GST Circular No 135/2020

1) Restriction on Bunching of refund claims across Financial Years is removed via this circular
2) Refund being allowed on inverted duty structure under section 54(3)(ii) of the CGST Act, where the credit has accumulated due to rate of tax on inputs being higher than rate of tax on output. There were certain situations in trading of goods where the rate of tax at the time of purchase of goods were higher say 18% but the same was reduced to 12% through tax rate reduction by the time of sale. Such cases also claimed under inverted duty structure since the rate of tax on input is higher than rate of tax on output. However, CBEC through this circular 135/05/2020 has disallowed such cases to be considered for inverted duty structure therefore refund will not be available for such cases.
3) Till now the refund was paid in cash. Now with insertion of Notification 16/2020 and clarification through this circular, refund will be paid in proportion to the respective original mode of payment (other than zero rated supplies and deemed exports)
4) Basis this circular, the refund on accumulated ITC shall be restricted to the invoices uploaded through GSTR1 and reflecting in 2A
5) Application for refund should also include HSN/SAC code which is mentioned on the inward invoices. In cases where supplier is not mandated to quote HSN/SAC code in respect of such an invoice, the same may not be required to be given in refund application