Clarifications in respect of challenges faced in implementation of certain GST Provisions
by ReinHeads Team | Apr 16, 2020
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Clarification in respect of challenges faced in implementation of certain GST Provisions
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The Central Board of Indirect Taxes and Customs has issued Circular No. 137/07/2020-GST dated 13 April 2020 wherein clarifications has been issued on challenges faced by registered taxpayers in meeting the compliance requirements under the Central Goods and Services Tax Act 2017 (‘the CGST Act’) on account of outbreak of COVID-19.
The clarifications have been summarized hereinbelow for your reference:
| Scenario |
Issue |
Clarification |
| 1. An advance is received by a supplier against a service contract which subsequently got cancelled and no supply is required to be made
Case I:- Supplier has issued the invoice before supply of service and paid the GST thereon
Case II:- Supplier has issued receipt voucher and paid GST on such advance received. However, no invoice has been issued |
Whether supplier can claim refund of tax paid or is required to adjust the tax liability in his returns? |
· Case I:- Supplier is required to issue credit note u/s 34 of the CGST Act and adjust his output tax liability in the GST return. In case of no adjustable output liability, refund of tax shall be claimed under head “Excess of payment of tax” through Form GSTR RFD-01
· Case II:- Supplier is required to issue refund voucher u/s 31(3)(e) of the CGST Act. Supplier can apply for refund under head “Excess of payment of tax” through Form GSTR RFD-01 |
| 2. Goods supplied by a supplier against a tax invoice are returned by the recipient
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Whether the supplier can claim refund of tax paid or is he required to adjust his tax liability? |
· Supplier is required to issue credit note u/s 34 of the CGST Act and adjust output tax liability in the GST return
· In case of no adjustable output liability, refund of tax shall be claimed under head “Excess of payment of tax” through Form GSTR RFD-01 |
| 3. Letter of Undertaking (‘LUT’) furnished for the purposes of zero-rated supplies u/s 16 of the IGST Act 2017 has expired on 31.03.2020
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Whether a registered person can still make a zero-rated supply on such LUT and claim refund accordingly or does he have to make such supplies on payment of IGST and claim refund of such IGST? |
· Notification No. 37/2017-Central Tax, dated 04.10.2017 requires LUT to be furnished for a financial year
· By Notification No. 35/2020 Central Tax dated 03.04.2020 (‘the Notification No. 35’), where the requirement under the GST Law for furnishing of any report, document, return, etc. falls between 20.03.2020 to 29.06.2020, the same has been extended till 30.06.2020
· Therefore, time limit for filing of LUT for the year 2020-21 shall stand extended to 30.06.2020 and the taxpayer can continue to make the supply without payment of tax under LUT provided that the Form GST RFD-11 for 2020-21 is furnished on or before 30.06.2020
· Taxpayers may quote the reference no. of the LUT for the year 2019-20 in the relevant documents |
| 4. While making the payment to recipient, 1% was deducted at source as per the provisions of section 51 of CGST Act |
Whether the date of deposit of 1% Tax Deducted at Source (‘TDS’) u/s 51 of the CGST Act has also been extended vide the Notification No. 35/2020- Central Tax dated 03.04.2020? |
Pursuant to the Notification No. 35, due date for furnishing of return in Form GSTR-7 along with deposit of TDS has been extended till 30.06.2020. No interest shall be levied if TDS is deposited by 30.06.2020 |
| 5. As per section 54(1) of the CGST Act, a person is required to make an application for refund before expiry of two years from the relevant date.
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If in a particular case, date for making an application for refund expires on 31.03.2020, can such person make an application for refund before 30.06.2020? |
Pursuant to the Notification No. 35, the due date for filing an application for refund falling during the period from 20.03.2020 to 29.06.2020, has been extended till 30.06.2020 |
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