Important clarification by CBIC on refunds related issues

 

Circular No. 166/22/2021-GST dated November 17, 2021 issued by the Central Board of Indirect Taxes (‘CBIC’) providing clarification on certain refund related issues.  Given below the summary of circular with our comments.

S. No.	Issue	Clarification	Comments
1	Whether limitation period of 2 years applicable for filing refund application of excess balance in e-cash ledger?	Limitation period is not applicable	Balance in e-cash ledger is as good as cash for a taxpayer and does not partake form of a ‘tax’
2	Whether declaration/certification of unjust enrichment required in case of refund of excess balance in e-cash ledger?	Not required, as unjust enrichment clause is not applicable in such cases	Balance in e-cash ledger is taxpayer’s own money and hence, no point of unjust enrichment
3	Whether refund of TDS/TCS deposited in e-cash ledger under GST can be refunded as excess balance in cash ledger?	TDS/ TCS credited to e-cash ledger is equivalent to cash deposited in the ledger. Therefore, said amount can be refunded as excess balance in e-cash ledger	Practically, once a taxpayer files a refund application, Department is denying the same on the ground either of difference in GSTR-2A v. GSTR-3B or some other ground which has no relation with the e-cash refund. Realising this especially from TCS/TDS perspective, recently, GST Council has decided to allow taxpayers to transfer such balance from one GSTIN to another. Portal functionality is yet to come.
4	What is the ‘relevant date’ for filing refund claim under Deemed Exports by the recipient?	The date of filing of return (covering the deemed exports supplies) by the supplier	It is, therefore, important for the recipient not to delay in claiming the ITC because the limitation period of 2 years shall start from the date of supplier’s return.