Circular No. 17/17/2017 - GST
F. No. 349/169/2017-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
GST Policy Wing
New Delhi, Dated the 15
th
November, 2017
To,
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners
/ Commissioners of Central Tax (All)
The Principal Director Generals / Director Generals (All)
Madam/Sir,
Sub – Manual filing and processing of refund claims in respect of zero-rated
supplies - reg.
Due to the non-availability of the refund module on the common portal, it has
been decided by the competent authority, on the recommendations of the Council, that
the applications/documents/forms pertaining to refund claims on account of zero-rated
supplies shall be filed and processed manually till further orders. Therefore, in
exercise of the powers conferred by sub-section (1) of section 168 of the Central
Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’) and for
the purpose of ensuring uniformity, the following conditions and procedure are laid
down for the manual filing and processing of the refund claims:
2.1 As per sub-section (3) of section 16 of the Integrated Goods and Services Tax
Act, 2017 (hereinafter referred to as ‘the IGST Act’) read with clause (i) of sub-
section (3) and sub-section (6) of section 54 of the CGST Act and rules 89 to 96A of
the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as ‘the CGST
Rules’), a registered person may make zero-rated supplies of goods or services or both
on payment of integrated tax and claim refund of the tax so paid, or make zero-rated
supplies of goods or services or both under bond or Letter of Undertaking without
payment of integrated tax and claim refund of unutilized input tax credit in relation to
such zero rated supplies.
2.2 The refund of integrated tax paid on goods exported out of India is governed by
rule 96 of the CGST Rules. The shipping bill filed by an exporter shall be deemed to
be an application for refund in such cases. The application shall be deemed to have
been filed only when export manifest or export report is filed and the applicant has
furnished a valid return in FORM GSTR-3 or FORM GSTR-3B, as the case may be.
Upon receipt of the information regarding furnishing of a valid return in FORM
GSTR-3 or FORM GSTR-3B, as the case may be, from the common portal, the
system designated by the Customs shall process the claim for refund and an amount
equal to the integrated tax paid in respect of such export shall be electronically
credited to the bank account of the applicant. Any order regarding withholding of such
refund or its further sanction respectively in PART-B of FORM GST RFD-07 or
FORM GST RFD-06 shall be done manually till the refund module is operational on
the common portal.
2.3 The application for refund of integrated tax paid on zero-rated supply of goods
to a Special Economic Zone developer or a Special Economic Zone unit or in case of
zero-rated supply of services (that is, except the cases covered in paragraph 2.2 above
and para 2.4 below) is required to be filed in FORM GST RFD-01A (as notified in
the CGST Rules vide notification No. 55/2017 – Central Tax dated 15.11.2017) by the
supplier on the common portal and a print out of the said form shall be submitted
before the jurisdictional proper officer along with all necessary documentary
evidences as applicable (as per the details in statement 2 or 4 of Annexure to FORM
GST RFD – 01), within the time stipulated for filing of such refund under the CGST
Act.
2.4 The application for refund of unutilized input tax credit on inputs or input
services used in making such zero-rated supplies shall be filed in FORM GST RFD-
01A on the common portal and the amount claimed as refund shall get debited in
accordance with sub-rule (3) of rule 86 of the CGST Rules from the amount in the
electronic credit ledger to the extent of the claim. The common portal shall generate a
proof of debit (ARN- Acknowledgement Receipt Number) which would be mentioned
in the FORM GST RFD-01A submitted manually, along with the print out of FORM
GST RFD-01A to the jurisdictional proper officer, and with all necessary
documentary evidences as applicable (as per details in statement 3 or 5 of Annexure to
FORM GST RFD-01), within the time stipulated for filing of such refund under the
CGST Act.
2.5 The registered person needs to file the refund claim with the jurisdictional tax
authority to which the taxpayer has been assigned as per the administrative order
issued in this regard by the Chief Commissioner of Central Tax and the Commissioner
of State Tax. In case such an order has not been issued in the State, the registered
person is at liberty to apply for refund before the Central Tax Authority or State Tax
Authority till the administrative mechanism for assigning of taxpayers to respective
authority is implemented. However, in the latter case, an undertaking is required to be
submitted stating that the claim for sanction of refund has been made to only one of
the authorities. It is reiterated that the Central Tax officers shall facilitate the
processing of the refund claims of all registered persons whether or not such person
was registered with the Central Government in the earlier regime.
2.6 Once such a refund application in FORM GST RFD-01A is received in the
office of the jurisdictional proper officer, an entry shall be made in a refund register to
be maintained for this purpose with the following details –
Table 1
Sl.
No
.
