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Circular 17/2017 dt 15.11.2017

Manual filing and processing of refund claims in respect of zero-rated supplies
To view this notification,/click here

Opinion

Dear Sir,

The CBEC on 15th November 2017 has issued a circular no. 17/17/2017-GST along with notification no. 55/2017 – Central Tax amending CGST rules, 2017 for manual filing and processing of refund claims in respect of zero-rated supplies. Under GST regime, a registered person may make zero-rated supplies of goods or services or both on payment of IGST and claim refund of such tax so paid, or makes zero-rated supplies of goods or services or both under bond or Letter of Undertaking (LUT) without payment of IGST and claim refund of unutilized input tax credit in relation to such zero rated supplies. The circular states the procedure for manually filing refund claim in case of unutilized input tax credit in making export.

Where to file refund claim:
1. 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, or
2. In case where 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 such 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 has been restated 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.

Procedure for filing refund claims: Following is the procedure along with some conditions for the manual filing and processing of the refund claims:

1. Refund of IGST paid on exports of goods:
Rule 96 of CGST rules deals with the refund of IGST paid on exports, according to mentioned rule, refund application in case of exports made by paying IGST shall be considered only on filing of export manifest or an export report covering details of shipping bills or bills of export along with filing of return in FORM GSTR-3 or FORM GSTR-3B.
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. Refund of IGST paid on export of services and export to SEZ developer or unit:
The application for refund of IGST paid on export of goods to a SEZ developer or a SEZ unit or in case of export of services 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 (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.

3. Refund of unutilized input tax credit for exports under LUT/bond (i.e. without payment of IGST)- to be filed manually
 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 from the amount in the electronic credit ledger to the extent of the claim (as per rule 86(3) of the CGST Rules).

 The common portal shall generate a proof of debit (ARN- Acknowledgement Receipt Number). 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 i.e. details in statement 3 or 5 of Annexure to FORM GST RFD-01. This Form shall contain the debit entry in the electronic credit ledger of the amount claimed as refund in FORM GST.
 As per Rule 90(2) of CGST Rules, 2017, the proper officer shall validate the GSTIN details on the portal to verify 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.
 The proper officer shall issue acknowledgement for submission of application manually within 15 days in FORM GST RFD-02.
 Processing for grant of provisional refund shall be completed within 7 days of acknowledgement in FORM GST RFD-04 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 will be issued within 60 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.
 Before sanction of the refund a declaration shall be obtained that the applicant has not contravened rule 91(1) (i.e. Requirement of no prosecution for last 5 years).
 Payment advice shall be issued in FORM GST RFD-05. Refund would be made directly in the bank account mentioned in the registration.

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