This circular provides a mechanism to enable taxpayers registered in the erstwhile Union Territory of Daman & Diu to file GST refund claims for periods prior to its merger with the UT of Dadra & Nagar Haveli, where practical difficulties were faced due to migration to new GSTINs.

On merger, new GSTINs with UT code 26 were issued from 1 August 2020 and taxpayers transferred their input tax credit (ITC) balances from old GSTINs to new GSTINs as per prescribed procedure. As a result, taxpayers were unable to file refund claims for zero-rated supplies or inverted duty structure relating to the pre-merger period because the old GSTINs no longer had ITC balances, and system validations did not allow filing such refunds from the new GSTINs.

To address this issue and ensure uniform implementation, the circular prescribes that refund applications for the pre-merger period shall be filed under the “Any other” category on the GST portal using the new GSTIN. The applicant must clearly mention the actual refund category and relevant period in the remarks column and submit all supporting documents as normally required. At the time of filing the application, no debit from the electronic credit ledger is required.

After examination of the claim, if the proper officer finds any refund amount admissible that requires debit of ITC, the applicant will be asked to debit the required amount through Form GST DRC-03. Upon receipt of proof of such debit, the refund and payment orders will be issued. For refund categories where no ITC debit is required, applications may also be filed under “Any other” with appropriate remarks and documents.

The circular clarifies that no refund claim involving debit or re-credit of ITC shall be filed using the old GSTIN and directs field formations to issue suitable trade notices for awareness.