Manual filing and processing of refund claims in respect of zero-rated supplies

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OFFICE OF COMMISSIONER OF CUSTOMS (Export-II)  

NEW CUSTOM HOUSE, BALLARD ESTATE, MUMBAI-400 001 F.No.S/26-Misc-54/2017 DBK

Date: 23.11.2017 PUBLIC NOTICE NO. 132 /2017

Sub – Manual filing and processing of refund claims in respect of zero-rated supplies - reg.
Attention of the trade is invited to Board’s Circular No. 17/17/2017-GST issued vide F. No. 349/169/2017-GST dated 15th November 2017.

Due to the non-availability of the refund module on the common portal, it has been decided by the competent authority, on the recommendations of the Council, that the applications/documents/forms pertaining to refund claims on account of zero-rated supplies shall be filed and processed manually till further orders. Therefore, in exercise of the powers conferred by sub-section (1) of section 168 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’) and for the purpose of ensuring uniformity, the following conditions and procedure are laid down for the manual filing and processing of the refund claims:

2.1
As per sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the IGST Act’) read with clause (i) of sub-section (3) and sub-section (6) of section 54 of the CGST Act and rules 89 to 96A of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as ‘the CGST Rules’), a registered person may make zero-rated supplies

of section 54 of the CGST Act and rules 89 to 96A of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as ‘the CGST Rules’), a registered person may make zero-rated supplies of goods or services or both on payment of integrated tax and claim refund of the tax so paid, or make zero-rated supplies of goods or services or both under bond or Letter of Undertaking without payment of integrated tax and claim refund of unutilized input tax credit in relation to such zero rated supplies.

2.2
The refund of integrated tax paid on goods exported out of India is governed by rule 96 of the CGST Rules. The shipping bill filed by an exporter shall be deemed to be an application for refund in such cases. The application shall be deemed to have been filed only when export manifest or export report is filed and the applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR- 3B, as the case may be. Upon receipt of the information regarding furnishing of a valid return in FORM GSTR-3 or FORM GSTR-3B, as the case may be, from the common portal, the system designated by the Customs shall process the claim for refund and an amount equal to the integrated tax paid in respect of such export shall be electronically credited to the bank account of the applicant. Any order regarding withholding of such refund or its further sanction respectively in PART-B of FORM GST RFD-07 or FORM GST RFD-06 shall be done manually till the refund module is operational on the common portal.

ng withholding of such refund or its further sanction respectively in PART-B of FORM GST RFD-07 or FORM GST RFD-06 shall be done manually till the refund module is operational on the common portal.

2.3
The application for refund of integrated tax paid on zero-rated supply of goods to a Special Economic Zone developer or a Special Economic Zone unit or in case of zero-rated supply of services (that is, except the cases covered in paragraph 2.2 above and para 2.4 below) is required to be filed in FORM GST RFD-01A (as notified in the CGST Rules vide notification No. 55/2017 – Central Tax dated 15.11.2017) by the supplier on the common portal and a print out of the said form shall be submitted before the jurisdictional proper officer along with all necessary documentary evidences as applicable (as per the details in statement 2 or 4 of Annexure to FORM GST RFD – 01), within the time stipulated for filing of such refund under the CGST Act.

2.4
The application for refund of unutilized input tax credit on inputs or input services used in making such zero-rated supplies shall be filed in FORM GST RFD-01A on the common portal and the amount claimed as refund shall get debited in accordance with sub-rule (3) of rule 86 of the

used in making such zero-rated supplies shall be filed in FORM GST RFD-01A on the common portal and the amount claimed as refund shall get debited in accordance with sub-rule (3) of rule 86 of the

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CGST Rules from the amount in the electronic credit ledger to the extent of the claim. The common portal shall generate a proof of debit (ARN- Acknowledgement Receipt Number) which would be mentioned in the FORM GST RFD-01A submitted manually, along with the print out of FORM GST RFD-01A to the jurisdictional proper officer, and with all necessary documentary evidences as applicable (as per details in statement 3 or 5 of Annexure to FORM GST RFD-01), within the time stipulated for filing of such refund under the CGST Act.

