GST Refund Archives | XaTTaX GST Blog

Govt blocks fraudulent GST refund claims worth Rs 1,875 crore

July 21, 2020 admin Comments 0 Comment

The government has blocked fraudulent Goods and Services Tax (GST) refund claims worth Rs 1,875 crore involving 1,377 exporters after their addresses could not be traced, a Union finance ministry official said.

“This number of risky exporters, also, includes seven exporters accredited as star exporters,” the official said requesting anonymity.

The government rates export houses on the basis of their performance and accord them one to five stars.

The Central Board of Indirect Taxes and Customs (CBIC) has instructed its officials to verify the correct refund of input tax credit (ITC) by such risky exporters on the basis of pre-defined risk parameters, he added.

According to the official, while CBIC is focusing on quick disbursal of pending refunds to exporters, it also uses data analytics to identify “risky” exporter entities that take input tax credit fraudulently and monetise it by paying Integrated Goods and Services Tax (IGST) and claiming a refund on that.

Imports of goods and services are treated as inter-state supplies and attract IGST.

“The verification exercise is aimed at preventing unscrupulous exporters from defrauding the state exchequer and bringing a bad name to the exporting community at large,” he said.

CBIC has, however, assured all genuine exporters that they would continue to get their refunds in a timely manner in a fully automated environment, he said.

The official said a total of 7,516 exporters figure in the risky exporters’ list to date. “IGST refund worth Rs 1,363 crore is suspended in respect of 2,830 risky exporters. Adverse reports have been received in respect of 2,197 risky exporters,” he added.

Source: Hindustan-Times.

Exporters facing GST refund issues as govt makes invoice matching compulsory for input tax credit

July 15, 2020 admin Comments 0 Comment

Many exporters are facing a working capital crunch as they have run into refund problems after a recent government circular said exporters would not be eligible for input tax credit refunds in cases where they are unable to match invoices from the vendors.

This situation is a result of the government waiving off late fees for companies and suppliers to upload certain forms under the goods and service tax, tax experts said.

That led to several cases where these forms were not uploaded, and exporters were unable to take input tax credit running into crores.

As per the GST framework, tax credit cannot be availed until and unless a corresponding invoice is reflected on the government portal.

Now, exporters are having to deal with queries from tax officials while seeking refunds.

“This has been a matter of concern for exporters, especially given their experience of field officers insisting on compliance of all circulars before issuance of any refunds,” said Abhishek Jain, tax partner .

“For speedy processing of these refunds, the government should consider extending a relaxation on the matching of credits or an option of provisional refunds for the interim period to mitigate working capital concerns for the exporters,” he said.

The government circular specifically mentioned that input tax credit refunds should not be granted on invoices that are not reflected in GSTR-2A—a form that reflects outward supply invoices uploaded by suppliers.

Now, GSTR 2A is auto-created information based on GSTR 1—a monthly statement of outward supplies of goods or services filed by a company.

The government has waived late fee for filing forms such as GSTR-1 due to Covid-19 situation. While this was a step in the right direction, due to this the corresponding invoices—which exporters submit to claim refunds—are not reflected in GSTR-2A, experts said.

Hence, exporters are unable to avail tax credits, they said.

Source: Economic-Times.

CBIC clears Rs 11,052 cr GST refund claims since April 8

May 28, 2020 admin Comments 0 Comment

The Central Board of Indirect Taxes ( CBIC) on Monday said it has sanctioned GST refund claims worth Rs 11,052 crore in 47 days.

In a tweet, the CBIC said it is “committed to ensuring liquidity to GST taxpayers especially MSME sectors during the lockdown”.

The tweet added that 29,230 refund claims amounting to Rs 11,052 crore disposed of between April 8-May 24, the CBIC added.

Refunds have been sanctioned while ensuring work from home, it added. The finance ministry had on April 8 said that to provide relief during COVID-19 it has been decided to issue all pending GST and custom refunds which would benefit around 1 lakh business entities, including MSME.

The total refund granted will be approximately Rs 18,000 crore, it had said.

The CBIC had earlier asked its field officers to avoid asking for physical submission of documents from entities who are claiming GST and Customs refunds and instead use official email for all communication.

The CBIC had said that the decision to process pending refund claims has been taken with a view to provide immediate relief to the taxpayers in these difficult times even though the GST Law provides 15 days for issuing acknowledgement or deficiency memo and total 60 days for disposing off refund claims without any liability to pay interest.

