Circular No.: 45/19/2018-GST
Date of Circular: 30th May 2018
Relevant Sections and Rules:
- Central GST Act, 2017:
- Section 54: Refund
- Section 10: Composition scheme
- Section 168(1): Power to issue instructions
- Integrated GST Act, 2017:
- Section 16: Zero-rated supply
- CGST Rules, 2017:
- Rule 96(10): Refund restriction on exporters
- Rule 59, 62, 63, 65: Return filing for special entities
- Compensation to States Act, 2017:
- Sections 8 and 11(2): Levy and utilization of compensation cess
- Relevant Notifications:
- 40/2017-CT(R), 41/2017-IT(R), 48/2017-CT, 78 & 79/2017-Customs
Summary of Circular:
This circular provides clarifications on various refund-related issues under GST for uniform implementation.
- Refunds by ISDs, Composition Dealers & NRTPs:
Refunds of electronic cash/credit ledger balances can be claimed by:
- ISD: Based on GSTR-6
- Composition Taxpayer: Based on GSTR-4
- Non-Resident Taxable Person: Based on GSTR-5
GSTR-1 and GSTR-3B are not required for these refund claims.
- Export Refund Claim Errors in GSTR-3B:
For periods 01.07.2017 to 31.03.2018, if zero-rated supplies (exports or SEZ) were wrongly shown under GSTR-3B 3.1(a) instead of 3.1(b), refund claims can still be filed in RFD-01A if the total IGST in 3.1(a)+(b)+(c) covers the claim amount. - Refund of Compensation Cess on Inputs (e.g., Coal):
Allowed if:
- Cess paid on input (like coal),
- Output (e.g., aluminium) is exported under LUT/Bond.
Not allowed if exports are made on payment of IGST, because cess credit cannot be used to pay IGST.
- Export of Non-GST or Exempt Goods – Bond/LUT Not Required:
When non-GST or exempt goods (e.g., petrol, alcohol) are exported:
- No LUT/Bond required.
- Exporter may still claim refund of unutilized ITC (central, state, IGST, cess).
- Rule 96(10) – Export Restriction on Refund of IGST:
Exporters cannot claim IGST refund on exports if:
- They directly receive inputs under concessional rate/no tax via:
- Notification 40/2017-CT(R), 41/2017-IT(R), 48/2017-CT, 78/2017 & 79/2017-Customs.
Exceptions:
- If inputs are from suppliers not availing such benefits, or
- Supplier’s supplier availed them (indirectly), the restriction does not apply.
- Also, use of capital goods imported under EPCG (Notification 78/79) does not trigger restriction.
Source: Circular No.: 45/19/2018-GST
