GST Update – Clarifications to certain issued addressed via circular No. 137/07/20 dated 13-04-2020

S.N.

Issue

Clarification

1

Advance received by a supplier for service contract which subsequently got cancelled. The supplier has issued the invoice before supply of service and paid the GST thereon. Whether he can claim refund of tax paid or is he  required to adjust his tax in his returns?

If GST is paid on advances received for future event which got cancelled subsequently and for which invoice is issued, the supplier is required to issue a “credit note”. The tax liability shall be adjusted in the return. However, in cases where there is no output liability against which a credit note can be adjusted, tax payer can file refund claim under “Refund of excess payment of tax if any” option

2

In above scenario, what will happen in case the supplier has issued “receipt voucher” instead of invoice and paid GST thereon.

The supplier is required to issue a “refund voucher”. The taxpayer can apply for refund of GST paid under the same category as above

3

Goods supplied by a supplier under cover of a tax invoice are returned by the recipient. Whether supplier can claim refund of tax paid or is he required to adjust his tax liability in his returns?

The supplier is required to issue “credit note”. The tax liability shall be adjusted on reporting of credit note in return. However, in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under “Excess payment of tax, if any”

4

LUT furnished for the purposes of zero-rated supplies has expired on 31.03.2020. Whether a registered person can still make a zero-rated supply on such LUT and claim refund accordingly or does he have to make such supplies on payment of IGST and claim refund of such IGST?

LUT to be furnished for a financial year. However, in terms of notification No. 35/2020 Central Tax dated 03.04.2020, time limit for filing of LUT for the year 2020-21 shall stand extended to 30.06.2020 and the taxpayer can continue to make the supply by quoting existing LUT without payment of tax provided that LUT in GST RFD-11 for 2020-21 is furnished on or before 30.06.2020.

5

It is required to make an application for refund before expiry of two years from the relevant date. If in a particular case, date for making an application for refund expires on 31.03.2020; can such person make an application for refund before 29.07.2020?

In terms of notification No. 35/2020 Central Tax dated 03.04.2020, the due date for filing an application for refund falling during the period 20-3-20 to 29-6-20 has been extended till 30.06.2020.

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