Circular No.: 70/44/2018-GST
Date of Circular: 26th October 2018
Relevant Sections and Rules:
- Central GST Act, 2017:
- Section 168(1): Power to issue instructions
- CGST Rules, 2017:
- Rule 89(3): Refund of ITC
- Rule 96(10): Restriction on IGST refund on exports
- Rule 89(4B): Refund for deemed exports (EPCG)
- Notifications:
- Notification No. 54/2018-CT dated 09.10.2018 (amending Rule 96(10))
- Notification No. 53/2018-CT dated 09.10.2018 (rescinding Notification No. 39/2018-CT)
- Customs Notifications No. 78/2017-Cus & 79/2017-Cus dated 13.10.2017
- Notification No. 48/2017-CT dated 18.10.2017
Summary of Circular:
This circular addresses two key issues:
(1) Status of refund claims where a deficiency memo has been issued and
(2) Refund eligibility for exporters receiving capital goods under the EPCG scheme.
- Refund Application After Issuance of Deficiency Memo (RFD-03):
- Previously clarified that after a deficiency memo is issued, the original refund claim is closed and the debited ITC is to be re-credited for filing a fresh refund.
- Updated clarification:
- Due to system limitations (GST portal), taxpayers cannot file a fresh refund claim for the same period.
- Therefore, re-credit via RFD-01B is not needed.
- Taxpayers must rectify and resubmit the refund claim under the same ARN (Application Reference Number).
- A separate clarification will be issued for cases where re-credit was already done.
- Refund Eligibility for EPCG Exporters (Rule 96(10) Clarification):
- Prior to 09.10.2018:
- Exporters who imported inputs/capital goods under Customs Notifications 78/2017 & 79/2017 were eligible to claim IGST refund on exports.
- After Notification No. 54/2018-CT (from 09.10.2018):
- Exporters importing goods under Notifications 78/2017 & 79/2017 are not eligible for IGST refund on exports.
- However, exporters receiving capital goods under EPCG scheme, either via:
- Import (Notification No. 79/2017-Cus), or
- Domestic procurement (Notification No. 48/2017-CT),
are still eligible for IGST refund on exports.
- All previous circulars on this issue are superseded.
Source: Circular No.: 70/44/2018-GST
