018-GST dated 04.09.2018.
After calculating the admissible
refund amount, as described above,
and scrutinizing the application for
completeness and eligibility, if the
proper officer is satisfied that the
whole or any part of the amount
claimed is payable as refund, he shall
request the taxpayer, in writing, to
debit the said amount from his
electronic credit ledger through
FORM GST DRC -03. Once the
proof of such debit is received by the
proper officer, he shall proceed to
issue the refund order in FORM GST
RFD-06 and the payment advice in
FORM GST RFD-05.
c) All refund applications for unutilized
ITC on account of accumulation due
to inverted tax structure for
subsequent tax period(s) shall be filed
in FORM GST RFD-01A under the
category “refund of unutilized ITC on
account of accumulation due to
inverted tax structure”.
2. The clarification at Sl. No. 1 above applies
to registered persons who have already
It is hereby clarified that all those
registered persons required to make the
Circular No. 94/13/2019-GST
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reversed the ITC required to be lapsed in
terms of the said notification through
return in FORM GSTR-3B. What about
those registered persons who are yet to
perform this reversal?
reversal in terms of the said notification
and who have not yet done so, may
reverse the said amount through FORM
GST DRC-03 instead of through FORM
GSTR-3B.
3. What shall be the consequence if any
registered person reverses the amount of
credit to be lapsed, in terms the said
notification, through the return in FORM
GSTR-3B for any month subsequent to
August, 2018 or through FORM GST
DRC-03 subsequent to the due date of
filing of the return in FORM GSTR-3B
for the month of August, 2018?
a) As the registered person has reversed
the amount of credit to be lapsed in
the return in FORM GSTR-3B for
a month subsequent to the month of
August, 2018 or through FORM
GST DRC-03 subsequent to the due
date of filing of the return in FORM
GSTR-3B for the month of August,
2018, he shall be liable to pay
interest under sub-section (1) of
section 50 of the CGST Act on the
amount which has been reversed
belatedly. Such interest shall be
calculated starting from the due date
of filing of return in FORM GSTR-
3B for the month of August, 2018
till the date of reversal of said
amount through FORM GSTR-3B
or through FORM GST DRC -03,
as the case may be.
b) The registered person who has
reversed the amount of credit to be
lapsed in the return in FORM
GSTR-3B for any month subsequent
to August, 2018 or through FORM
GST DRC-03 subsequent to the due
date of filing of the return in FORM
GSTR-3B for the month of August,
2018 would remain eligible to claim
refund of unutilized ITC on account
of accumulation due to inverted tax
structure w.e.f. 01.08.2018. However,
such refund shall be granted only after
the reversal of the amount of credit to
be lapsed, either through FORM
GSTR-3B or FORM GST DRC-03,
along with payment of interest, as
applicable.
Circular No. 94/13/2019-GST
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4. How should a merchant exporter claim
refund of input tax credit availed on
supplies received on which the supplier has
availed the benefit of the Government of
India, Ministry of Finance, notification No.
40/2017-Central Tax (Rate), dated the 23rd
October, 2017, published in the Gazette of
India, Extraordinary, Part II, Section 3,
Sub-section (i), vide number G.S.R 1320
(E), dated the 23rd October, 2017 or
notification No. 41/2017-Integrated Tax
(Rate), dated the 23rd October, 2017,
published in the Gazette of India,
Extraordinary, Part II, Section 3, Sub-
section (i), vide number G.S.R 1321(E),
dated the 23rd October, 2017 (hereinafter
referred to as the “said notifications”)?
a) Rule 89(4B) of the CGST Rules
provides that where the person
claiming refund of unutilized input
tax credit on account of zero-rated
supplies without payment of tax has
received supplies on which the
supplier has availed the benefit of
the said notifications, the refund of
input tax credit, availed in respect
of such inputs received under the
said notifications for export of
goods, shall be granted.
b) This refund of accumulated ITC
under rule 89(4B) of the CGST
Rules shall be applied under the
category “any other” instead of under
the category “refund of unutilized
ITC on account of exports without
payment of tax” in FORM GST
RFD-01A and shall be accompanied
by all supporting documents
required for substantiating the
refund claim under the category
“refund of unutilized ITC on account
of exports without payment of tax”.
After scrutinizing the application for
completeness and eligibility, if the
proper officer is satisfied that the
whole or any part of the amount
claimed is payable as refund, he shall
request the taxpayer, in writing, to
debit the said amount from his
electronic credit ledger through
FORM GST DRC -03. Once the
proof of such debit is received by the
proper officer, he shall proceed to
issue the refund order in FORM GST
RFD-06 and the payment advice in
FORM GST RFD-05.
5. Vide Circular No. 59/33/2018-GST dated
04.09.2018, it was clarified that after
issuance of a deficiency memo, the input
tax credit is required to be re-credited
In such cases, the claimant may re-
submit the refund application manually
in FORM GST RFD-01A after
correction of deficiencies pointed out in
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through FORM GST RFD -01B and the
taxpayer is expected to file a fresh
application for refund. Accordingly, in
several cases, the ITC amounts were re-
credited after issuance of deficiency
memo. However, it was later represented
that the common portal does not allow a
taxpayer to file a fresh application for the
same period after issuance of a deficiency
memo. Therefore, the matter was re-
examined and it was subsequently
clarified, vide Circular No. 70/44/2018-
GST dated 26.10.2018 that no re-credit
should be carried out in such cases and
taxpayers should file the rectified
application, after issuance of the deficiency
memo, under the earlier ARN only. It was
also further clarified that a suitable
clarification would be issued separately for
cases in which such re-credit has already
been carried out. However, no such
clarification has yet been issued and
several refund claims are pending on this
account.
the deficiency memo, using the same
ARN. The proper officer shall then
proceed to process the refund application
as per the existing guidelines. After
scrutinizing the application for
completeness and eligibility, if the
proper officer is satisfied that the whole
or any part of the amount claimed is
payable as refund, he shall request the
taxpayer, in writing, to debit the said
amount from his electronic credit ledger
through FORM GST DRC-03. Once the
proof of such debit is received by the
officer, he shall proceed to issue the
refund order in FORM GST RFD -06
and the payment advice in FORM GST
RFD-05.
2. It is requested that suitable trade notices may be issued to publicize the contents of
this Circular.
3. Difficulty, if any, in implementation of this Circular may please be brought to the
notice of the Board. Hindi version would follow.
(Upender Gupta)
Principal Commissioner (GST)
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