Applicant’
s name
GSTI
N
Date of
receipt of
applicatio
n
Period
to
which
the
claim
pertain
s
Nature of
refund –
Refund of
integrated
tax
paid/Refun
d of
unutilized
ITC
Amoun
t of
refund
claime
d
Date of issue of
acknowledgme
nt in FORM
GST RFD-02
Date of
receipt of
complete
applicatio
n (as
mentioned
in FORM
GST
RFD-02)
1 2 3 4 5 6 7 8 9
2.7 Further, all communication in regard to the FORMS mentioned below shall be
done manually, within the timelines as specified in the relevant rules, till the module is
operational on the common portal, and all such communications shall also be recorded
appropriately in the refund register as discussed in the succeeding paragraphs –
Sl.No. FORM Details Relevant
provision of
the CGST
Rules, 2017
1. FORM GST RFD-02 Acknowledgement Rules 90(1)
and 90(2)
2. FORM GST RFD-03 Deficiency memo Rule 90(3)
3. FORM GST RFD-04 Provisional refund order Rule 91(2)
4. FORM GST RFD-05 Payment advice Rules 91(3),
92(4), 92(5)
and 94
5. FORM GST RFD-06 Refund sanction/Rejection
order
Rules 92(1),
92(3), 92(4),
92(5) and 96(7)
6. FORM GST RFD-07 Order for complete
adjustment/withholding of
sanctioned refund
Rules 92(1),
92(2) and 96(6)
7. FORM GST RFD-08 Notice for rejection of
application for refund
Rule 92(3)
8. FORM GST RFD-09 Reply to show cause notice Rule 92(3)
2.8 The processing of the claim till the provisional sanction of refund shall be
recorded in the refund register as in the table indicated below -
Table 2
Date of
issue of
Deficiency
Memo in
FORM
GST
RFD-03
Date of
receipt
of reply
from the
applicant
Date of issue of
provisional refund
order in FORM
GST-RFD-04
Amount
of
refund
claimed
Amount of provisional
refund sanctioned
Date of issue of
Payment Advice
in FORM GST
RFD-05
CT ST/UTT IT Cess
1 2 3 4 5 6 7 8 9
2.9 After the sanction of provisional refund, the claim shall be processed and the
final order issued within sixty days of the date of receipt of the complete application
form. The process shall be recorded in the refund register as in the table indicated
below -
Table 3
Date of
issue
of
notice,
if any
for
rejecti
on of
refund
in
FORM
Date
of
recei
pt of
reply,
if any
to
SCN
in
FOR
M
Date of issue
of Refund
sanction/rejec
tion order in
FORM GST
RFD-06
Total amount of
refund sanctioned
Date of
issue
of
Payme
nt
Advice
in
FORM
GST
RFD-
05
Amount of refund
rejected
Date of
issue of
order
for
adjustm
ent of
sanction
ed
refund/
withhol
ding
GST
RFD-
08
GST
RFD-
09
refund
in
FORM
GST
RFD-07
C
T
ST/UT
T
I
T
Ces
s
C
T
ST/UT
T
IT Ces
s
1 2 3 4 5 6 7 8 9 10 11 12 13
2.10 After the refund claim is processed in accordance with the provisions of the
CGST Act and the rules made thereunder and where any amount claimed as refund is
rejected under rule 92 of the CGST Rules, either fully or partly, the amount debited, to
the extent of rejection, shall be re-credited to the electronic credit ledger by an order
made in FORM GST PMT-03. The amount would be credited by the proper officer
using FORM GST RFD-01B (as notified in the CGST Rules vide notification No.
55/2017 – Central Tax dated 15.11.2017) subject to the provisions of rule 93 of the
CGST Rules.
3. For the sake of clarity and uniformity, the entire process of filing and
processing of refunds manually is tabulated as below:
3.1 Filing of Refund Claims:
Sl.
No.
Category of Refund Process of Filing
1. Refund of IGST paid on export of goods No separate application is required
as shipping bill itself will be
treated as application for refund.
2. Refund of IGST paid on export of services
/ zero rated supplies to SEZ units or SEZ
developers
Printout of FORM GST RFD -
01A needs to be filed manually
with the jurisdictional GST officer
(only at one place - Centre or
State) along with relevant
documentary evidences, wherever
applicable.
3. Refund of unutilized input tax credit due to
the accumulation of credit of tax paid on
inputs or input services used in making
zero-rated supplies of goods or services or
both
FORM GST RFD-01A needs to
be filed on the common portal.