2.5
The registered person needs to file the refund claim with the jurisdictional tax authority to which the taxpayer has been assigned as per the administrative order issued in this regard by the Chief Commissioner of Central Tax and the Commissioner of State Tax. In case such an order has not been issued in the State, the registered person is at liberty to apply for refund before the Central Tax Authority or State Tax Authority till the administrative mechanism for assigning of taxpayers to respective authority is implemented. However, in the latter case, an undertaking is required to be submitted stating that the claim for sanction of refund has been made to only one of the authorities.

spective authority is implemented. However, in the latter case, an undertaking is required to be submitted stating that the claim for sanction of refund has been made to only one of the authorities. It is reiterated that the Central Tax officers shall facilitate the processing of the refund claims of all registered persons whether or not such person was registered with the Central Government in the earlier regime.

2.6
Once such a refund application in FORM GST RFD-01A is received in the office of the jurisdictional proper officer, an entry shall be made in a refund register to be maintained for this purpose with the following details – Table-1 Sl.
No. Applicant name GSTIN Date of receipt of application Period to which th claim
pertains Nature of refund –
Refund of integrated tax paid/ Refund of unutilized ITC Amount of refun claimed Date of
issue of acknowle- dgment in FORM
GST
RFD-02 Date of receipt of complete
application (as mentioned in
FORM GST
RFD-02) 1
2
3
4
5
6
7
8
9

2.7
Further, all communication in regard to the FORMS mentioned below shall be done manually, within the timelines as specified in the relevant rules, till the module is operational on the common portal, and all such communications shall also be recorded appropriately in the refund register as discussed in the succeeding paragraphs –

Sl. No.
FORM
Details
Relevant provision of the CGST Rules, 2017
1.
FORM GST RFD-02
Acknowledgement
Rules 90(1) and 90(2)
2.
FORM GST RFD-03
Deficiency memo
Rule 90(3)
3.

Sl. No.
FORM
Details
Relevant provision of the CGST Rules, 2017
1.
FORM GST RFD-02
Acknowledgement
Rules 90(1) and 90(2)
2.
FORM GST RFD-03
Deficiency memo
Rule 90(3)
3.
FORM GST RFD-04
Provisional refund order
Rule 91(2)
4.
FORM GST RFD-05
Payment advice
Rules 91(3), 92(4), 92(5)
5.
FORM GST RFD-06
Refund sanction/Rejection ord Rules 92(1), 92(3), 92(4), 92 (5) and 96(7)
6.
FORM GST RFD-07
Order for complete adjustment/withholding of sanctioned refund
Rules 92(1), 92(2) and 96(6)
7.

FORM GST RFD-08
Notice for rejection of application for refund
Rule 92(3)

FORM GST RFD-09
Reply to show cause notice
Rule 92(3)

2.8
The processing of the claim till the provisional sanction of refund shall be recorded in the refund register as in the table indicated below –

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Table 2

Date of
issue Deficiency Memo FORM
GST
RFD-03
Date of
Receipt of reply
from applicant
Date of issue provisional
refund
order in
FORM GST-RFD-04
Amount of
refund
claimed
Amount of
provisional
refund sanctioned
Date of issue of
Payment
Advice
in FORM GST
RFD-05

CT ST/UTT IT cess
1 2 3 4 5 6 7 8 9

2.9
After the sanction of provisional refund, the claim shall be processed and the final order issued within sixty days of the date of receipt of the complete application form.

4 5 6 7 8 9

2.9
After the sanction of provisional refund, the claim shall be processed and the final order issued within sixty days of the date of receipt of the complete application form. The process shall be recorded in the refund register as in the table indicated below –

Table 3

Date of
issue of notice,
if any rejection refund in
FORM
Date receipt reply, if any to
SCN FORM
Date of issue Refund sanction/ rejection order FORM
GST
RFD-06
Total
amount of refund sanctioned
Date of
issue Payment Advice FORM
GST
RFD-05
Amount of
Refund rejected
Date of issue of
order for
adjustment sanctioned
refund/
withholding
GST RFD-08 GST RFD-08

