This circular provides clarifications on certain refund-related issues to ensure uniform implementation of GST provisions and to address practical difficulties faced by taxpayers.

It clarifies that recipients of deemed export supplies are eligible to claim refund of tax paid even if they have availed input tax credit (ITC) on such supplies. Earlier restriction requiring non-availment of ITC by recipients is withdrawn. To prevent double benefit, recipients claiming refund must debit the corresponding ITC from their electronic credit ledger and furnish prescribed undertakings. Circular No. 125/44/2019–GST is modified to this extent.

The circular also extends relief to taxpayers who inadvertently reported zero-rated supplies or exports in Table 3.1(a) instead of Table 3.1(b) of FORM GSTR-3B. Such taxpayers are allowed to file refund claims for the period from 1 July 2017 to 31 March 2021, subject to the condition that the refund amount does not exceed the aggregate integrated tax reported in Tables 3.1(a), 3.1(b) and 3.1(c).

Further, it clarifies the method of calculating “Adjusted Total Turnover” under Rule 89(4) for refund of unutilised ITC. The restriction limiting the value of zero-rated supply of goods to 1.5 times the value of like domestic goods also applies while computing adjusted total turnover. This ensures consistency in refund calculations.

These clarifications aim to remove ambiguities, avoid litigation and facilitate smooth processing of refund claims.