Various representations have been received from taxpayers and other stakeholders seeking clarification in respect of certain issues relating to refund. CBIC vide Circular No. 166/22/2021-GST dated 17th November 2021 has provided certain clarifications on for issues relating to GST refunds which are as under:
Issue No.1 : Time period in case of refund of excess in electronic cash ledger
Whether the provisions of subsection (1) of section 54 of the CGST Act regarding time period,
within which an application for refund can be filed, would be applicable in cases of refund of
excess balance in electronic cash ledger?
Clarification
No, the provisions of sub-section (1) of section 54 of the CGST Act regarding time period, within which an application for refund can be filed,would not be applicable in cases of refund of excess balance in electronic cash ledger.
Issue No. 2: Requirement of Certification
Whether certification/ declaration under Rule 89(2)(l) or 89(2)(m) of CGST Rules, 2017 is required to be furnished along with the application for refund of excess balance in electronic cash ledger?
Clarification
No, furnishing of certification/ declaration under Rule 89(2)(l) or 89(2)(m) of the CGST Rules, 2017 for not passing the incidence of tax to any other person is not required in cases of refund of excess balance in electronic cash ledger as unjust enrichment clause is not applicable in such cases.
Issue No. 3:Refund of TDS / TCS
Whether refund of TDS/TCS deposited in electronic cash ledger under the provisions of section 51
/52 of the CGST Act can be refunded as excess balance in cash ledger?
Clarification
The amount deducted/collected as TDS/TCS by TDS/ TCS deductors under the provisions of section 51 /52 of the CGST Act, as the case may be, and credited to electronic cash ledger of the registered
person, is equivalent to cash deposited in electronic cash ledger. It is not mandatory for the registered person to utilise the TDS/TCS amount credited to his electronic cash ledger only for the purpose for discharging tax liability. The registered person is at full liberty to discharge his tax liability in respect of the supplies made by him during a tax period, either through debit in electronic credit ledger or through debit in electronic cash ledger, as per his choice and availability
of balance in the said ledgers.
Any amount, which remains unutilized in electronic cash ledger, after discharge of tax dues and other dues payable under CGST Act and rules made thereunder, can be refunded to the registered person as excess balance in electronic cash ledger in accordance with the proviso to sub-section
(1) of section 54, read with sub-section (6) of section 49 of CGST Act
Issue No.4: Relevant date of determining refund
Whether relevant date for the refund of tax paid on supplies regarded as deemed export by
recipient is to be determined as per clause (b) of Explanation (2) under section 54 of CGST Act and if so, whether the date of return filed by the supplier or date of return filed by the recipient will be relevant for the purpose of determining relevant date for such refunds?
Clarification:
Clause (b) of Explanation (2) under Section 54 of CGST Act reads as under:
“(b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such
deemed exports is furnished;”
On perusal of the above, it is clear that clause (b) of Explanation (2) under section 54 of the CGST Act is applicable for determining relevant date in respect of refund of amount of tax paid on the supply of goods regarded as deemed exports irrespective of the fact whether the refund claim is filed by the supplier or by the recipient.
Further, as the tax on the supply of goods, regarded as deemed export, would be paid by
the supplier in his return, therefore, the relevant date for purpose of filing of refund claim for refund of tax paid on such supplies would be the date of filing of return, related to such supplies, by the supplier.
READ / DOWNLOAD ORDER:
***
Subscribe to our portal and get FREE Tax e-books, quality articles and updates on your e-mail.
Resolve your GST queries from national level experts on GST free of cost.
Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
