REGARDING CLARIFICATION ON REFUND IN GST

REGARDING CLARIFICATION ON REFUND IN GST
Circular No. 1819016/315 Dated:- 12-6-2018 Uttar Pradesh SGST
GST – States
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Document 1
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Circular No. 45/19/2018-GST
F. No. CBEC/20/16/4/2018-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
G

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(CGST Act for short) hereby clarifies the issues raised as below:
3. Claim for refund filed by an Input Service Distributor, a person paying tax under
section 10 or a non-resident taxable person:
3.1
Doubts have been raised in case of claims for refund filed by an Input Service
Distributor (ISD for short), a person paying tax under section 10 of the CGST Act
(composition taxpayer for short) or a non-resident taxable person in light of para 2.0 of
Circular No. 24/24/2017-GST dated 21.12.2017 which mandates that the refund claim for a
tax period may be filed only after filing the details in FORM GSTR-1 for the said tax period
and that it is also to be ensured that a valid return in FORM GSTR-3B has been filed for the
last tax period before the one in which the refund application is being filed.
3.2 In this regard, attention is invited to sub-section (1) of section 37 of the CGST Act
read with rule 59 of the Central Goods and Services Tax Rules, 2017 (CGST Rules for short)
wh

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balance in the
electronic cash and/or credit ledger by a non-resident taxable person, the filing of the details
in FORM GSTR-1 and the return in FORM GSTR-3B is not mandatory. Instead, the return
in FORM GSTR-4 filed by a composition taxpayer, the details in FORM GSTR-6 filed by
an ISD and the return in FORM GSTR-5 filed by a non-resident taxable person shall be
sufficient for claiming the said refund.
4.
Application for refund of integrated tax paid on export of services and supplies
made to a Special Economic Zone developer or a Special Economic Zone unit:
4.1
It has been represented that while filing the return in FORM GSTR-3B for a given
tax period, certain registered persons committed errors in declaring the export of services on
payment of integrated tax or zero rated supplies made to a Special Economic Zone developer
or a Special Economic Zone unit on payment of integrated tax. They have shown such
supplies in the Table under column 3.1(a) instead of showing them i

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than the aggregate amount of integrated tax/cess
mentioned in the Table under columns 3.1(a), 3.1(b) and 3.1(c) of FORM GSTR-3B filed for
the corresponding tax period.
5. Refund of unutilized input tax credit of compensation cess availed on inputs in
cases where the final product is not subject to the levy of compensation cess:
5.1 Doubts have been raised whether an exporter is eligible to claim refund of unutilized
input tax credit of compensation cess paid on inputs, where the final product is not leviable to
compensation cess. For instance, cess is levied on coal, which is an input for the manufacture
of aluminum products, whereas cess is not levied on aluminum products.
5.2
In this regard, section 16(2) of the Integrated Goods and Services Tax Act, 2017
(IGST Act for short) states that, subject to the provisions of section 17(5) of the CGST Act,
credit of input tax may be availed for making zero rated supplies. Further, as per section 8 of
the Goods and Services Tax (C

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iso to section 11(2) of the Cess Act,
which allows the utilization of the input tax credit of cess, only for the payment of cess on the
outward supplies. Accordingly, they cannot claim refund of compensation cess in case of
zero-rated supply on payment of integrated tax.
[
6.
Whether bond or Letter of Undertaking (LUT) is required in the case of zero
rated supply of exempted or non-GST goods and whether refund can be claimed by the
exporter of exempted or non-GST goods?
6.1 As per section 16(2) of the IGST Act, credit of input tax may be availed for making
zero rated supplies, notwithstanding that such supply is an exempt supply. Whereas, as per
section 2 (47) of the CGST Act, exempt supply includes non-taxable supply. Further, as per
section 16(3) of the IGST Act, a registered person making zero rated supply shall be eligible
to claim refund when he either makes supply of goods or services or both under bond or letter
of undertaking (LUT) or makes such supply on payment

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ed Tax
(Rate) dated 23.10.2017, 78/2017-Customs dated 13.10.2017 or 79/2017-Customs dated
13.10.2017?
7.1
Sub-rule (10) of rule 96 of the CGST Rules seeks to prevent an exporter, who is
receiving goods from suppliers availing the benefit of certain specified notifications under
which they supply goods without payment of tax or at reduced rate of tax, from exporting
goods under payment of integrated tax. This is to ensure that the exporter does not utilise the
input tax credit availed on other domestic supplies received for making the payment of
integrated tax on export of goods.
7.2
However, the said restriction is not applicable to an exporter who has procured goods
from suppliers who have not availed the benefits of the specified notifications for making
their outward supplies. Further, the said restriction is also not applicable to an exporter who
has procured goods from suppliers who have, in turn, received goods from registered persons
availing the benefits of these

