Circular No. 197/09/2023- GST dated 17th July 2023

Key pointers – 

• In view of the insertion of clause (aa) in sub-section (2) of section 16 of the CGST Act, 2017 w.e.f. 1st January, 2022 doubts are being raised as to whether refund of the accumulated input tax credit under section 54(3) of CGST Act shall be admissible on the basis of the input tax credit as reflected in FORM GSTR-2A or on the basis of that available as per FORM GSTR-2B
• It is further clarified that as the said amendments in section 16(2)(aa) of CGST Act and Rule 36(4) of CGST Rules have been brought into effect from 01.01.2022, therefore, the said restriction on availability of refund of accumulated input tax credit for a tax period on the basis of the credit available as per FORM GSTR-2B for the said tax period or for any of the previous tax periods, shall be applicable for the refund claims for the tax period of January 2022 onwards.
• In accordance with the Circular No. 125/44/2019-GST dated 18.11.2019 an undertaking was inserted in FORM GST RFD-01. Further as the FORM GSTR-2 and FORM GSTR-3 have been omitted, the same is being deleted from the para 7 in the Circular No. 125/44/2019-GST dated 18.11.2019 as well as from the said undertaking. Also Annexure-A to the Circular No. 125/44/2019-GST dated 18.11.2019 also stands amended.
• Consequent to amendment in definition of the “Turnover of zero-rated supply of goods”, it has been clarified that the same value of zero-rated/ export supply of goods, as calculated as per amended definition of “Turnover of zero-rated supply of goods”, needs to be taken into consideration while calculating “turnover in a state or a union territory”, and accordingly, in “adjusted total turnover” for the purpose of sub-rule (4) of Rule 89.
• In the cases subsequent to export of the goods or realization of payment in case of export of services, as the case may be, the said exporters would be entitled to claim refund of the integrated tax so paid earlier on account of goods not being exported, or as the case be, the payment not being realized for export of services, within the time frame prescribed in clause (a) or (b), as the case may be, of sub-rule (1) of rule 96A. It is further being clarified that no refund of the interest paid in compliance of sub-rule (1) of rule 96A shall be admissible.

#Need for GST in India