REFUNDS, RETURNS & OTHER COMPLIANCES UNDER GST AYUSH GUPTA ACMA, ACA, CS, B.Com, DISA

REFUNDS

Basics As per Section 2(5) of IGST, “export of goods” with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India As per Section 2(6) of IGST, “export of services” means the supply of any service when,–– (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person.

Basics GSTR 1 or TABLE 6A of GSTR1 and GSTR 3B should be filed. (Amended Rule 96 & 96A

Relevant Provisions Section 16 of IGST Section 49(6) of CGST Rules 89 to 97A of CGST Circular 17/2017 of CGST dated 15th November, 2017

Zero Rated Supply (Section 16 Of IGST) (1) “zero rated supply” means any of the following supplies of goods or services or both, namely:–– (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero rated supply shall be eligible to claim refund 30 under either of the following options, namely:–– (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.

Payment of Tax (Section 49(6) of CGST) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54.

Refund of Tax (Section 54) Refund application has to be made within 2 years from the relevant date: UNO, Embassy or any other Section 55 person entitled to refund of tax on inward supplies before expiry of six months from last day of the quarter in which supply was received as per rule 95. Refund of Unutilized ITC be allowed in case of Zero rated Supplies Inverted Duty Structure Note: a) No refund if goods exported subject to Export Duty. b) If supplier avails duty drawback or claims refund of IGST paid on supplies

Refund scenarios REFUND OF IGST PAID ON GOODS EXPORTED OUT OF INDIA REFUND OF IGST PAID ON ZERO RATED SUPPLY OF GOODS TO A SEZ DEVELOPER OR A SEZ UNIT REFUND OF IGST PAID IN CASE OF ZERO RATED SUPPLY OF SERVICES REFUND OF UNUTILIZED ITC ON INPUTS OR INPUT SERVICES USED IN MAKING ZERO RATED SUPPLIES

SCENARIO I REFUND OF IGST PAID ON GOODS EXPORTED OUT OF INDIA No separate application is required as shipping bill itself will be treated as application for refund.

SCENARIO Ii, III & IV REFUND OF IGST PAID ON export of services or supplies to sez or unutilized itc 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. Note: To check jurisdiction, use the following link for taxpayers registered in Rajasthan: http://rajtax.gov.in/vatweb/eServices/eServeMain.jsp?view PageNo=229

Manual processing of refund 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. Note: To check jurisdiction, use the following link for taxpayers registered in Rajasthan: http://rajtax.gov.in/vatweb/eServices/eServeMain.jsp?view PageNo=229

Refund – Documents for Application and Interest Documents Required for Application of Refund Documents evidencing tax, interest or any other amount paid, required to be enclosed with the refund application Copy of proof of deposit of tax and invoices and Documents evidencing export Where the refund amount claimed is less than Rs. 2 Lacs, the applicant may not furnish Documentary evidences and instead file a declaration based on available evidences Interest on Refund Refund application to be processed within 60 days from the date of application complete in all respects For refunds made after 60 days from date of application – interest at the rate 6%.

Manual Filing And Processing Of Refunds (Rule 97A Of cgst) Notwithstanding anything contained in this Chapter, in respect of any process or procedure prescribed herein, any reference to electronic filing of an application, intimation, reply, declaration, statement or electronic issuance of a notice, order or certificate on the common portal shall, in respect of that process or procedure, include manual filing of the said application, intimation, reply, declaration, statement or issuance of the said notice, order or certificate in such Forms as appended to these rules.

RULE 89(4), in cases of without payment of tax Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷Adjusted Total Turnover Where- (A) "Refund amount" means the maximum refund that is admissible; (B) "Net ITC" means input tax credit availed on inputs and input services during the relevant period; (C) "Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking; (D) "Turnover of zero-rated supply of services" means the value of zero-rated supply of services made without payment of tax under bond or letter of undertaking, (E) "Adjusted Total turnover" means the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the value of exempt supplies other than zero-rated supplies, during the relevant period; (F) “Relevant period” means the period for which the claim has been filed.

RULE 89(5), in cases of INVERTED DUTY STRUCTURE Inverted Duty Structure means “Rate of Tax on Inputs being higher than the rate of tax on output supplies” Maximum Refund Amount = {(Turnover of inverted rated supply of goods) x Net ITC ÷ Adjusted Total Turnover} - tax payable on such inverted rated supply ofgoods Where- (A) "Net ITC" means input tax credit availed on inputs and input services during the relevant period; (B) "Adjusted Total turnover" means the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the value of exempt supplies other than zero-rated supplies, during the relevant period;

Relevant Date for Section 54 (Refund of Tax) Refund of Tax Paid on Goods Exported – Date on which goods leave India Refund of Tax paid on Deemed Export of Goods – Date on which return relating to such export furnished Refund of tax paid on Services Exported – Date of BRC where payment received after completion Date of issue of invoice where payment received in advance As a consequence of Judgment – Date of Communication Unutilized ITC – End of Financial Year Provisionally paid Tax – Date of adjustment after Final Assessment Any other case – Date of Payment of Tax

S.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

RETURNS & OTHER COMPLIANCES

Availability of Credit in Special Circumstances (Section 18(1) r. w Availability of Credit in Special Circumstances (Section 18(1) r.w. Rule 40 of CGST ) Subject to such conditions and restrictions as may be prescribed— a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act; “So as to claim credit, a declaration in Form ITC 01 needs to be filed”

Conditions & Restrictions In Respect Of Inputs And Capital Goods Sent To The Job Worker (Rule 45 Of cgst) (1)The inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challan issued by the principal, including where such goods are sent directly to a job-worker. (2) The challan issued by the principal to the job worker shall contain the details specified in rule 55. (3) The details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another during a quarter shall be included in FORM GST ITC-04 furnished for that period on or before the twenty-fifth day of the month succeeding the said quarter [or within such further period as may be extended by the Commissioner by a notification in this behalf: Provided that any extension of the time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.]

AYUSH GUPTA ACMA, ACA, CS, B.Com, DISA Contact: +91 - 7742274087 THANK YOU!! AYUSH GUPTA ACMA, ACA, CS, B.Com, DISA Contact: +91 - 7742274087