REFUND IN FORM GST RFD-07

CT ST/ UTT IT cess
CT ST /UTT IT cess
1 2 3 4 5 6 7 8 9 10 11 12 13

2.10 After the refund claim is processed in accordance with the provisions of the CGST Act and the rules made thereunder and where any amount claimed as refund is rejected under rule 92 of the CGST Rules, either fully or partly, the amount debited, to the extent of rejection, shall be re-credited to the electronic credit ledger by an order made in FORM GST PMT-03. The amount would be credited by the proper officer using FORM GST RFD-01B (as notified in the CGST Rules vide notification No. 55/2017 – Central Tax dated 15.11.2017) subject to the provisions of rule 93 of the CGST Rules.

the proper officer using FORM GST RFD-01B (as notified in the CGST Rules vide notification No. 55/2017 – Central Tax dated 15.11.2017) subject to the provisions of rule 93 of the CGST Rules.

For the sake of clarity and uniformity, the entire process of filing and processing of refunds manually is tabulated as below:

3.1 Filing of Refund Claims:

Sl.
No.
Category of Refund
Process of Filing
1.
Refund of IGST paid on export of goods
No separate application is required as
shipping bill itself will be treated as
application for refund.

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2 Refund of IGST paid on export of services /
zero rated supplies to SEZ units or
SEZ developers
Printout of FORM GST RFD-01A needs
to be filed manually with the jurisdictional
GST officer (only at one place - Centre
or State) along with relevant
documentary evidences, wherever applicable. 3.
Refund of unutilized input tax credit due to accumulation of credit of tax paid on
inputs or input services used in making
zero-rated supplies of goods or services or both
FORM GST RFD-01A needs to be filed
on the common portal. The amount of
credit claimed as refund would be debited
in the electronic credit ledger and proof of
debit needs to be generated on the
common portal. Printout of the
FORM GST RFD- 01A needs to be
submitted before the jurisdictional GST
officer along with necessary
documentary evidences, wherever
applicable.

erated on the
common portal. Printout of the
FORM GST RFD- 01A needs to be
submitted before the jurisdictional GST
officer along with necessary
documentary evidences, wherever
applicable.

3.2
Steps to be followed for processing of Refund Claims:
Three different refund registers are to be maintained for record keeping of the manually sanctioned refunds – for receipts, sanction of provisional refunds and sanction of final refunds. The steps are as follows:

Step No. Action to be Taken
Step-1
Entry to be made in the Refund register for receipt of refund applications
Step-2
Check for completeness of application as well as availability of the supporting
documents in totality. Once completeness in all respects is ascertained,
acknowledgement in FORM GST RFD-02 shall be issued within 15 days from the
date of filing of the application and entry shall be made in the Refund register for
receipt of refund applications
Step-3

 All communications (issuance of deficiency memo, issuance of provisional and
final refund orders, payment advice etc.) shall be done in the format prescribed in Forms appended to the CGST Rules, and shall be done manually (i.e. not on common portal) within the timelines prescribed in the rules;
 Processing for grant of provisional refund shall be completed within 7 days as per CGST Rules and details to be maintained in the register for provisional
refunds.

nes prescribed in the rules;
 Processing for grant of provisional refund shall be completed within 7 days as per CGST Rules and details to be maintained in the register for provisional
refunds. Bifurcation of the taxes to be refunded under CGST (CT) / SGST (ST) /UTGST (UT) /IGST (IT) /Cess shall be maintained in the
register mandatorily;
 After the sanction of the provisional refund, final order is to be issued within
sixty days (after due verification of the documentary evidences) of the date of
receipt of the complete application form. The details of the finally sanctioned
refund and rejected portion of the refund along with the breakup (CT / ST / UT / IT/ Cess) to be maintained in the final refund register;  The amount not sanctioned and eligible for re-credit is to be re-credited to electronic credit ledger by an order made in FORM GST PMT-03. The actual
credit of this amount will be done by the proper officer in FORM GST
RFD-01B.

3.3
Detailed procedure for manual processing of refund claims:

The detailed procedure for disposal of Refund claims filed manually is as under:

he proper officer in FORM GST
RFD-01B.

3.3
Detailed procedure for manual processing of refund claims:

The detailed procedure for disposal of Refund claims filed manually is as under:

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MANUAL PROCESSING OF REFUND
STEPS
REMARKS
LEGAL PROVISIONS
Filing of refund application in FORM GST RFD- 01A online on the common portal (only when refund of unutilized ITC is claimed)

 The
corresponding
electronic credit
ledger of CT / ST /
UT / IT/ Cess
would get debited
and an ARN
number would get generated.

