Circular No. 166/22/2021-GST [C10-5QP]

Various representations have been received from taxpayers and other stakeholders seeking clarification in respect of certain issues relating to refund. The issues have been examined. In order to ensure uniformity in the implementation of the provisions of the law across field formations, the Board, in exercise of its powers conferred by section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies each of these issues as under:

S. No. Issue Clarification

1. Whether the provisions of sub- No, the provisions of sub-section (1) of section (1) of section 54 of the section 54 of the CGST Act regarding time CGST Act regarding time period, period, within which an application for within which an application for refund can be filed,would not be applicable refund can be filed, would be in cases of refund of excess balance in applicable in cases of refund of electronic cash ledger. excess balance in electronic cash ledger?

2. Whether certification/ declaration No, furnishing of certification/ declaration under Rule 89(2)(l) or 89(2)(m) of under Rule 89(2)(l) or 89(2)(m) of the CGST CGST Rules, 2017 is required to be Rules, 2017 for not passing the incidence of furnished along with the application tax to any other person is not required in for refund of excess balance in cases of refund of excess balance in electronic cash ledger as

electronic cash ledger? unjust enrichment clause is not applicable in such cases.

3. Whether refund of TDS/TCS The amount deducted/collected as deposited in electronic cash ledger TDS/TCS by TDS/ TCS deductors under the under the provisions of section 51 provisions of section 51 /52 of the CGST /52 of the CGST Act can be Act, as the case may be, and credited to refunded as excess balancein cash electronic cash ledger of the registered ledger? 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 debitin 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.

4. Whether relevant date for the Clause (b) of Explanation (2) under Section refund of tax paid on supplies 54 of CGST Act reads as under: regarded as deemed export by recipient is to be determined as per “(b) in the case of supply of goods clause (b) of Explanation (2) under regarded as deemed exports where section 54 of CGST Act and if so, a refund of tax paid is available in whether the date of return filed by respect of the goods, the date on the supplier or date of return filed by which the return relating to such the recipient will be relevant for the deemed exports is furnished;” purpose of determining relevant date for such refunds? 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.

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

3. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board. Hindi version will follow.