This circular provides clarifications on certain practical difficulties faced by registered persons in complying with GST provisions due to disruptions caused by the COVID-19 pandemic, in addition to the reliefs already announced earlier.

It clarifies that where GST has been paid on advances received for services that are subsequently cancelled, adjustment should generally be made through issuance of a credit note or refund voucher, as applicable, instead of filing a separate refund claim. A refund application may be filed only where such adjustment is not possible due to absence of output tax liability. Similar treatment is prescribed where goods supplied are returned by the recipient.

The circular further clarifies that the validity of Letter of Undertaking (LUT) for zero-rated supplies expiring on 31 March 2020 stands extended up to 30 June 2020. Taxpayers are allowed to continue making zero-rated supplies without payment of tax during this period, subject to furnishing the new LUT by the extended date.

It also confirms extension of due dates for deposit of tax deducted at source (TDS) and filing of FORM GSTR-7, as well as extension of the limitation period for filing refund applications where the original due date fell during the notified COVID-19 relief period. These clarifications aim to ease compliance and provide certainty to taxpayers during the pandemic.