By Clearmytax.in Editorial Team
- Introduction:
Fully electronic refund process through filing of FORM GST RFD-01 and single disbursement of such refund claim was prescribed vide Circular No. 125/44/2019- GST dated 18.11.2019.As per the above Circular, a tax payer while applying for refund inter alia is required to submit a statement of invoices in the format as given in Annexure-B of said Circular. The said statement of invoices is required in case application of refund of unutilized input tax credit is being filed in following situations:
- Refund of unutilized ITC on account of exports without payment of tax
- Refund of unutilized ITC on account of Supplies made to SEZ units/developer without payment of tax
- Refund of ITC unutilized on account of accumulation due to inverted tax structure.
All the above situations are related to refund of ITC relating to zero rated supplies or refund of ITC where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated and fully exempt supplies). Needless to say that only in above situations refund of unutilised input tax credit are allowed as per proviso to Section 54(3) of the CGST Act,2017.
For ready reference the Annexure-B of said Circular is as under:-
2. New Requirement to mention HSN/ SAC in Statement of Invoices:
Post issuance of Circular dated 18.11.2019, references were received by the Govt. from the field formations that HSN wise details of goods and services are not available in FORM GSTR-2A and therefore it becomes very difficult to distinguish ITC on capital goods and/or input services out of total ITC for a relevant tax period. Further such details are also not required to be provided by the applicant in the Statement of Invoices (Annexure-B). It is pertinent to mention here that distinguishing between input, capital goods and services is of utmost importance as credit in respect of capital goods and input services is not available in cases of inverted duty structure, as refund of ITC pertaining to only inputs is permissible as per clause (ii) to proviso of Section 54(3) of the CGST Act,2017.
Accordingly annexure –B of the circular No. 125/44/2019- GST dated 18.11.2019 has been suitably modified for applicants to upload the details of invoices reflecting in their FORM GSTR-2A. The applicant is, in addition to details already prescribed, now required to mention HSN/SAC code which is mentioned on the inward invoices.
However in cases where supplier is not mandated to mention HSN/SAC code on invoice, the applicant need not mention HSN/SAC code in respect of such an inward supply.
The revised format of Statement of invoices to be submitted along with application for refund of ITC is as under:
3. Concluding Remarks:
In view of the amendment made to Statement of Invoices to filed along with refund application of unutilised input tax credit the tax payers need to capture the HSNs of inwards supplies from the invoices received so that no hiccups are faced while filing of refund claim. Anyways in cases where supplier is not mandated to mention HSN/SAC code on invoice, the applicant need not mention HSN/SAC code in respect of such an inward supply.
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.
