Recent Circular on Challenges (GST)

(Circular No. 137/07/2020-GST dated April 13, 2020)

ISSUES	CLARIFICATION
1. Advance under service contract which subsequently got cancelled
Supplier issued Invoice	• Supplier to issue a credit note under Section 34 and adjust tax liability where invoice was issued before supply of service. • If there is no output liability, apply for refund as excess payment of tax. TBM Comments: This is a benevolent circular since neither does Section 34 explicitly provide for adjustment nor does Section 54(8) provides for refund in such cases. • This is similar to an earlier clarification for credit note vide F. No. 354/32/2019-TRU.
Supplier issued Receipt Voucher	Supplier to issue refund voucher and apply for refund as excess payment of tax.
2. Sales Return after issuance of invoice
	• Supplier to issue credit note under Section 34 and adjust tax liability where goods supplied are returned by recipient. • If there is no output liability, apply for refund as excess payment of tax.
3. Clarification on Notification No. 35/2020-CT issued under Section 168A extending the compliance of various provisions under GST Laws till June 30, 2020
LUT for FY 2020-21	• Time-limit for filing LUT extended till June 30, 2020. • Supplies can be made without payment of tax under LUT, provided that GST RFD-11 of FY 2020-21 is filed by June 30, 2020 • Taxpayers may quote the reference number of LUT for the FY 2019-20
Deposit of TDS	• GSTR-7 along with deposit of TDS falling during the period March 20, 2020 to June 29, 2020 has been extended till June 30, 2020. • No interest under Section 50 shall be leviable if tax deducted is deposited by June 30, 2020. TBM Comments A similar position may be taken for deposit of TCS under Section 52. • Will the interest be applicable from the initial due date or from July 1, 2020 remains to be clarified.
Refund Timelines	Due date for filing an application for refund falling during the period March 20, 2020 to June 29, 2020 has been extended till June 30, 2020.