Source: Economic-Times

I-T dept, GSTN, CBIC caution people against phishing emails promising refunds

May 4, 2020 admin Comments 0 Comment

The two apex tax bodies – income tax department and CBIC – on Sunday asked taxpayers to beware of phishing emails promising refund.

Separately GST Network, the company handling the technology backbone for Goods and Services Tax, cautioned against a fraud website onlinefilingindia.in asking taxpayers not to reveal personal and bank details.

“BEWARE of FRAUD website onlinefilingindia.in. It is trying to BAIT taxpayers to reveal personal and bank details. DO NOT respond to messages, mails and lookalike websites which ask for your personal details,” GSTN tweeted.

It further said that some fraudulent messages are being circulated on WhatsApp, Email and SMS claiming to process refund.

“Miscreants are attempting to take undue advantage of COVID-19 crisis by sending out fake messages with phishing links. One such link takes to a portal claimed to have been developed by GSTN. the same is fake,” GSTN tweeted.

Fraudsters may also pose as tax officials or GSTN personnel and send fake email asking to urgently verify or update account. Taxpayers are advised to remain cautious against such messages, it added.

GSTN also issued a list of Do’s and Don’ts and asked taxpayers to call GST help desk 1800-103-4786 in case of any query.

Earlier in the day, the tax department had tweeted: “Taxpayers Beware! Please do not click on any fake link which promises to give refund. These are phishing messages and are not sent by the Income Tax Department”.

Similarly, the Central Board of Indirect Taxes and Customs (CBIC) in a late evening tweet asked taxpayers not to click on any fake link which promises to give refund.

“These are phishing messages and are not sent by CBIC or @Infosys_GSTN. Visit gst.gov.in for online filings related to GST,” the CBIC tweeted.

The Finance Ministry had on April 8 said it will fast track issuance of pending income tax refunds up to Rs 5 lakh which will benefit around 14 lakh taxpayers, to provide relief to individuals and businesses hit by COVID-19 outbreak.

As per latest data, between April 8-20, the department had issued nearly 14 lakh refunds involving an amount of over Rs 9,000 crore to various taxpayers — including individuals, HUFs, proprietors, firms, corporate, start-ups, MSMEs.

The CBIC too had cleared over Rs 10,700 crore worth refunds in GST and Customs duty between April 8-23.

The ministry has decided to issue all pending GST and Custom refunds which would benefit around 1 lakh business entities, including MSME. The total refund granted will be approximately Rs 18,000 crore, it had said. JD BAL BAL

Source: Economic-Times

CBIC clears Rs 10,700 cr GST, customs duty refund in 16 days

April 29, 2020 admin Comments 0 Comment

The Central Board of Indirect Taxes (CBIC) has cleared over Rs 10,700 crore worth refunds in GST and customs duty between April 8-23.

In the ‘Special Refund and Drawback Disposal Drive’, the CBIC officers have cleared over 1.07 lakh Goods and Services Tax and IGST refund claims worth Rs 9,818.12 crore.

Over 1.86 lakh customs and duty drawback refund was processed totalling Rs 915.56 crore, the CBIC said in a tweet.

“CBIC is committed to help GST Taxpayers/Exim Trade during #COVID19. Expeditious sanction of refunds during Special Refund Drive provide relief to trade, especially MSMEs,” it said.

The Finance Ministry had on April 8 said that to provide relief during COVID-19, it has been decided to issue all pending GST and custom refunds which would benefit around 1 lakh business entities, including MSME.

The total refund granted will be approximately Rs 18,000 crore, it had said.

The CBIC had earlier asked its field officers to avoid asking for physical submission of documents from entities who are claiming GST and customs refunds and instead use official email for all communication.

The CBIC had said that the decision to process pending refund claims has been taken with a view to provide immediate relief to taxpayers in these difficult times even though the GST Law provides 15 days for issuing acknowledgement or deficiency memo and total 60 days for disposing off refund claims without any liability to pay interest.

