Circular No. 137/07/2020-GST [C10-4SE]

Circular No.136/06/2020-GST, dated 03.04.2020 had been issued to clarify doubts regarding relief measures taken by the Government for facilitating taxpayers in meeting the compliance requirements under various provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”) on account of the measures taken to prevent the spread of Novel Corona Virus (COVID-19). It has been brought to the notice of the Board that certain challenges are being faced by taxpayers in adhering to the compliance requirements under various other provisions of the CGST Act which also need to be clarified.

2. The issues raised have been examined and in order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act hereby clarifies as under:

S. Issue Clarification No.

1. An advance is received In case GST is paid by the supplier on advances received for by a supplier for a a future event which got cancelled subsequently and for Service contract which which invoice is issued before supply of service, the supplier subsequently got is required to issue a “credit note” in terms of section 34 of cancelled. The the CGST Act. He shall declare the details of such credit supplier has issued the notes in the return for the month during which such credit invoice before supply note has been issued. The tax liability shall be adjusted in of service and paid the the return subject to conditions of section 34 of the CGST GST thereon. Act. There is no need to file a separate refund claim. Whether he can claim refund of tax paid or is However, in cases where there is no output liability against he required to adjust which a credit note can be adjusted, registered persons may

Circular No. 137/07/2020-GST

his tax liability in his proceed to file a claim under “Excess payment of tax, if any” returns ? through FORM GST RFD-01.

2. An advance is received In case GST is paid by the supplier on advances received for by a supplier for a an event which got cancelled subsequently and for which no Service contract which invoice has been issued in terms of section 31 (2) of the got cancelled CGST Act, he is required to issue a “refund voucher” in subsequently. The terms of section 31 (3) (e) of the CGST Act read with rule supplier has issued 51 of the CGST Rules. receipt voucher and paid the GST on such The taxpayer can apply for refund of GST paid on such advance received. advances by filing FORM GST RFD-01 under the category Whether he can claim “Refund of excess payment of tax”. refund of tax paid on advance or he is required to adjust his tax liability in his returns?

3. Goods supplied by a In such a case where the goods supplied by a supplier are supplier under cover returned by the recipient and where tax invoice had been of a tax invoice are issued, the supplier is required to issue a “credit note” in returned by the terms of section 34 of the CGST Act. He shall declare the recipient. Whether he details of such credit notes in the return for the month during can claim refund of which such credit note has been issued. The tax liability shall tax paid or is he be adjusted in the return subject to conditions of section 34 required to adjust his of the CGST Act. There is no need to file a separate refund tax liability in his claim in such a case. returns ? However, in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under “Excess payment of tax, if any” through FORM GST RFD-01.

4. Letter of Undertaking Notification No. 37/2017-Central Tax, dated 04.10.2017, (LUT) furnished for requires LUT to be furnished for a financial year. However, the purposes of zero- in terms of notification No. 35/2020 Central Tax dated rated supplies as per 03.04.2020, where the requirement under the GST Law for provisions of section furnishing of any report, document, return, statement or such

16 of the Integrated other record falls during between the period from Goods and Services 20.03.2020 to 29.06.2020, has been extended till Tax Act, 2017 read 30.06.2020. with rule 96A of the CGST Rules has Therefore, in terms of Notification No. 35/2020-Central expired on 31.03.2020. Tax, time limit for filing of LUT for the year 2020-21 shall Whether a registered stand extended to 30.06.2020 and the taxpayer can continue person can still make a to make the supply without payment of tax under LUT zero-rated supply on provided that the FORM GST RFD-11 for 2020-21 is such LUT and claim furnished on or before 30.06.2020. Taxpayers may quote the refund accordingly or reference no of the LUT for the year 2019-20 in the relevant does he have to make documents.

Circular No. 137/07/2020-GST

such supplies on payment of IGST and claim refund of such IGST ?

5. While making the As per notification No. 35/2020-Central Tax dated payment to recipient, 03.04.2020, where the timeline for any compliance required amount equivalent to as per sub-section (3) of section 39 and section 51 of the one per cent was Central Goods and Services Tax Act, 2017 falls during the deducted as per the period from 20.03.2020 to 29.06.2020, the same has been provisions of section extended till 30.06.2020. Accordingly, the due date for

51 of Central Goods furnishing of return in FORM GSTR-7 along with deposit and Services Tax Act, of tax deducted for the said period has also been extended 2017 i. e. Tax till 30.06.2020 and no interest under section 50 shall be Deducted at Source leviable if tax deducted is deposited by 30.06.2020. (TDS). Whether the date of deposit of such payment has also been extended vide notification N. 35/2020-Central Tax dated 03.04.2020?

6. As per section 54 (1), a As per notification No. 35/2020-Central Tax dated person is required to 03.04.2020, where the timeline for any compliance required make an application as per sub-section (1) of section 54 of the Central Goods before expiry of two and Services Tax Act, 2017 falls during the period from years from the 20.03.2020 to 29.06.2020, the same has been extended till relevant date. If in a 30.06.2020. Accordingly, the due date for filing an particular case, date application for refund falling during the said period has also for making an been extended till 30.06.2020. application for refund expires on 31.03.2020, can such person make an application for refund before 29.07.2020?

4. It is requested that suitable trade notices may be issued to publicize the contents of this circular.

5. Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow.