Key Highlights of Circular No. 227/21/2024-GST

2025-03-04 06:36:51 02March

02March

Key Highlights of Circular No. 227/21/2024-GST

<a href="https://cms.plasament.com/storage/nisha/circular-no-227-2024.pdf">circular-no-227-2024</a> The Government of India, through Circular No. 227/21/2024-GST, issued on July 11, 2024, introduces a new mechanism for the electronic filing and processing of refund claims by the Canteen Stores Department (CSD). This update ensures a streamlined and digital approach for CSD refunds, replacing the previous manual filing system.<hr><h3>1. Background of the Issue</h3><ul><li>The Canteen Stores Department (CSD), under the Ministry of Defence, supplies goods to Unit Run Canteens (URCs) and authorized customers.</li><li>CSD is eligible for a refund of 50% of the applicable GST paid on inward supplies as per Notification No. 06/2017-Central Tax (Rate) and related notifications.</li><li>Earlier, refund claims were filed manually, causing delays and inefficiencies.</li><li>Now, an online refund filing mechanism is introduced, supported by the insertion of Rule 95B and FORM GST RFD-10A via Notification No. 12/2024-CT.</li></ul><hr><h3>2. Filing of Refund Application</h3>✅ CSD must file refund claims electronically in FORM GST RFD-10A on the GST portal. ✅ Refund is applicable only for inward supplies of goods used for resale to URCs or authorized customers. ✅ Refund is available only if:<ul><li>The goods were purchased from a registered GST supplier.</li><li>The supplier has filed GSTR-1 and GSTR-3B, reporting the supplies correctly. ✅ CSD must submit:</li><li>Undertaking confirming the goods were received for resale.</li><li>Declaration confirming no previous refund was claimed for the same invoices.</li></ul><hr><h3>3. Time Limit for Filing Refund</h3><ul><li>As per Section 54(2) of the CGST Act, CSD must file refund claims within two years from the end of the quarter in which goods were received.</li></ul><hr><h3>4. Processing and Verification of Refund</h3>✅ GST officers will verify:<ul><li>Whether CSD has filed all required GST returns (GSTR-1, GSTR-3B, GSTR-2B).</li><li>Whether the suppliers have reported the transactions correctly.</li><li>Whether refund claims do not exceed 50% of GST paid. ✅ System Validation:</li><li>Invoices will be auto-validated against GSTR-2B.</li><li>Duplicate claims will be flagged and rejected. ✅ Refund amounts will be auto-calculated, with only downward adjustments allowed.</li></ul><hr><h3>5. Transition from Manual to Electronic Filing</h3><ul><li>All new refund applications must be filed online.</li><li>Manual applications filed before this circular will continue to be processed manually as per Circular No. 60/34/2018-GST.</li></ul><hr><h3>6. Implications for CSD and GST Compliance</h3>✅ Eliminates manual paperwork, speeding up refund processing. ✅ Ensures accuracy by cross-verifying invoices and supplier returns. ✅ Prevents duplicate refunds through system validation. ✅ CSD must ensure timely refund applications within the 2-year deadline.