CBIC clarifies the issues in order to ensure uniformity in the implementation of the provisions of the law across the field formations through Circular No. 137/07/2020-GST dt 13.04.2020 as under –
Issue-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 his tax liability in his returns?
Clarification-
In case GST is paid by supplier on advance 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 Sec-34 CGST Act.
He shall declare the details of such credit note in the return for the month during such credit note has been issued.
Tax liability shall be adjusted in return subject to conditions of Sec-34 CGST Act so there is no need to file separate refund claim.
In case where there is no output liability against which credit note can be adjusted , may proceed to file a refund under 'Excess payment of tax, if any' through Form GST RFD-01.
Issue-2 -
An advance is received by a supplier for a Service contract which subsequently got cancelled. The supplier has issued 'Receipt voucher' and paid the GST thereon. Whether he can claim refund of tax paid on advance or is he required to adjust his tax liability in his returns?
Clarification-
In case GST is paid by supplier on advance received for an event which got cancelled subsequently and for which no invoice has been issued in terms of Sec-31(2) CGST Act, the supplier is required to issue a 'Refund Voucher' in terms of Sec-31(3) CGST Act read with Rule-51 CGST Rules .
Supplier can apply for refund on such advance by Form GST RFD-01 under the category of 'Refund of excess payment of Tax'
Issue-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?
Clarification-
In such case where Goods supplied by supplier are returned by recipient and where tax invoice had been issued, the supplier is required to issue 'Credit Note' in terms of Sec-34 of CGST Act.
He shall declare the details of such credit note in the returns for the month during such credit note has been issued.
Tax liability shall be adjusted in return subject to conditions of Sec-34 CGST Act so there is no need to file separate refund claim.
In case where there is no output liability against which credit note can be adjusted , may proceed to file a claim under 'Excess payment of tax, if any' through Form GST RFD-01.
Issue-4 -
Letter of Undertaking (LUT) furnished for the purpose of Zero Rated supplies as per provisions of Sec-16 of IGST Act read with Rule-96A of 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 such supplies on payment of IGST and claim refund of such IGST?
Clarification-
Notification No.37/2017 CT Dt.04.10.2017 requires LUT to be furnished for a F.Y. However in terms of N.No.35/2020 CT dt.03.04.2020 , where the requirement under GST Law for furnishing of any report, document, returns, 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 as per N.No.35/2020 CT dt.03.04.2020, time limit for filing of LUT for the year 2020-2021 shall extended to 30.06.2020 and taxpayer can continue to make the supply without payment of tax under LUT provided that Form GST RFD-11 for 2020-2021 is furnished on or before 30.06.2020.
Taxpayer may quote the reference number of LUT for the year 2019-20 in the relevant documents.
Issue-5 -
While making the payment to the recipient, amount equivalent to 1% was deducted as per provisions of Sec-51 of CGST Act. Whether the date of deposit of such payment has also been extended vide N.No.35/2020 CT dt.03.04.2020 ?
Clarification-
As per N.No.35/2020 CT dt.03.04.2020, where the timeline for any compliance required as per Sec-39(3) and Sec-51of CGST Act 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 Form GSTR-7 along with deposit of tax deducted for the said period has also been extended till 30.06.2020 and no interest u/s 50 shall be leviable if tax deducted is deposited by 30.06.2020.
Issue-6 -
As per Sec-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 and application for refund expires on 31.03.2020, can such person make an application for refund before 29.07.2020?
Clarification-
As per N.No.35/2020 CT dt.03.04.2020, where the timeline for any compliance required as per Sec-54(1) 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.
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