Streamlining Refund Claims for Zero-Rated Supplies: Circular No. 17/17/2017-GST

2025-03-03 08:58:12 02March

02March

Streamlining Refund Claims for Zero-Rated Supplies: Circular No. 17/17/2017-GST

In the fast-evolving landscape of the Goods and Services Tax (GST) regime in India, businesses must stay informed about the latest directives and procedures. Circular No. 17/17/2017-GST, issued by the Ministry of Finance, addresses the manual filing and processing of refund claims for zero-rated supplies. Here's a summary of the key highlights from this circular:1. Manual Filing and Processing Due to the unavailability of the refund module on the common portal, the competent authority has decided that applications and documents for refund claims related to zero-rated supplies will be filed and processed manually until further notice.2. Conditions for Zero-Rated Supplies<ul><li>Section 16 of the IGST Act and Section 54 of the CGST Act: Registered persons can make zero-rated supplies (exports) either by paying integrated tax and claiming a refund or without paying integrated tax and claiming a refund of unutilized input tax credit (ITC).</li></ul>3. Refund of Integrated Tax on Exported Goods<ul><li>Rule 96 of the CGST Rules: The shipping bill filed by an exporter is deemed an application for a refund. It is only considered filed once the export manifest or export report is filed, and the applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR-3B.</li></ul>4. Application for Refund<ul><li>FORM GST RFD-01A: The application for the refund of integrated tax paid on zero-rated supply of goods/services to SEZ developers/units or the refund of unutilized ITC on inputs/services must be filed on the common portal and submitted in print before the jurisdictional proper officer with all necessary documentary evidence.</li></ul>5. Jurisdictional Authority and Application Completeness<ul><li>Refund claims must be filed with the jurisdictional tax authority. In states without an administrative order, the taxpayer can apply to either the Central Tax Authority or the State Tax Authority, provided an undertaking is submitted stating the claim is made to only one authority.</li></ul>6. Communication and Documentation<ul><li>All communication regarding forms such as GST RFD-02 (acknowledgment), GST RFD-03 (deficiency memo), and GST RFD-05 (payment advice) will be done manually until the module is operational on the common portal.</li></ul>7. Provisional and Final Refund Processing<ul><li>Provisional Refund: Granted within seven days of acknowledgment in FORM GST RFD-04.</li><li>Final Refund: Processed and the order issued within sixty days of receiving a complete application form. Details are recorded in a refund register.</li></ul>8. Re-credit of Rejected Amounts<ul><li>If a refund claim is rejected, the debited amount is re-credited to the electronic credit ledger via an order in FORM GST PMT-03, following the provisions of rule 93 of the CGST Rules.</li></ul>9. Filing and Processing Steps<ul><li>The circular outlines detailed steps for filing and processing refund claims, including the issuance of deficiency memos, provisional refund orders, payment advice, and final refund orders. These processes are meticulously recorded in refund registers.</li></ul>10. Cross-Authority Communication<ul><li>Refund orders must be communicated to the counterpart tax authority within three days to ensure the timely payment of the sanctioned refund amount by the respective tax authorities.</li></ul>Circular No. 17/17/2017-GST serves as an essential guide for businesses seeking refunds on zero-rated supplies. By adhering to these guidelines, businesses can ensure smooth processing and avoid discrepancies in their refund claims. <a href="https://cms.plasament.com/storage/circular-20no-2017-gst.pdf">circular_20no._2017-gst</a>