The amount of credit claimed as
refund would be debited in the
electronic credit ledger and proof
of debit needs to be generated on
the common portal. Printout of the
FORM GST RFD- 01A needs to
be submitted before the
jurisdictional GST officer along
with necessary documentary
evidences, wherever applicable.
3.2 Steps to be followed for processing of Refund Claims:
Three different refund registers are to be maintained for record keeping of the
manually sanctioned refunds – for receipts, sanction of provisional refunds and
sanction of final refunds. The steps are as follows:
Step No. Action to be Taken
Step-1 Entry to be made in the Refund register for receipt of refund applications
Step-2 Check for completeness of application as well as availability of the
supporting documents in totality. Once completeness in all respects is
ascertained, acknowledgement in FORM GST RFD -02 shall be issued
within 15 days from the date of filing of the application and entry shall be
made in the Refund register for receipt of refund applications
Step-3 All communications (issuance of deficiency memo, issuance of
provisional and final refund orders, payment advice etc.) shall be
done in the format prescribed in the Forms appended to the CGST
Rules, and shall be done manually (i.e. not on the common portal)
within the timelines prescribed in the rules;
Processing for grant of provisional refund shall be completed within
7 days as per the CGST Rules and details to be maintained in the
register for provisional refunds. Bifurcation of the taxes to be
refunded under CGST (CT) /SGST (ST) /UTGST (UT) /IGST (IT)
/Cess shall be maintained in the register mandatorily;
After the sanction of the provisional refund, final order is to be
issued within sixty days (after due verification of the documentary
evidences) of the date of receipt of the complete application form.
The details of the finally sanctioned refund and rejected portion of
the refund along with the breakup (CT / ST / UT / IT/ Cess) to be
maintained in the final refund register;
The amount not sanctioned and eligible for re-credit is to be re-
credited to the electronic credit ledger by an order made in FORM
GST PMT-03. The actual credit of this amount will be done by the
proper officer in FORM GST RFD-01B.
3.3 Detailed procedure for manual processing of refund claims:
The detailed procedure for disposal of Refund claims filed manually is as under:
MANUAL PROCESSING OF REFUND
STEPS REMARKS
LEGAL
PROVISIONS
Filing of refund application
in FORM GST RFD - 01A
online on the common portal
(only when refund of
unutilized ITC is claimed)
The corresponding
electronic credit ledger
of CT / ST / UT / IT/
Cess would get debited
and an ARN number
would get generated.
Rule 89
Filing of printout of
FORMGST RFD-01A
The printout of the ARN
along with application of
refund shall be
submitted manually in
the appropriate
jurisdiction.
This form needs to be
accompanied with the
requisite documentary
evidences. This Form
shall contain the debit
entry in the electronic
credit ledger of the
amount claimed as
refund in FORM GST
RFD-01A.
Rule 89(1) –
Application
Rule 89(2) –
Requisite
Documents
Rule 89(3) –
Debiting of
electronic credit
ledger
Initial scrutiny of the
Documents by the proper
officer
The proper officer shall
validate the GSTIN
details on the portal to
validate whether return
in FORM GSTR-3 or
FORM GSTR- 3B, as
the case may be, has
been filed. A declaration
is required to be
submitted by the
claimant that no refund
has been claimed against
the relevant invoices.
Deficiencies, if any, in
documentary evidences
are to be ascertained and
communicated in
Rule 90(2) – 15 day
time for scrutiny
Rule 90(3) –
Issuance of
Deficiency memo
Rule 90(3) – Fresh
refund application
requirement
Rule 93(1) – re-
credit of refund
amount applied for
FORM GST RFD-03
within 15 days of filing
of the refund
application.
Deficiency Memo
should be complete in
all respects and only one
Deficiency Memo shall
be given.
Submission of
application after
Deficiency Memo shall
be treated as a fresh
application.
Resubmission of the
application, after
rectifying the
deficiencies pointed out
in the Deficiency memo,
shall be made by using
the ARN and debit entry
number generated
originally.
If the application is not
filed afresh within thirty
days of the
communication of the
deficiency memo, the
proper officer shall pass
an order in FORM GST
PMT-03 and re-credit
the amount claimed as
refund through FORM
GST RFD-01B.
Issue acknowledgement
manually within 15 days in
FORM GST RFD-02
The date of submission
of application for which
acknowledgement has
been given will be
considered as the date
for ensuring whether the
refund application has
been sanctioned within
the stipulated time
period.
Rule 90(2) -
Acknowledgement
Grant of provisional refund
within seven days of issue of
acknowledgement
The amount of
provisional refund shall
be calculated taking into
account the total input
tax credit, without
making any reduction
for credit being
provisionally accepted.
