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| Gist of circulars issued by CBIC on 6 July 2022 |
| Circular No. 170/02/2022-GST |
- For uniformity in reporting outward supplies, taxpayers are required to make additional disclosure of supplies made to unregistered persons, composition taxable persons and Unique Identification Number (UIN) holders in forms GSTR-3B and GSTR-1 in respective tables as provided in the circular.
- Most of the taxpayers have been reporting ITC in GSTR-3B net of reversals, re-claimed Input Tax Credit (ITC) & ineligible ITC. However, going forward, with auto-population of total ITC (eligible and ineligible) from GSTR-2B, taxpayers are required to separately report reversal of ITC, reclaimed ITC and ineligible ITC in GSTR-3B. Furthermore, ITC lapsed on account of limitation period or recipient of intra-state supply being located in different state/UT, other than that of Place of Supply shall also be reported.
Below is a comparative analysis of the reporting requirement:
| Table 4. of GSTR-3B: Eligible ITC |
| Particulars |
IGST/ CGST/ SGST amount |
| Before |
After |
| (A) ITC Available (whether in full or part) |
| 1. ITC on Imports of goods |
1,00,000 |
1,00,000 |
| 2. ITC on Imports of services |
50,000 |
50,000 |
| 3. ITC on Inward Supplies under Reverse Charge Mechanism (RCM) |
75,000 |
75,000 |
| 4. ITC on Inward Supplies from Input Service Distributor (ISD) |
15,000 |
15,000 |
| 5. ITC on other inward supplies |
2,25,000 |
2,90,000 |
| (B) ITC Reversed/ reduced |
| 1. Reversal of ITC as per Rule 42 and 43 of CGST Rules |
- |
50,000 |
| 2. Others |
- |
15,000 |
| (C) Net ITC Available (A)-(B) |
4,65,000 |
4,65,000 |
| (D) Ineligible ITC |
| 1. As per Section 17(5) |
50,000 |
- |
| 2. Others |
10,000 |
10,000 |
| Circular No. 171/03/2022-GST |
| Sr. no. |
Nature of transaction |
Supplier |
Recipient |
| 1. |
The supplier issued an invoice without underlying goods/services and the Recipient availed ITC and also utilized towards the discharge of his output liability. |
Since there is no underlying supply, GST liability does not arise. However, a penalty under Section 122 shall be imposed for issuing tax invoices without an actual supply of goods/services. |
Fraudulent availment and utilization of ITC is liable to demand, recovery and penal action under Section 74 along with applicable Interest under Section 50. However, a penalty under Section 122 shall not be imposed. |
| 2. |
Supplier issued an invoice without underlying goods/services and the Recipient availed credit and further passed on ITC by issuing an invoice without actual supply of goods/services and utilized the ITC for discharging his output liability. |
Since there is no underlying supply, GST liability does not arise. However, a penalty under Section 122 shall be imposed for issuing tax invoice without an actual supply of goods/services. |
Since there is no underlying supply, GST liability shall not arise. However, a penalty under Section 122 shall be imposed for issuing invoice without actual supply of goods/services and also for availing/utilizing ITC without actual receipt of goods/services. |
Note: Actual action to be taken against a person will depend upon the specific facts and circumstances of the case, which may involve a complex mixture of the above scenarios or even may not be covered by any of the above scenarios.
| Circular No. 172/04/2022-GST |
| Issue |
Clarification |
| Refund claimed by the Recipient of supplies regarded as deemed export |
| Whether the ITC availed by the Recipient of deemed export supply for claiming refund of tax paid on supplies regarded as deemed exports would be subjected to provisions of Section 17 of the CGST Act, 2017? |
Recipients of deemed exports were facing the practical challenge of not being able to debit refund an amount from their Electronic Credit Ledger (ECL) while filing refund application.
Circular 147/03/2021-GST dated 12 March 2021 allowed such recipients to avail ITC to remove the practical difficulty.
