Circular No. 137/07/2020-GST
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CBEC-20/06/04-2020 -GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, dated the 13th April, 2020
To
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All)
The Principal Director Generals / Director Generals (All)
Madam/Sir,
Subject: Clarification in respect of certain challenges faced by the registered persons in
implementation of provisions of GST Laws-reg.
Circular No.136/06/2020-GST, dated 03.04.2020 had been issued to clarify doubts
regarding relief measures taken by the Government for facilitating taxpayers in meeting the
compliance requirements under various provisions of the Central Goods and Services Tax Act,
2017 (hereinafter referred to as the “CGST Act”) on account of the measures taken to prevent
the spread of Novel Corona Virus (COVID-19). It has been brought to the notice of the Board
that certain challenges are being faced by taxpayers in adhering to the compliance requirements
under various other provisions of the CGST Act which also need to be clarified.
2. The issues raised have been examined and in order to ensure uniformity in the
implementation of the provisions of the law across the field formations, the Board, in exercise
of its powers conferred under section 168(1) of the CGST Act hereby clarifies as under:
S.
No.
Issue Clarification
1. An advance is received
by a supplier for a
Service contract which
subsequently got
cancelled. The
supplier has issued the
invoice before supply
of service and paid the
GST thereon.
Whether he can claim
refund of tax paid or is
he required to adjust
In case GST is paid by the supplier on advances received for
a future event which got cancelled subsequently and for
which invoice is issued before supply of service, the supplier
is required to issue a “credit note” in terms of section 34 of
the CGST Act. He shall declare the details of such credit
notes in the return for the month during which such credit
note has been issued. The tax liability shall be adjusted in
the return subject to conditions of section 34 of the CGST
Act. There is no need to file a separate refund claim.
However, in cases where there is no output liability against
which a credit note can be adjusted, registered persons may
Circular No. 137/07/2020-GST
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his tax liability in his
returns ?
proceed to file a claim under “Excess payment of tax, if any”
through FORM GST RFD-01.
2. An advance is received
by a supplier for a
Service contract which
got cancelled
subsequently. The
supplier has issued
receipt voucher and
paid the GST on such
advance received.
Whether he can claim
refund of tax paid on
advance or he is
required to adjust his
tax liability in his
returns?
In case GST is paid by the supplier on advances received for
an event which got cancelled subsequently and for which no
invoice has been issued in terms of section 31 (2) of the
CGST Act, he is required to issue a “refund voucher” in
terms of section 31 (3) (e) of the CGST Act read with rule
51 of the CGST Rules.
The taxpayer can apply for refund of GST paid on such
advances by filing FORM GST RFD-01 under the category
“Refund of excess payment of tax”.
3. Goods supplied by a
supplier under cover
of a tax invoice are
returned by the
recipient. Whether he
can claim refund of
tax paid or is he
required to adjust his
tax liability in his
returns ?
In such a case where the goods supplied by a supplier are
returned by the recipient and where tax invoice had been
issued, the supplier is required to issue a “credit note” in
terms of section 34 of the CGST Act. He shall declare the
details of such credit notes in the return for the month during
which such credit note has been issued. The tax liability shall
be adjusted in the return subject to conditions of section 34
of the CGST Act. There is no need to file a separate refund
claim in such a case.
However, in cases where there is no output liability against
which a credit note can be adjusted, registered persons may
proceed to file a claim under “Excess payment of tax, if any”
through FORM GST RFD-01.
4. Letter of Undertaking
(LUT) furnished for
the purposes of zero-
rated supplies as per
provisions of section
16 of the Integrated
Goods and Services
Tax Act, 2017 read
with rule 96A of the
CGST Rules has
expired on 31.03.2020.
Whether a registered
person can still make a
zero-rated supply on
such LUT and claim
refund accordingly or
does he have to make
Notification No. 37/2017-Central Tax, dated 04.10.2017,
requires LUT to be furnished for a financial year. However,
in terms of notification No. 35/2020 Central Tax dated
03.04.2020, where the requirement under the GST Law for
furnishing of any report, document, return, statement or such
other record falls during between the period from
20.03.2020 to 29.06.2020, has been extended till
30.06.2020.
Therefore, in terms of Notification No. 35/2020-Central
Tax, time limit for filing of LUT for the year 2020-21 shall
stand extended to 30.06.2020 and the taxpayer can continue
to make the supply without payment of tax under LUT
provided that the FORM GST RFD-11 for 2020-21 is
furnished on or before 30.06.2020. Taxpayers may quote the
reference no of the LUT for the year 2019-20 in the relevant
documents.
Circular No. 137/07/2020-GST
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such supplies on
payment of IGST and
claim refund of such
IGST ?
5. While making the
payment to recipient,
amount equivalent to
one per cent was
deducted as per the
provisions of section
51 of Central Goods
and Services Tax Act,
2017 i. e. Tax
Deducted at Source
(TDS). Whether the
date of deposit of such
payment has also been
extended vide
notification N.
35/2020-Central Tax
dated 03.04.2020?
As per notification No. 35/2020-Central Tax dated
03.04.2020, where the timeline for any compliance required
as per sub-section (3) of section 39 and section 51 of the
Central Goods and Services Tax Act, 2017 falls during the
period from 20.03.2020 to 29.06.2020, the same has been
extended till 30.06.2020. Accordingly, the due date for
furnishing of return in FORM GSTR-7 along with deposit
of tax deducted for the said period has also been extended
till 30.06.2020 and no interest under section 50 shall be
leviable if tax deducted is deposited by 30.06.2020.
6. As per section 54 (1), a
person is required to
make an application
before expiry of two
years from the
relevant date. If in a
particular case, date
for making an
application for refund
expires on 31.03.2020,
can such person make
an application for
refund before
29.07.2020?
As per notification No. 35/2020-Central Tax dated
03.04.2020, where the timeline for any compliance required
as per sub-section (1) of section 54 of the Central Goods
and Services Tax Act, 2017 falls during the period from
20.03.2020 to 29.06.2020, the same has been extended till
30.06.2020. Accordingly, the due date for filing an
application for refund falling during the said period has also
been extended till 30.06.2020.
4. It is requested that suitable trade notices may be issued to publicize the contents of this
circular.
5. Difficulty, if any, in the implementation of the above instructions may please be
brought to the notice of the Board. Hindi version would follow.
(Yogendra Garg)
Principal Commissioner
y.garg@nic.in
