For the period July, 2017 to May, 2018, no ITC is availed of the compensation cess paid on the inputs received during this period. Circular No.45/19/2018-GST dated 30-05-2018 clarified that refund of accumulated ITC of compensation cess on account of zero-rated supplies made under Bond or Letter of Undertaking is available even if the exported product is not subject to levy of cess.

Clarification on Disbursal of refund amounts after sanction

Section 56 of the CGST Act clearly states that if any tax ordered to be refunded is not refunded within 60 days of the date of receipt of application, interest at the rate of 6% on the refund amount starting from the date immediately after the expiry of 60 days from the date of receipt of application (ARN) till the date of refund i.e. date on when the amount has been credited to the bank account of the claimant, shall have to be paid to the claimant. Accordingly, all tax authorities are advised to issue the final sanction orders in Form GST RFD‐06 within 45 days of the date of generation of ARN.

Clarification on calculation of refund of accumulated ITC on account of inverted duty structure

Where there are multiple inputs attracting different rates of tax, in the formula provided in rule 89(5) of the CGST Rules, the term Net ITC covers the ITC availed on all inputs in the relevant period, irrespective of their rate of tax.

Similarly, Section 2(59) of the CGST Act defines inputs as any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business. Therefore, clearly, the intent of the law is not to allow refund of tax paid on input services or capital goods as part of refund of input tax credit accumulated on account of inverted duty structure

Other Clarifications

Ø  Physical submission of refund claims with jurisdictional proper officer

Ø  Disbursal of refund amounts after sanction

Ø  Refund applications that have been generated on the portal but not physically received in the jurisdictional tax offices

Ø  Non-consideration of ITC of GST paid on invoices of earlier tax period availed in subsequent tax period

( Circular No. 79/53/2018-GST )