Ankita Khetan | Dec 18, 2017 |
CBEC issues circular for refund claims of zero rated supplies
videCircular No. 17/17/2017 – GST dated 15th November,2017
Manual filing and processing of refund claims in respect of zero-rated supplies .
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 15th 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-ratedsupplies – reg.
Due to the non-availability of the refund module on the common portal, it hasbeen decided by the competent authority, on the recommendations of the Council, thatthe applications/documents/forms pertaining to refund claims on account of zero-ratedsupplies shall be filed and processed manually till further orders. Therefore, inexercise of the powers conferred by sub-section (1) of section 168 of the CentralGoods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act) and forthe purpose of ensuring uniformity, the following conditions and procedure are laiddown 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 TaxAct, 2017 (hereinafter referred to as the IGST Act) read with clause (i) of subsection(3) and sub-section (6) of section 54 of the CGST Act and rules 89 to 96A ofthe Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGSTRules), a registered person may make zero-rated supplies of goods or services or bothon payment of integrated tax and claim refund of the tax so paid, or make zero-ratedsupplies of goods or services or both under bond or Letter of Undertaking withoutpayment of integrated tax and claim refund of unutilized input tax credit in relation tosuch zero rated supplies.
2.2 The refund of integrated tax paid on goods exported out of India is governed byrule 96 of the CGST Rules. The shipping bill filed by an exporter shall be deemed tobe an application for refund in such cases. The application shall be deemed to havebeen filed only when export manifest or export report is filed and the applicant hasfurnished 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 FORMGSTR-3 or FORM GSTR-3B, as the case may be, from the common portal, thesystem designated by the Customs shall process the claim for refund and an amountequal to the integrated tax paid in respect of such export shall be electronicallycredited to the bank account of the applicant. Any order regarding withholding of suchrefund or its further sanction respectively in PART-B of FORM GST RFD-07 orFORM GST RFD-06 shall be done manually till the refund module is operational onthe common portal.
2.3 The application for refund of integrated tax paid on zero-rated supply of goodsto a Special Economic Zone developer or a Special Economic Zone unit or in case ofzero-rated supply of services (that is, except the cases covered in paragraph 2.2 aboveand para 2.4 below) is required to be filed in FORM GST RFD-01A (as notified inthe CGST Rules vide notification No. 55/2017 Central Tax dated 15.11.2017) by thesupplier on the common portal and a print out of the said form shall be submitted before the jurisdictional proper officer along with all necessary documentaryevidences as applicable (as per the details in statement 2 or 4 of Annexure to FORMGST RFD 01), within the time stipulated for filing of such refund under the CGSTAct.
2.4 The application for refund of unutilized input tax credit on inputs or inputservices 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 inaccordance with sub-rule (3) of rule 86 of the CGST Rules from the amount in theelectronic credit ledger to the extent of the claim. The common portal shall generate a proof of debit (ARN- Acknowledgement Receipt Number) which would be mentionedin the FORM GST RFD-01A submitted manually, along with the print out of FORMGST RFD-01A to the jurisdictional proper officer, and with all necessarydocumentary evidences as applicable (as per details in statement 3 or 5 of Annexure toFORM 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 taxauthority to which the taxpayer has been assigned as per the administrative orderissued in this regard by the Chief Commissioner of Central Tax and the Commissionerof State Tax. In case such an order has not been issued inthe State, the registeredperson is at liberty to apply for refund before the Central Tax Authority or State TaxAuthority till the administrative mechanism for assigning of taxpayers to respective authority is implemented. However, in the latter case, an undertaking is required to besubmitted stating that the claim for sanction of refund has been made to only one ofthe authorities. It is reiterated that the Central Tax officers shall facilitate theprocessing of the refund claims of all registered persons whether or not such personwas registered with the Central Government in the earlier regime.
2.6 Once such a refund application in FORM GST RFD-01A is received in theoffice of the jurisdictional proper officer, an entry shall be made in a refund register tobe maintained for this purpose with the following details
2.7 Further, all communication in regard to the FORMS mentioned below shall bedone manually, within the timelines as specified in the relevant rules, till the module isoperational on the common portal, and all such communications shall also be recordedappropriately in the refund register as discussed in the succeeding paragraphs
| Sr. 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 berecorded 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 thefinal order issued within sixty days of the date of receipt of the complete applicationform. The process shall be recorded in the refund register as in the table indicatedbelow –
2.10 After the refund claim is processed in accordance with the provisions of theCGST Act and the rules made there under and where any amount claimed as refund isrejected under rule 92 of the CGST Rules, either fully or partly, the amount debited, tothe extent of rejection, shall be re-credited to the electronic credit ledger by an ordermade in FORM GST PMT-03. The amount would be credited by the proper officerusing 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 theCGST Rules.
3. For the sake of clarity and uniformity, the entire process of filing andprocessing of refunds manually is tabulated as below:
3.1 Filing of Refund Claims:
Sr. 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 themanually sanctioned refunds for receipts, sanction of provisional refunds andsanction 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 |
|
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) |
| Rule 89 |
| Filing of printout of FORMGST 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 |
| 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 |
| Issue acknowledgement manually within 15 days in FORM GST RFD-02 |
| Rule 90(2) – Acknowledgement |
| Grant of provisional refund within seven days of issue of acknowledgement |
| Rule 91(1)– Requirement of no prosecution for last 5 years Rule 91(2) Primafacie satisfaction, seven day requirement Rule 91(3) Payment advice, electronic credit to bank account |
| Detailed scrutiny of the refund application along with submitted documents |
| 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 |
| If the sanction-able amount is less than the applied amount |
| 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 |
| |
| Final sanction of refund |
| Rule 92(3), 92(4), 92(5) Sanction of Refund order Rule 92(4), 92(5) Payment advice issue |
| Payment of interest if any |
| Rule 94 |
4. The refund application for various taxes i.e. CT / ST / UT / IT/ Cess can befiled 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 therespective tax authority of the Centre or State government. In other words, thepayment 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 relationto ST / UT would be made by the State tax/Union territory tax authority. It thereforebecomes necessary that the refund order issued either by the Central tax authority orthe State tax/UT tax authority is communicated to the concerned counter-part taxauthority within three days for the purpose of payment of the relevant sanctionedrefund amount of tax or cess, as the case may be.
5. It is requested that suitable trade notices may be issued to publicize thecontents of this Circular.
6. Difficulty, if any, in implementation of the above instructions may please bebrought to the notice of the Board. Hindi version would follow.
(Upender Gupta)
Commissioner (GST)
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