Provisional refund shall
be granted separately for
each head CT / ST / UT
/ IT/ Cess within 7 days
of acknowledgement in
FORM GST RFD-04.
Before sanction of the
refund a declaration
shall be obtained that the
applicant has not
contravened rule 91(1).
Payment advice to be
issued in FORM GST
RFD-05.
Refund would be made
directly in the bank
account mentioned in
the registration.
Rule 91(1) –
Requirement of no
prosecution for last
5 years
Rule 91(2) – Prima
facie satisfaction,
seven day
requirement
Rule 91(3) –
Payment advice,
electronic credit to
bank account
Detailed scrutiny of the
refund application along with
submitted documents
The officer shall validate
refund statement details
with details in FORM
GSTR 1 (or Table 6A of
FORM GSTR-1)
available on the
common portal.
The Shipping bill details
shall be checked by
officer through
ICEGATE SITE
(www.icegate.gov.in)
wherein the officer
would be able to check
details of EGM and
shipping bill by keying
in port name, Shipping
bill number and date.
Further, details of IGST
paid also needs to be
Rule 89(4) – Refund
Amount Calculation
Rule 92(1) – Any
adjustments made in
the amount against
existing demands
Rule 92(2) –
reasons for
withholding of
refunds
verified from FORM
GSTR- 3 or FORM
GSTR- 3B, as the case
may be, filed by the
applicant and it needs to
be verified that the
refund amount claimed
shall be less than the tax
paid on account of zero
rated supplies as per
FORM GSTR -3 or
FORM GSTR- 3B, as
the case may be.
Ascertain what amount
may be sanctioned
finally and see whether
any adjustments against
any outstanding liability
is required (FORM
GST RFD-07 – Part A).
Ascertain what amount
of the input tax credit is
sanction-able, and
amount of refund, if any,
liable to be withheld.
Order needs to be passed
in FORM GST RFD-07
– Part B.
If the sanction-able amount is
less than the applied amount
Notice has to be issued
to the applicant in
FORM GST RFD-08.
The applicant has to
reply within 15 days of
receipt of the notice in
FORM GST RFD-09.
Principles of natural
justice to be followed
before making the final
decision.
Final order to be made
in FORM GST RFD-
06.
Rule 92(3) – Notice
for refund not
admissible / payable
Rule 92(3) –
Requirement of
reply to the notice
within 15 days
Rule 92(3), 92(4),
92(5) – Sanction of
Refund order
Pre-Audit
Pre-audit of the
manually processed
refund applications is
not required to be
carried out, irrespective
of the amount involved,
till separate detailed
guidelines are issued.
Post-audit of the orders
may however continue
on the basis of extant
guidelines.
Final sanction of refund
The proper officer shall
issue the refund order
manually for each head
i.e. CT / ST / UT / IT/
Cess.
Amount paid
provisionally needs to be
adjusted accordingly.
Payment advice is to be
made in FORM GST
RFD-05.
The amount of credit
rejected has to be re-
credited to the credit
ledger by an order in
FORM GST PMT- 03
and shall be intimated to
the common portal in
FORM GST RFD -
01B.
Refund, if any, will be
paid by an order with
payment advice in
FORM GST RFD-05.
The details of the refund
along with taxpayer
bank account details
shall be manually
submitted in
PFMS/[States’] system
by the jurisdictional
Division’s DDO and a
signed copy of the
sanction order shall be
sent to PAO office for
release of payment.
Rule 92(3), 92(4),
92(5) – Sanction of
Refund order
Rule 92(4), 92(5) –
Payment advice
issue
Payment of interest if any
Amount, if any, will be
paid by an order with
Rule 94
payment advice in
FORM GST RFD-05.
4. The refund application for various taxes i.e. CT / ST / UT / IT/ Cess can be
filed with any one of the tax authorities and shall be processed by the said authority,
however the payment of the sanctioned refund amount shall be made only by the
respective tax authority of the Centre or State government. In other words, the
payment of the sanctioned refund amount in relation to CT / IT / Cess shall be made
by the Central tax authority while payment of the sanctioned refund amount in relation
to ST / UT would be made by the State tax/Union territory tax authority. It therefore
becomes necessary that the refund order issued either by the Central tax authority or
the State tax/UT tax authority is communicated to the concerned counter-part tax
authority within three days for the purpose of payment of the relevant sanctioned
refund amount of tax or cess, as the case may be.
5. It is requested that suitable trade notices may be issued to publicize the
contents of this Circular.
6. Difficulty, if any, in implementation of the above instructions may please be
brought to the notice of the Board. Hindi version would follow.
(Upender Gupta)
Commissioner (GST)