Source: Economic-Times

CBIC processes 12923 GST Refund applications involving claims worth Rs 5575 Cr amid Lockdown

April 20, 2020 admin Comments 0 Comment

CBIC said that it is fully committed to helping the GST taxpayers in the present COVID-19 situation. Since 30th March 2020, CBIC has processed 12923 refund applications involving claims worth Rs. 5575 Cr. While in the last week itself, CBIC has processed 7873 claims worth.. 3854 Cr. CBIC said that a trade and business-friendly measure taken by CBIC .de its Circular No. 133 da.d 31.03.2020. help GST returns filers to facilitate early ITC refunds and to ensure that the wrong ITC claims are not processed in the absence of relevant information, is misconstrued in certain sections of social media and other media as troubling the taxpayers in COVID -19 like situation.

CBIC said that this measure was taken into effect with GST Council’s approval in its 39th Meeting held on 14.03.2020. mitigate delays in I’M refunds faced by the taxpayers besides ensuring that wrong ITC claims are not processed. It had been brought to the notice of GSTC by various stakeholders including the taxpayers. It was noticed that lot of time is spent in the verification of whether the credit was availed on services and Capital Goods in certain categories for the refund claims.

CBIC said that in order. address the difficulty faced by trade in providing this data at the time of processing of claim leading to delays and an increase in compliance cost, it was decided in the GST Council. make declaration of classification codes a part of the application itself. The GST Council in the same meeting has also decided. allow bunching of periods across financial years. facilitate claim of refund by exporters. This would apply to applications filed after 31.03.2020. It may also be noted that the due date of all such applications which were due during 20th March 2020 and 29th June 2020 has been extended to 30.06.2020.

CBIC explained that the Circular No. 133 (da.d 31.03.2020) is with regard to the requirement to give HSN/SAC code along Rith the refund application. The GST Law doesn’t allow refund of credit availed on service,s and/or Capital Goods in certain categories. For example, Capital Goods ITC refund is not permissible for re.. of ITC on account of exports and other zero-rated supplies. Further, ITC availed on services and capital goods are not allowed to be refunded in the Inverted Structure Refimd category.

Source: Taxscan

Government To Refund GST To Businesses For Order Cancellations Due To COVID-19

April 15, 2020 admin Comments 0 Comment

The government will give refunds to businesses for goods and services tax paid on orders that were cancelled by customers due to the national lockdown imposed to control the novel coronavirus outbreak, according to a order.

This will help businesses that will have to return entire payments made to them, including tax. For instance, if a customer made a hotel booking of Rs 10,000 + 18 percent tax, and cancels it due to the lockdown, the hotel will have to return the entire Rs 11,800 (Rs 10,000+1,800), even if the business has deposited GST with the government.

Currently, businesses used to adjust the excess GST paid with other new bookings, but now they will be eligible for a refund, which will be a big relief, said Rajat Mohan, a partner .

Some of the industries that were the most impacted due to Covid-19 and stand to benefit are hospitality and tourism, sports, entertainment, media, advertising and aviation, according to Mohan.

Getting full refund for businesses on cancellation of services contract or return of goods would improve their liquidity position, Mohan told BloombergQuint.

Source: Bloomberg-Quint

CBIC issues clarification on GST Refund Issues

April 14, 2020 admin Comments 0 Comment

The Board pointed out that certain challenges are being faced by taxpayers in adhering to the compliance requirements under various other provisions of the Central Goods and Service Tax (CGST) Act which also need to be clarified.

The board to ensure uniformity in the implementation of the provisions of the law across the field formations, addressed all the issues raised by the people.

The board empowered under Section 168(1) of the Central Goods and Service Tax (CGST) Act clarified that in case of GST is paid by the supplier on advances received for a future event which got cancelled subsequently and for which invoice is issued before the supply of service, the supplier is required to issue a “credit note” in terms of section 34 of the CGST Act. He shall declare the details of such credit notes in the return for the month during which such credit note has been issued. The tax liability shall be adjusted in the return subject to conditions of section 34 of the CGST Act. There is no need to file a separate refund claim.

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” through FORM GST RFD-01.

In case GST is paid by the supplier on advances received for an event which got cancelled subsequently and for which no invoice has been issued in terms of section 31 (2) of the CGST Act, he is required to issue a “refund voucher” in terms of section 31 (3) (e) of the CGST Act read with rule 51 of the CGST Rules.

The taxpayer can apply for a refund of GST paid on such advances by filing FORM GST RFD-01 under the category “Refund of excess payment of tax”.

