This circular provides clarifications on various refund-related issues under GST with the objective of ensuring uniform implementation of refund provisions across field formations.

It clarifies that Input Service Distributors, composition taxpayers, and non-resident taxable persons are not required to file FORM GSTR-1 and GSTR-3B for claiming refunds. Instead, filing of their respective prescribed returns, namely FORM GSTR-6 (ISD), FORM GSTR-4 (composition taxpayers), and FORM GSTR-5 (non-resident taxable persons), is sufficient for claiming refund of balances in electronic cash or credit ledgers, as applicable.

The circular also addresses difficulties faced by exporters of services and suppliers to SEZs who had incorrectly reported zero-rated supplies in FORM GSTR-3B for the period July 2017 to March 2018. It allows such taxpayers to file refund claims of integrated tax paid, subject to the condition that the refund amount does not exceed the total integrated tax declared across relevant tables of FORM GSTR-3B.

Further, it clarifies that exporters making zero-rated supplies under bond or LUT are eligible to claim refund of unutilised input tax credit of compensation cess paid on inputs, even if the final product is not liable to compensation cess. However, where zero-rated supplies are made on payment of integrated tax, compensation cess credit cannot be utilised for payment of IGST and no refund of such cess is admissible.

The circular also states that bond or LUT is not required for export of exempted or non-GST goods, and exporters in such cases are eligible for refund of unutilised ITC of applicable taxes and cess.

Lastly, it explains the limited scope of restriction under rule 96(10) of the CGST Rules, clarifying that it applies only where exporters directly procure goods from suppliers availing specified tax exemption or concessional rate notifications, and not in other indirect procurement scenarios.