Rule 89 Filing of printout of FORMGST RFD-01A

 The printout of the
ARN along
with application of
refund shall be
submitted manually
in the
appropriate
jurisdiction.
 This form needs
to be accompanied
with the
requisite
documentary
evidences. This
Form shall contain debit entry in electronic credit
ledger of the
amount claimed as
refund in FORM
GST RFD-01A.

Rule 89(1) – Application Rule 89(2) – Requisite
Documents Rule 89(3) – Debiting of
electronic credit ledger Initial scrutiny of the Documents by the proper officer

 The proper officer
shall validate the
GSTIN details on portal to validate
whether return in
FORM GSTR-3 FORM GSTR- 3B,
as the case may be, been filed. A
declaration is
required to be
submitted by the
claimant that no
refund has been
claimed against relevant invoices.

in
FORM GSTR-3 FORM GSTR- 3B,
as the case may be, been filed. A
declaration is
required to be
submitted by the
claimant that no
refund has been
claimed against relevant invoices.
Rule 90(2) – 15 day time
for scrutiny Rule 90(3) – Issuance of
Deficiency memo Rule 90(3) – Fresh refund
application requirement Rule 93(1) – re-credit of
refund amount applied for

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 Deficiencies, if any, documentary
evidences are to ascertained a communicated in

FORM GST RFD-03
within 15 days of filing of refund application.
 Deficiency Memo
should be complete
in all respects and
only one
Deficiency Memo
shall be given.
 Submission of
application
after Deficiency
Memo shall be
treated as a
fresh application.
 Resubmission of application,
after rectifying deficiencies pointed
out in the
Deficiency memo,
shall be made by
using the ARN and
debit entry
number
generated originally.
 If the application is filed afresh within
thirty days of communication of deficiency memo, proper officer shall
pass an order in
FORM GST
PMT-03 and re-credit amount claimed as
refund through
FORM GST
RFD-01B.

h within
thirty days of communication of deficiency memo, proper officer shall
pass an order in
FORM GST
PMT-03 and re-credit amount claimed as
refund through
FORM GST
RFD-01B.

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Issue acknowledgement
manually within 15 days in FORM GST RFD-02

 The date of
submission of
application for
which
acknowledgement been given
will be considered
as the date for
ensuring whether refund application been sanctioned
within the stipulated
time period.

Rule 90(2) - Acknowledgement Grant of provisional refund within seven days of issue of acknowledgement

 The amount of
provisional refund
shall be calculated
taking into account total input tax
credit, without
making any reduction credit being
provisionally accepted.  Provisional refund
shall be granted
separately for each
head CT / ST / UT
/ IT/ Cess within 7
days of
acknowledgement FORM GST RFD-04.
 Before sanction of refund a declaration
shall be obtained
that the applicant
has not contravened
rule 91(1).
 Payment advice
to be issued in FORM
GST RFD-05.
 Refund would be
made directly in the
bank account
mentioned in registration.

Rule 91(1) – Requirement of
no prosecution for last 5
years Rule 91(2) – Prima facie
satisfaction, seven day
requirement Rule 91(3) – Payment
advice, electronic credit to
bank account

Rule 91(1) – Requirement of
no prosecution for last 5
years Rule 91(2) – Prima facie
satisfaction, seven day
requirement Rule 91(3) – Payment
advice, electronic credit to
bank account

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Detailed scrutiny of the
refund application along with submitted documents

