The government recently released two new GST circulars on 17th November 2021 to simplify the laws and clarify the issues that taxpayers were facing. The CBIC vide GST Circular No. 165/21/2021 was issued to offer clarification regarding the applicability of Dynamic QR Code on B2C invoices and compliance of GST Notification 14/2020- Central Tax while the CBIC vide GST Circular No. 166/22/2021 was issued to offer clarification on certain GST refund related issues.
Let us break down both these GST circulars and understand the clarifications offered in detail here in this article.
GST Circular No. 165: Clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices and compliance of notification 14/2020- Central Tax dated 21st March 2020
Explanation of the circular:
Case 1: The receiver of services is located outside India and the payment for the services is being received by the supplier through RBI approved modes of payment. However, as per provisions of the IGST Act 2017, the place of supply of such services is in India, then such supply of services is not considered as export of services as per the IGST Act 2017.
Now the confusion that the taxpayers faced was that, in such cases, whether the Dynamic QR
Code is required on the invoice issued for such supply of services, to such recipient located outside India.
The answer to this is No. Wherever an invoice is issued to a recipient who is located outside India for the supply of services for which the place of supply is in India as per the provisions of the IGST Act 2017, and the payment is received by the supplier in convertible foreign exchange or in Indian Rupees wherever permitted by the RBI, such invoice may be issued without having a Dynamic QR Code. This is because a dynamic QR code cannot be used by the recipient located outside India for making payment to the supplier.
GST Circular 166: Clarification on GST Refund related issues
|1.||Whether time period limitations applicable while filling refund of application in case of excess balance in cash Ledger as per provisions of subsection (1) of section 54.||In cases of GST refund of excess balance in the electronic cash ledger (ECL), the refund application can be filled anytime.|
|2.||Whether certification/ declaration under Rule 89(2)(l) or 89(2)(m) of CGST Rules, 2017 is required to be furnished along with the application for refund of excess balance in electronic cash ledger?||No, furnishing of certification/ declaration for not passing the incidence of Tax to any other person is not required in cases of refund of excess balance in electronic cash ledger as unjust enrichment clause is not applicable in such cases.
Rule 89(2)(1) required a declaration to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed does not exceed Rs. 2 lakh.
Rule 89(2)(m) required a certificate issued by a CA or a cost accountant to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed exceeds Rs. 2 lakh.
|3.||Whether refund of TDS /TCS deposited in the electronic cash ledger under the provisions of section 51/52 of the CGST Act can be refunded as excess balance in the cash ledger?||Yes, any amount, which remains unutilized in electronic cash ledger, after discharge of tax dues and other dues payable under CGST Act and rules made thereunder can be refunded to the registered person as excess balance in electronic cash ledger in accordance with the proviso to sub-section (1) of section 54, read with sub-section (6) of section 49 of CGST Act.|
|4.||Whether relevant date for the refund of tax paid on supplies regarded as deemed export by the recipient is to be determined as per clause (b) of Explanation (2) under section 54 of CGST Act? If so, whether the date of return filed by the supplier or date of return filed by the recipient will be relevant for the purpose of determining relevant
date for such refunds?
The relevant date for purpose of filing the ‘refund claim’ for a refund of tax paid on deemed export would be the date of filing of the return, related to such supplies, by the supplier.
Clause (b) of Explanation (2) under Section 54 of CGST Act reads as under:
In the case of the supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such
On perusal of the above, it is clear that
Further, as the tax on the supply of goods, regarded as deemed export, would be paid by the supplier in his return, therefore, the relevant date for purpose of filing of refund claim for refund of tax paid on such supplies
To explain the above four sections further, here are the short pointers of the same:
1- GST Refund application of the excess balance in the Electronic Cash Ledger (ECL) may be made after the expiry of two years from the relevant date. No time period is needed in this case.
2- Declaration that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person required in a case where the amount of refund claimed does not exceed Rs. 2 lakh is not applicable in case of a refund of excess balance in the ECL.
A Certificate issued by a CA or a cost accountant is required where the amount of refund claimed exceeds Rs. 2 lakh isn’t applicable in case of a refund of excess balance in the ECL.
3- The TDS/ TCS amount, which remains unutilized in ECL after discharge of tax dues and other dues payable under CGST Act and rules made thereunder, CAN be refunded to the registered person as excess balance in the electronic cash ledger
4- Relevant date for the refund of tax paid on supplies regarded as deemed export by the recipient is to be determined on the basis of the ‘date of filing of the return’ related to such supplies made by the supplier.
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