The Goods and Services Tax Network (GSTN) has introduced significant changes to the refund filing process for several categories. These updates aim to simplify the process and make it more efficient for taxpayers. Here are the key changes:
1. Categories Affected
The changes apply to the following refund categories:
- Export of Services with Payment of Tax
- Supplies Made to SEZ Unit/SEZ Developer with Payment of Tax
- Refund by Supplier of Deemed Export
2. Removal of Tax Period Selection
Previously, taxpayers had to select a specific tax period (‘From’ and ‘To’) when filing refund applications. This requirement has now been removed. Taxpayers can directly select the refund category and proceed by clicking on “Create Refund Application.”
3. Filing of Returns
Taxpayers must ensure that all due returns (such as GSTR-1, GSTR-3B) are filed up to the date of the refund application.
4. Shift to Invoice-Based Filing
The refund categories mentioned above have transitioned from ‘Tax Period based filing’ to ‘Invoice based filing.’ Taxpayers can now upload eligible invoices and claim refunds using the following statements:
- Export of Services with Payment of Tax: Statement 2
- SEZ Supplies with Payment of Tax: Statement 4
- Deemed Exports (Application by Supplier): Statement 5B
Once invoices are uploaded with a refund application, they will be locked for any further amendments and will not be available for subsequent refund claims. These invoices will only be unlocked if the refund application is withdrawn or a deficiency memo is issued.
These updates are designed to streamline the refund process, reduce administrative burdens, and enhance the overall efficiency of the GST system.
Circular no. 181/13/2022-GST Dt.10.11.2022
14.11.2022: The GST policy wing has issued a detailed circular no. 181/13/2022-GST Dt.10.11.2022, clarifying various issues. Here is the summary.
The sub-section (3) of section 54 of the CGST Act, 2017, provides for the refund of an unutilized input tax credit. This is related to cases where credit is accumulated on account of the rate of tax on inputs being higher than the rate of tax on output supplies i.e. on account of an inverted duty structure.
Thus, Sub-rule (5) of rule 89 of CGST Rules, 2017 prescribes the formula for granting of refund in cases of inverted duty structure Vide Notification No. 14/2022-Central Tax dated 05.07.2022.
The amendment has been made in the formula prescribed under sub-rule (5) of rule 89 of the CGST Rules, 2017. Further, vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022, which has been made effective from 18.07.2022, the restriction has been placed on refund of the unutilized input tax credit on account of inverted duty structure in case of a supply of certain goods falling under chapter 15 and 27.
It is said that various Representations have been received from the trade and the field formations seeking clarification on various issues pertaining to the implementation of the above notifications.
In order to clarify the issues and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in the exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies the issues as under:
Issue No. 1
Whether the formula prescribed under sub-rule (5) of rule 89 of the CGST Rules, 2017 for calculation of refund of the unutilized input tax credit on account of inverted duty structure, as amended vide Notification No. 14/2022-Central Tax dated 05.07.2022, will apply only to the refund applications filed on or after 05.07.2022, or whether the same will also apply in respect of the GST refund applications filed before 05.07.2022 and pending with the proper officer as on 05.07.2022?
Clarification NO. 1
Vide Notification No. 14/2022-Central Tax dated 05.07.2022, the amendment has been made in sub-rule (5) of rule 89 of CGST Rules, 2017, modifying the formula prescribed therein.
The said amendment is not clarificatory in nature and is applicable prospectively with effect from 05.07.2022.
Accordingly, it is clarified that the said amended formula under sub-rule (5) of rule 89 of the CGST Rules, 2017 for calculation of refund of the input tax credit on account of inverted duty structure would be applicable in respect of refund applications filed on or after 05.07.2022.
The refund applications filed before 05.07.2022 will be dealt with as per the formula as it existed before the amendment made vide Notification No. 14/2022-Central Tax dated 05.07.2022.
Issue No. 2
Whether the restriction placed on refund of the unutilized input tax credit on account of inverted duty structure in case of certain goods falling under chapters 15 and 27 vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022, which has been made effective from 18.07.2022, would apply to the refund applications pending as on 18.07.2022 also or whether the same will apply only to the refund applications filed on or after 18.07.2022 or whether the same will be applicable only to refunds pertaining to prospective tax periods?
Clarification No. 2
Vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022, under the powers conferred by clause (ii) of the first proviso to sub-section (3) of section 54 of the CGST Act, 2017, certain goods falling under chapters 15 and 27 have been specified in respect of which no refund of the unutilized input tax credit shall be allowed, where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supplies of such specified goods (other than nil rated or fully exempt supplies). The said notification has come into force with effect from 18.07.2022.
The restriction imposed vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022 on refund of the unutilized input tax credit on account of inverted duty structure in case of specified goods falling under chapters 15 and 27 would apply prospectively only. Accordingly, it is clarified that the restriction imposed by the said notification would be applicable in respect of all refund applications filed on or after 18.07.2022, and would not apply to the refund applications filed before 18.07.2022
we hope that after getting clarification from these points, taxpayers will have ease of access to the GST refund. Go to GST Notification 2022 , page to download this notification.