 The officer shall
validate refund
statement details
with details in
FORM GSTR 1 (or
Table 6A of
FORM GSTR-1)
available on the
common portal.
 The Shipping bill
details shall be
checked by
officer through
ICEGATE
SITE (www.icegate.gov.in) wherein the officer
would be able to
check details of EGM a shipping bill by
keying in port
name, Shipping number and date.
 Further, details of
IGST paid also
needs to be verified
from FORM
GSTR- 3 or
FORM GSTR- 3B,
as the case may be,
filed by the applicant a it needs to be verified
that the refund
amount claimed
shall be less than the tax paid on
account of zero
rated supplies as FORM GSTR-3 FORM GSTR- 3B,
as the case may be.
 Ascertain what
amount may be
sanctioned finally
and see whether a adjustments against a outstanding liability required (FORM
GST RFD-07 –
Part A).
 Ascertain what
amount of the input credit is sanction-able, a Rule 89(4) – Refund Amount Calculation Rule 92(1) – Any adjustments
made in the amount against
existing demands Rule 92(2) – reasons for
withholding of refunds

t credit is sanction-able, a Rule 89(4) – Refund Amount Calculation Rule 92(1) – Any adjustments
made in the amount against
existing demands Rule 92(2) – reasons for
withholding of refunds

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amount of refund, if
any, liable to be
withheld.
 Order needs to be
passed in FORM
GST RFD-07 –
Part B.

If the sanction-able amount is
less than the applied amount

 Notice has to be
issued to the
applicant in FORM
GST RFD-08.
 The applicant has to
reply within 15
days of receipt
of the notice in
FORM GST RFD-09.
 Principles of
natural justice to followed before
making the final
decision.
 Final order to be
made in FORM
GST RFD-06.

Rule 92(3) – Notice for
refund not admissible /
payable Rule 92(3) – Requirement
of reply to the notice
within 15 days Rule 92(3), 92(4), 92(5) –
Sanction of Refund order Pre-Audit

 Pre-audit of the
manually processed
refund applications
is not required to be
carried out,
irrespective of the
amount involved, separate
detailed guidelines issued.
 Post-audit of the
orders may
however continue
on the basis of
extant guidelines.

Final sanction of refund

 The proper officer
shall issue the refund
order manually for
each head i.e. CT /
ST / UT / IT/ Cess.
 Amount paid provisionally needs
Rule 92(3), 92(4), 92(5) – Sanction Refund order Rule 92(4), 92(5) –
Payment advice issue

order manually for
each head i.e. CT /
ST / UT / IT/ Cess.
 Amount paid provisionally needs
Rule 92(3), 92(4), 92(5) – Sanction Refund order Rule 92(4), 92(5) –
Payment advice issue

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to be adjusted
accordingly.
 Payment advice is
to be made in
FORM GST RFD-05.
 The amount of
credit rejected has to
be re-credited to the
credit ledger by an
order in FORM
GST PMT- 03 and
shall be intimated
to the common
portal in FORM
GST RFD- 01B.
 Refund, if any,
will be paid by an
order with payment
advice in FORM
GST RFD-05.
 The details of the
refund along with
taxpayer bank
account details
shall be
manually
submitted PFMS/[States’]
system by jurisdictional
Division’s DDO
and a signed copy
of the sanction order
shall be sent to PAO
office for release payment.

Payment of interest if any

 Amount, if any,
will be paid by an
order with payment
advice in
FORM GST RFD-05

Rule 94

The refund application for various taxes i.e. CT / ST / UT / IT/ Cess can be filed with any one of the tax authorities and shall be processed by the said authority, however the payment of the sanctioned refund amount shall be made only by the respective tax authority of the Centre or State government. In other words, the payment of the sanctioned refund amount in relation to CT / IT / Cess shall be made by the Central tax authority while payment of the sanctioned refund amount in relation to ST / UT would be made by the State tax/Union territory tax authority.

ation to CT / IT / Cess shall be made by the Central tax authority while payment of the sanctioned refund amount in relation to ST / UT would be made by the State tax/Union territory tax authority. It therefore becomes necessary that the refund order issued either by the Central tax authority or the State tax/UT tax

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authority is communicated to the concerned counter-part tax authority within three days for the purpose of payment of the relevant sanctioned refund amount of tax or cess, as the case may be.

Difficulties faced, if any, may be brought to the notice of the undersigned.

Sd/-

(Prachi Saroop) Commissioner of Customs (Export-II)

Copy to:-

1. The Chief Commissioner of Customs, Zone-1.
2. All the Principal Commissioners/Commissioners of Customs, NCH.
3. All the Additional/Joint Commissioners of Customs, NCH.
4. All the Deputy/Assistant Commissioners of Customs, NCH.
5. Notice Board.
6. EDI for uploading on website.