TaxTMI 
TaxTMI 
Clarification on refund related issues
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....ations, in exercise of powers conferred by section 168(1) of the Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as "KGST Act"), the issues are hereby clarified as detailed hereunder: 2. Bunching of refund claims across Financial Years 2.1 It may be recalled that the restriction on clubbing of tax periods across different financial years was put in vide para 11.2 of CCT Circular No. GST-18/2017-18 dated 17.03.2018. The said circular was rescinded being subsumed in the Master Circular on Refunds No. GST-30/2019-20 dated 02.12.2019 and the said restriction on the clubbing of tax periods across financial years for claiming refund thus has been continued vide Paragraph 8 of CCT Circular No. GST-30/2019-20 d....
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....om the Order. Hon'ble Delhi High Court vide para 12 of the aforesaid Order has observed that the Circulars can supplant but not supplement the law. Circulars might mitigate rigours of law by granting administrative relief beyond relevant provisions of the statute, however, Central Government is not empowered to withdraw benefits or impose stricter conditions than postulated by the law. 2.3 Further, same issue has been raised in various other representations also, especially those received from the merchant exporters wherein merchant exporters have received the supplies of goods in the last quarter of a Financial Year and have made exports in the next Financial Year i.e. from April onwards. The restriction imposed vide par....
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....sp; It may be noted that refund of accumulated ITC in terms of clause (ii) of sub-section (3) of section 54 of the KGST Act is available where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies. It is noteworthy that, the input and output being the same in such cases, though attracting different tax rates at different points in time, do not get covered under the provisions of clause (ii) of sub-section (3) of section 54 of the KGST Act: It is hereby clarified that refund of accumulated ITC under clause (ii) of sub-section (3) of section 54 of the KGST Act would not be applicable in cases where the input and the output supplies are the same. 4. Change in manner of....
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....onic credit ledger is required to be made by the applicant at the time of filing refund claim, being claim of tax already paid, However, the total tax would have been normally paid by the applicant by debiting tax amount from both electronic credit ledger and electronic cash ledger. At present, in these cases, the amount of admissible refund, is paid in cash even when such payment of tax or any part thereof, has been made through ITC. 4.3.1 As this could lead to allowing unintended encashment of credit balances, this issue has been engaging attention of the Government. Accordingly, vide Notification (4-B/2020) No. FD 05 CSL 2020 dated 23.04.2020, sub-rule (4A) has been inserted in rule 86 of the KGST Rules, 2017 which reads as unde....
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....ther than zero rated supplies will now be admissible proportionately in the respective original mode of payment i.e. in cases of refund, where the tax to be refunded has been paid by debiting both electronic cash and credit ledgers (other than the refund of tax paid on zero-rated supplies or deemed export), the refund to be paid in cash and credit shall be calculated in the same proportion in which the cash and credit ledger has been debited for discharging the total tax liability for the relevant period for which application for refund has been filed. Such amount, shall be accordingly paid by issuance of order in FORM GST RFD-06 for amount refundable in cash and FORM GST PMT-03 to re-credit the amount attributable to credit as ITC in the e....
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....f invoices relating to inward supply as provided in Annexure-B of the CCT Circular No. GST30/2019-20 dated 02.12.2019 so as to easily identify between the supplies of goods and services. 6.2 The issue has been examined and considering that such a distinction is important in view of the provisions relating to refund where refund of credit on Capital goods and/or services is not permissible in certain cases, it has been decided to amend the said statement. Accordingly, Annexure-B of the CCT Circular No. GST-30/2019-20 dated 02.12.2019 stands modified to that extent. 6.3 A suitably modified statement format is attached for applicants to upload the details of invoices reflecting in their FORM GSTR-2A. The applicant is, in addi....