Circular No.: 147/03/2021-GST
Date of Circular: 12th March 2021
Relevant Sections and Rules:
- CGST Act, 2017:
- Section 54(1): Refund of tax
- Section 168(1): Power to issue instructions
- CGST Rules, 2017:
- Rule 89(1) and Rule 89(4)
- Notifications Referenced:
- Notification Nos. 16/2020 and 48/2017 – Central Tax
Summary of Circular in Paragraphs (One Clarification Each):
- Refund Claim by Recipient of Deemed Export Supplies:
The circular modifies Para 41 of Circular No. 125/44/2019-GST to allow recipients of deemed export supplies to avail ITC and also claim refund, provided:
- They file refund using FORM GST RFD-01, and
- Debit the claimed amount from their electronic credit ledger.
Earlier restriction disallowing ITC for refund applicants (recipients) has been removed, aligning with Rule 89(1) proviso, which allows refund by either supplier or recipient.
- Extension of Relaxation for Incorrect Reporting in GSTR-3B Table 3.1(a):
Relaxation allowing refund for zero-rated supplies incorrectly reported in Table 3.1(a) instead of 3.1(b) in GSTR-3B (initially applicable only for 01.07.2017 to 30.06.2019) is now extended to cover tax periods up to 31.03.2021.
Refund application in FORM GST RFD-01 can be filed, subject to aggregate refund cap under Tables 3.1(a), 3.1(b), and 3.1(c) of GSTR-3B. - Calculation of Adjusted Total Turnover under Rule 89(4):
Clarifies that for refund under Rule 89(4) (zero-rated supplies without payment of tax), the restriction that turnover of zero-rated supply of goods = not more than 1.5x value of like domestic goods (as amended by Notification No. 16/2020) applies also to Adjusted Total Turnover.
Illustration provided to show refund adjustment where export value exceeds 150% of comparable domestic supply.
For example: If export value is ₹1,750, but the cap is ₹1,500 (1.5 × ₹200 × 5 units), only ₹1,500 is included in both zero-rated turnover and adjusted total turnover, reducing refund accordingly.
Source: Circular No.: 147/03/2021-GST