In such a case where the goods supplied by a supplier are returned by the recipient and where the tax invoice had been issued, the supplier is required to issue a “credit note” in terms of section 34 of the CGST Act. He shall declare the details of such credit notes in the return for the month during which such credit note has been issued. The tax liability shall be adjusted in the return subject to conditions of section 34 of the CGST Act. There is no need to file a separate refund claim in such a case.

Notification No. 37/2017-Central Tax, dated 04.10.2017, requires LUT to be furnished for a financial year. However, in terms of notification No. 35/2020 Central Tax dated 03.04.2020, where the requirement under the GST Law for furnishing of any report, document, return, statement or such other record falls during between the period from 20.03.2020 to 29.06.2020, has been extended till 30.06.2020.

Therefore, in terms of Notification No. 35/2020-Central Tax, the 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 without payment of tax under LUT provided that the FORM GST RFD-11 for 2020-21 is furnished on or before 30.06.2020. Taxpayers may quote the reference no of the LUT for the year 2019-20 in the relevant documents.

As per notification No. 35/2020-Central Tax dated 03.04.2020, where the timeline for any compliance required as per sub-section (3) of section 39 and section 51 of the Central Goods and Services Tax Act, 2017 falls during the period from 20.03.2020 to 29.06.2020, the same has been extended till 30.06.2020. Accordingly, the due date for furnishing of return in FORM GSTR-7 along with deposit of tax deducted for the said period has also been extended till 30.06.2020 and no interest under section 50 shall be leviable if tax deducted is deposited by 30.06.2020.

“Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the Board,” the circular said.

Read More, Here: http://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular_Refund_137_7_2020.pdf

Source: TaxScan.

Centre Still Owes States Over Rs 30,000 Crore In GST Dues For FY20

April 13, 2020 admin Comments 0 Comment

The central government still owes about Rs 30,000-34,000 crore to states as Goods and Services Tax compensation for December 2019 and January 2020, even as state governments find themselves at the forefront of the fight against the coronavirus and struggle with their finances.

The compensation for December-January had to be paid by second week of February, but has been delayed due to inadequate money in the compensation cess fund as a result of the economic slowdown, said a government official, on the condition of anonymity.

The December-January payout will happen in phases and the central government is coordinating with states and asking them to be patient for the compensation payout, said the same government official.

The cess fund is the corpus gathered from the levies put on sin and demerit goods. As the introduction of GST in 2017 prevented states from levying indirect taxes on most goods and services, the central government had promised to compensate states by paying them the lost revenue, for five years starting 2017-18. This compensation is given bi-monthly assuming a 14 percent increase in their revenue keeping 2015-16 as the base year.

On Tuesday, the government released Rs 14,103 crore to states as the second tranche of compensation for October-November. The government had paid Rs 19,950 crore to states in Feb for Oct-Nov too taking the total for the month to Rs 34,013 crore.

Another disbursement of nearly the same amount will have to be paid to the states for February and March, which is due in April, and booked in FY21 accounts.

‘Help States More’

Punjab is owed about Rs 4,000 crore for December to March, and the state’s Finance Minister Manpreet Singh Badal said this should be released at the earliest. With the countrywide lockdown, the GST collections are expected to dip substantially, leading to more trouble for the states, Badal told BloombergQuint. The GST compensation is states’ right, and the centre should step in to help the states, he said.
Other states have also made similar requests.

D Jayakumar, Tamil Nadu’s Minister for Fisheries and Personnel and Administrative Reforms, and the state’s representative to GST Council said the centre needs to clear GST dues as early as possible so that the funds can be utilised to provide relief to people. Jayakumar said the centre also owed Tamil Nadu around Rs 2,400 crore as its IGST share for FY19 and FY20. A group of ministers had been constituted by the GST Council to look into the issue.

Chhattisgarh’s Minister for Commercial Tax TS Singh Deo told BloombergQuint that his state is owed Rs 1,551 crore by the centre for December-March, money that states now needed to use for coronavirus-related relief measures. Derek O’ Brien, a Member of Parliament representing the ruling All India Trinamool Congress party in West Bengal, tweeted that the state is owed Rs 2,393 crore in GST compensation from December 2019 to March 2020. Devolution of central taxes to West Bengal worth Rs 11,230 crore is also due, he tweeted.

Separately, many states have also requested the centre to increase their borrowing limit from the current cap of 3 percent of the GDP.
Just raising the limit will not entirely help states as the borrowing costs are high, Badal added. States’ borrowing costs spiked on Tuesday, the first bond auction of the current financial year. The highest borrowing rate of 8.96 percent was paid by Kerala which raised Rs 1,930 crore for a 15-year duration.

