CBIC clarifies issues in respect of challenges faced by registered persons in implementation of provisions of GST issued

Apr 15, 2020 | by Avantis RegTech Legal Research Team


Finance & Taxation Compliance

The Central Board of Indirect Taxes and Customs (CBIC) on April 13, 2020, has clarified the issues in respect of challenges faced by registered persons in implementation of provisions of GST issued.

Circular No.136/06/2020-GST, dated April 03, 2020 had been issued to clarify doubts regarding relief measures taken by the Government for facilitating taxpayers in meeting the compliance requirements under various provisions of the Central Goods and Services Tax Act, 2017 on account of the measures taken to prevent the spread of Novel Corona Virus (COVID-19). It has been brought to the notice of CBIC that certain challenges are being faced by taxpayers in adhering to the compliance requirements under various other provisions of the CGST Act which also need to be clarified.

Therefore, the issues are as under:

1. An advance is received by a supplier for a 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 liability in his returns?

2. An advance is received by a supplier for a Service contract which got cancelled subsequently. The supplier has issued receipt voucher and paid the GST on such advance received. Whether he can claim refund of tax paid on advance or he is required to adjust his tax liability in his returns?

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

4. Letter of Undertaking (LUT) furnished for the purposes of zerorated supplies as per provisions of section 16 of the Integrated Goods and Services Tax Act, 2017 read with rule 96A of the Central Goods and Services Tax Rules, 2017 has expired on March 31, 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?

5. While making the payment to recipient, amount equivalent to one per cent was deducted as per the provisions of section 51 of Central Goods and Services Tax Act, 2017 i. e. Tax Deducted at Source (TDS). Whether the date of deposit of such payment has also been extended vide Notification No. 35/2020-Central Tax dated April 03, 2020?

6. As per section 54 (1), a person is required to make an application before expiry of two years from the relevant date. If in a particular case, date for making an application for refund expires on March 31, 2020, can such person make an application for refund before July 29, 2020?

[Circular No. 137/07/2020-GST]


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