This circular clarifies that even though such an amount is credited to ECL, it would not be subjected to provisions of Section 17. |
| Whether the ITC availed by the Recipient of deemed export supply for claiming refund of tax paid on supplies regarded as deemed exports is to be included in the “Net ITC” for computation of refund of unutilized ITC under Rule 89(4) and rule 89 (5) of the CGST Rules, 2017. |
No, it would not form part of ‘Net ITC’ for computation of refund of unutilized ITC on account of zero-rated supplies or on account of Inverted Duty Structure. |
| Issues of Section 17(5) of the CGST Act |
| Whether the proviso at the end of clause (b) of sub-section (5) of Section 17 of the CGST Act is applicable to the entire clause (b) or the said proviso is applicable only to sub-clause (iii) of clause (b)? |
Yes, the proviso is applicable to the whole of clause (b) of sub-section (5) of section 17 and it is not restricted to sub-clause (iii) of clause 17(5)(b). |
| Whether the provisions of sub-clause (i) of clause (b) of sub-section (5) of section 17 of the CGST Act bar availment of ITC on input services by way of “leasing of motor vehicles, vessels or aircraft” or ITC on input services by way of any type of leasing is barred under the said provisions? |
Only ITC of GST charged on leasing of motor vehicles, vessels and aircraft are restricted under clause (b) of Section 17(5) of the CGST Act, 2017. |
| Perquisites provided by the employer to the employees as per contractual agreement |
| Whether various perquisites provided by the employer to its employees in terms of the contractual agreement entered into between the employer and the employee are liable for GST? |
Perquisites provided by the employer to the employee in terms of the contractual agreement entered into between the employer and the employee will not be subjected to GST. |
| Utilization of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities |
| Whether the amount available in the electronic credit ledger can be used for making payment of any tax under the GST Laws? |
Balance in ECL can be utilized for making payment of self-assessed output tax liability (except reverse charge) or as a consequence of any proceedings instituted under the GST Law, subject to order of utilization of the ITC specified in Section 49B of the Act read with Rule 88A of CGST Rules, 2017. |
| Whether the amount available in the electronic credit ledger can be used for making payment of any liability other than tax under the GST Laws? |
No, the balance in the ECL cannot be used for making payment of interest, penalty, late fees or any other amount under the GST Law.
Similarly, it also cannot be used for making payment of erroneous refund sanctioned where such refund was sanctioned in cash. |
| Whether the amount available in the electronic cash ledger can be used for making payment of any liability under the GST Laws? |
Yes, it can be used for making payments of any liabilities under the GST Laws. |
| Circular No. 173/05/2022-GST |
Refund of accumulated ITC is allowed in cases where the accumulation of ITC is on account of the rate of tax on outward supply being less than the rate of tax on inputs. However, the refund under the inverted duty structure gets restricted if inputs and output goods are the same but attract different tax rates at different points in time as clarified through para 3.2 of circular no. 135/05/2020-GST dated 31 March 2020.
However, CBIC vide this Circular has substituted the relevant para 3.2 of the aforesaid circular and added para 3.3 to provide that where inputs and output goods are the same, but the output goods are supplied under a concessional notification due to which the rate of tax on output supplies is less than the rate of tax on inputs, in such case the credit accumulated on account of such inversion in rates shall be eligible for a refund under inverted duty structure.
| Circular No. 174/06/2022-GST |
Procedure for Re-Credit of erroneously sanctioned refund and paid by the taxpayer through DRC-03
The taxpayer shall deposit the amount of erroneous refund sanctioned through DRC-03 by debiting ECL.
Till auto-mated functionality is developed, the taxpayer is required to make a physical application to the jurisdictional officer for recredit an amount equivalent to a refund paid through DRC-03 to ECL in Specified Format mentioned in Annexure A (of the Circular). On being satisfied with the correctness of the payment made, an officer will pass an order in Form PMT-03A, preferably within 30 days from the date of receipt of the request for recredit.
| Circular No. 175/07/2022-GST |
| Particular |
Clarification |
| Application |
It should be filed under “Any other” Category under Form RFD-01
No requirement to make a debit from ECL. |
| Documents uploaded |
- Furnish details contained in Statement 3B of Form RFD-01
- Copy of statement of scheduled energy for electricity exported by the Generation Plants (Format attached as Annexure I to this circular)
- Copy of relevant agreement detailing tariff per unit for electricity exported
- Calculation of refund as per Statement 3A in PDF format
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| Relevant date of filing Application |
Within two years from the last date of the month, in which the electricity has been exported as per the monthly Regional Energy Account (REA) issued by the Regional Power Committee(RPC) |
| Formula for Refund |
Rule 89(4) to be adopted. (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷Adjusted Total Turnover |
| Turnover |
Turnover: (Energy exported during the period of refund) x (Tariff per unit of electricity, specified in the agreement). *Quantum of Scheduled Energy exported as reported in REA will be deemed to be the quantity exported and will be used to compute the value of zero-rated supply. In case of quantum of electricity as per invoice is different from the quantum of electricity exported mentioned on the statement of scheduled energy uploaded with REA then lower of either of the above will be considered. Turnover of electricity supplied domestically shall be excluded for calculation of adjusted Turnover. |
| Processing of claim |
Once the officer is satisfied with the refund application, he shall request the taxpayer to a debit equivalent amount from ECL through DRC-03 and then proceed to issue the refund. |
| Circular No. 176/08/2022-GST |
Pursuant to the omission of Rule 95A retrospectively w.e.f. 1 July 2019, which provided for refund of tax paid on inward supplies of indigenous goods by retail outlets at international airports, beyond immigration counters to outgoing foreign passengers against foreign exchange, Circular no. 106/25/2019-GST dated 29 June 2019 has been withdrawn ab-initio. |
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