Due to the 21 day countrywide lockdown, states also will bear a significant hit on taxes that otherwise be collected from sale of alcohol and fuel. “I understand the situation of the centre, but we’re at war, and these call for unusual measures,” Badal said.

Lacking funds in the compensation pool to direct to states, the centre is looking at various ways through which it can release money in a timely manner. Due to the economic slowdown with the spread of the coronavirus, the option of raising the compensation cess on sin and demerit goods will have to be carefully thought through, the official quoted above said.

Rs 1.34 lakh crore had been paid out to states as of November, even as the compensation cess collections lagged, at Rs 96,127 crore. Excess cess collected in FY18 and FY19 of about Rs 47,271 crore has also been used to compensate states.

At the conclusion of the last GST Council meeting in March, Finance Minsiter Nirmala Sitharaman had said there was a discussion to borrow from the market to adequately compensate states for any losses they incurred.

The government official said a clear picture would emerge after April 25, once GST collections for March 2020 are known.

Source: Bloomberg-Quint.

Government to release all GST, customs refund worth Rs 18k crore

April 9, 2020 admin Comments 0 Comment

In a bid to provide relief to businesses hit by the Covis-19 pandemic, the Government on Wednesday said it will release all GST & Customs refunds to provide benefit to around 1 lakh business entities including MSMEs

“It has been decided to issue all pending GST and Custom refunds which would provide benefit to around 1 lakh business entities, including MSME. Thus, the total refund granted will be approximately Rs. 18,000 crore,” said a statement.

The Government also said it would provide immediate relief to the business entities and individuals by releasing all the pending income-tax refunds up to Rs. 5 lakh, immediately. This would benefit around 14 lakh taxpayers.

“Speedy online IT, GST and Customs refunds without human intervention, even upto Rs 5 lakh, should assuage the situation of MSMEs, who would be under extreme cash crunch,” said Harpreet Singh, Partner.

To provide relief to businesses grappling with the economic impact of Covid 19, the Government on March 24 had extended the filing of Return for the month of March, April and May 2020 and composition returns under GST June 30. The Finance Minister also said companies which have less than Rs 5 crore turnover will not have to pay interest, late fee or penalty. For bigger companies late fee and penalty will not apply and only interest at a reduced rate of 9% will be charged.

However, taxpayers have been demanding more and a significant wish was the refund of stuck GST. “As a next step Government could look at, expediting issuance of benefits under Foreign Trade Policy i.e. Service Exports India Scheme (SEIS) and duty drawbacks. This could provide relief to lot of small service and goods exporters,” adds Singh.

According to MS Mani, Partner, India, “In a situation where businesses are making plans of dealing with cash crunch situations on resumption of operations, enabling GST refunds on a war footing would be assist businesses and energise them. Businesses which have borne the brunt of the lockdown would be greatly enthused at the prospect of getting GST refunds enabling quicker resumption of operations.”

Source: Economic-Times.

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Govt blocks fraudulent GST refund claims worth Rs 1,875 crore

July 21, 2020 admin Comments 0 Comment

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

Exporters facing GST refund issues as govt makes invoice matching compulsory for input tax credit

July 15, 2020 admin Comments 0 Comment

CBIC clears Rs 11,052 cr GST refund claims since April 8

May 28, 2020 admin Comments 0 Comment

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

I-T dept, GSTN, CBIC caution people against phishing emails promising refunds

May 4, 2020 admin Comments 0 Comment

CBIC clears Rs 10,700 cr GST, customs duty refund in 16 days

April 29, 2020 admin Comments 0 Comment

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

CBIC processes 12923 GST Refund applications involving claims worth Rs 5575 Cr amid Lockdown

April 20, 2020 admin Comments 0 Comment

Government To Refund GST To Businesses For Order Cancellations Due To COVID-19

April 15, 2020 admin Comments 0 Comment

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

CBIC issues clarification on GST Refund Issues

April 14, 2020 admin Comments 0 Comment

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

Centre Still Owes States Over Rs 30,000 Crore In GST Dues For FY20

April 13, 2020 admin Comments 0 Comment

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

Government to release all GST, customs refund worth Rs 18k crore

April 9, 2020 admin Comments 0 Comment

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.