CBIC Issues clarification on refund related issues

Central Board of Indirect Taxes and Customs in its circular dated 31st March 2020 has clarified various refund related issues to ensure uniformity in the implementation of the provision of law.

Highlights from the circular:

  • Removes Restriction on clubbing of refund claims across different financial year 
  • Refund of accumulated ITC on account of inverted duty structure where the inversion is due to reduction in the rate of tax would not be applicable in cases where the input and the output supplies are the same.
  • The circular clarifies that the manner of refund of tax paid on supplies other than zero rated supplies will now be admissible proportionate to the respective original mode of payment i.e. in cases of refund, where the tax to be refunded has been paid by debiting both electronic cash and credit ledgers (other than the refund of tax paid on zero-rated supplies or deemed export), the refund to be paid in cash and credit shall be calculated in the same proportion in which the cash and credit ledger has been debited for discharging the total tax liability for the relevant period for which application for refund has been filed.
  • The refund of accumulated ITC shall be restricted to the ITC as per those invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant. Therefore, refund of any input tax credit not reflecting in GSTR-2A would no longer be available as refund.

Click here to read the Notification.