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eby clarified that this restriction does not apply to
such inward supplies of an exporter.
8.
It is requested that suitable trade notices may be issued to publicize the contents of
this Circular.
9.
Difficulty, if any, in implementation of the above instructions may please be brought
to the notice of the Board. Hindi version would follow.
(Upender Gupta)
Commissioner (GST)
+67
Circular No. 47/21/2018-GST
F. No. CBEC- 20/16/03/2017-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 08th June, 2018
To,
The Principal Chief Commissioners/ Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)/
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarifications of certain issues under GST- regarding
Representations have been received seeking clarification on certain issues under the
GST laws. The same have been examined an

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e component manufacturer on FOC basis
How is servicing of cars involving
both supply of goods (spare parts)
and services (labour), where the
value of goods and services are
shown separately, to be treated
under GST?
In case of auction of tea, coffee,
rubber etc., whether the books of
accounts are required to be
maintained at
every place of
business by the principal and the
auctioneer, and whether they are
eligible to avail input tax credit?
shall not be added to the value of such
supply because the cost of moulds/dies was
not to be incurred by the component
manufacturer and thus, does not merit
inclusion in the value of supply in terms of
section 15(2)(b) of the Central Goods and
Services Tax Act, 2017 (CGST Act for
short).
1.3 However, if the contract between OEM and
component manufacturer was for supply of
components made by using the moulds/dies
belonging to the component manufacturer,
but the same have been supplied by the
OEM to the component manufactur

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e warehouses,
where such goods are stored, as their
additional place of business. The buyer
is also required to disclose such
warehouse as his additional place of
business if he wants to store the goods
purchased through auction in such
warehouses. For the purpose of supply
of tea through a private treaty, the
principal and an auctioneer may also
comply with the said provisions.
(b) The principal and the auctioneer for the
2
3
Ã¡Å¾Å¡Ã¡Å¾Â¶
4
5
In case of transportation of goods by
railways, whether goods can be
delivered even if the e-way bill is
not produced at the time of
delivery?
Whether e-way bill is required in the
following cases-
(i) Where goods transit through
another State while moving from
one area in a State to another area in
the same State.
purpose of auction of tea, coffee,
rubber etc., or the principal and the
auctioneer for the purpose of supply of
tea through a private treaty, are
required to maintain the books of
accounts relating to

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treaty, shall be eligible
to avail input tax credit subject to the
fulfilment of other provisions of the CGST
Act read with the rules made thereunder.
As per proviso to rule 138(2A) of the Central
Goods and Services Tax Rules, 2017 (CGST
Rules for short), the railways shall not deliver
the goods unless the e-way bill is produced at
the time of delivery.
(i) It may be noted that e-way bill generation is
not dependent on whether a supply is inter-
State or not, but on whether the movement of
goods is inter-State or not. Therefore, if the
goods transit through a second State while
moving from one place in a State to another
place in the same State, an e-way bill is
required to be generated.
2.
(ii) Where goods move from a DTA
unit to a SEZ unit or vice versa
located in the same State.
(ii) Where goods move from a DTA unit to a
SEZ unit or vice versa located in the same
State, there is no requirement to generate an e-
way bill, if the same has been exempted under

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ax on goods transferred/sold while being deposited in a warehouse
(hereinafter referred to as the “warehoused goods”) was clarified.
2.
Various references had been received by the Board on the captioned issue which has
now been re-examined by the Board.
3.
It is seen that the “transfer/sale of goods while being deposited in a customs bonded
warehouse” is a common trade practice whereby the importer files an into-bond bill of entry
and stores the goods in a customs bonded warehouse and thereafter, supplies such goods to
another person who then files an ex-bond bill of entry for clearing the said goods from the
customs bonded warehouse for home consumption.
4.
It may be noted that as per sub-section (2) of section 7 of the Integrated Goods and
Services Tax Act, 2017 (hereinafter referred to as the “IGST Act”), the supply of goods
imported into the territory of India, till they cross the customs frontiers of India, is treated as
a supply of goods in the course of inter-Stat

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lue or the
value as per sub-section (8) of section 3 of the CTA (i.e. valuation done at the time of filing
the into-bond bill of entry), whichever is higher.
6.
It is therefore, clarified that integrated tax shall be levied and collected at the time of
final clearance of the warehoused goods for home consumption i.e., at the time of filing the
ex-bond bill of entry and the value addition accruing at each stage of supply shall form part
of the value on which the integrated tax would be payable at the time of clearance of the
warehoused goods for home consumption. In other words, the supply of goods before their
clearance from the warehouse would not be subject to the levy of integrated tax and the same
would be levied and collected only when the warehoused goods are cleared for home
consumption from the customs bonded warehouse.
7. This Circular would be applicable for supply of warehoused goods, while being
deposited in a customs bonded warehouse, on or after the 1st of Ap

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