The Central Board of Indirect Taxes and Customs (CBIC) has notified the mechanism for filing of refund claims by taxpayers registered in erstwhile Union Territory of Daman & Diu for a period prior to the merger with Dadra & Nagar Haveli.
“Representations have now been received from the field formations and trade/industry that due to transfer of ITC from old GSTIN to new GSTIN, the taxpayers are unable to apply for a refund on account of zero-rated supplies and inverted rated structure for the period prior to the merger in respect of old GSTIN as they have no ITC available in the electronic credit ledger of the old GSTIN for debiting the amount from electronic credit ledger for claiming refund of unutilized ITC. Such taxpayers are also unable to apply for such refund claims from the new GSTIN because all the invoices bear the old GSTIN and the system has certain validations which do not allow the refund application to be filed from the new GSTIN for the period prior to the merger,” the circular read.
The matter has been examined and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in the exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017, prescribed the procedure in respect of the taxpayers, registered in the erstwhile UT of Daman & Diu and who are unable to file a refund claim, due to merger of UT of Dadra & Nagar Haveli and UT of Daman & Diu, to enable such taxpayers to file a refund claim for the period prior to the merger.
The application for refund shall be filed under the ‘Any other’ category on the GST portal using their new GSTIN. In the Remarks column of the application, the applicant needs to enter the category in which the refund application otherwise would have been filed. For example, if the applicant wants to claim a refund of unutilised ITC on account of export of goods/services, in the remarks column, he shall enter ‘Refund of unutilised ITC on account of export of goods/services without payment of tax for the period prior to the merger of Daman & Diu with Dadra & Nagar Haveli’. The application shall be accompanied by all the supporting documents which otherwise are required to be submitted with the refund claim.
At this stage, the applicant is not required to make any debit from the electronic credit ledger.
On receipt of the claim, the proper officer shall calculate the admissible refund amount as per law. Further, upon scrutiny of the application for completeness and eligibility, if the proper officer is satisfied that the whole or any part of the amount claimed is payable as the refund, he shall request the applicant, in writing, if required, to debit the said amount from the electronic credit ledger through FORM GST DRC-03. Once the proof of such debit is received by the proper officer, he shall proceed to issue the refund order in FORM GST RFD-06 and the payment order in FORM GST RFD-05.
For the categories of refund where debit of ITC is not required, the applicant may apply for a refund under the category “Any other” mentioning the reasons in the Remarks column. Such application shall also be accompanied by all the supporting documents which are otherwise required to be submitted along with the refund claim.
The Board in the Circular said, “no refund claim, requiring debit from the electronic credit ledger or where the refund would result in re-credit of the amount sanctioned in the electronic credit ledger, shall be filed using old GSTIN.”
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