This circular provides clarifications on certain GST-related issues to remove ambiguities and ensure uniform application of the law.

It clarifies the amendment to section 16(4) of the CGST Act relating to availment of input tax credit (ITC) on debit notes. With effect from 1 January 2021, the relevant financial year for determining the time limit to avail ITC on a debit note shall be the financial year in which the debit note is issued, and not the year of the original invoice. The amended provision applies to all ITC availed on or after 1 January 2021, irrespective of whether the debit note was issued before or after that date.

The circular also clarifies that where invoices are issued in the form of e-invoices under rule 48(4) of the CGST Rules, carrying a physical copy of the invoice during movement of goods is not mandatory. Production of the QR code containing the embedded Invoice Reference Number (IRN) in electronic form is sufficient for verification by tax officers.

Further, it clarifies the restriction on refund of unutilised ITC under the first proviso to section 54(3) of the CGST Act in cases of export of goods. The restriction applies only where goods are actually subjected to export duty at the time of export. Goods attracting nil export duty, fully exempt goods, or goods not covered under the Second Schedule to the Customs Tariff Act are not treated as subjected to export duty, and refund of accumulated ITC in such cases is allowable.