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

It clarifies the scope of 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 financial year of the original invoice. The amended provision applies to availment of ITC 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 an e-invoice has been generated in accordance with rule 48(4) of the CGST Rules, carrying a physical copy of the tax invoice during movement of goods is not mandatory. Production of the QR code having the embedded Invoice Reference Number (IRN) in electronic form is sufficient for verification by the proper officer.

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