This circular provides clarifications on certain procedural and substantive issues relating to GST refunds to ensure uniform implementation across field formations.

It clarifies the procedure to be followed where a deficiency memo in Form GST RFD-03 is issued against a refund application. Since the common portal did not permit filing of a fresh refund application for the same period after issuance of a deficiency memo, it is clarified that taxpayers are required to submit the rectified refund application under the same Application Reference Number (ARN). In such cases, re-credit of the amount earlier debited from the electronic credit ledger is not required. The rectified application should be processed with reference to the original ARN until the portal is suitably modified.

The circular also clarifies the eligibility of exporters to claim refund of IGST paid on exports in cases involving import or procurement of capital goods under various export promotion schemes. It explains the impact of amendments to rule 96(10) of the CGST Rules and related notifications. Exporters who imported inputs or capital goods under specified customs notifications were eligible to claim IGST refund on exports up to 9 October 2018. After this date, such exporters are generally restricted from claiming IGST refund.

However, exporters receiving capital goods under the Export Promotion Capital Goods (EPCG) scheme, either through import or domestic procurement, remain eligible to claim refund of IGST paid on exports. All earlier circulars on this issue stand superseded.
(Note: This circular was later rescinded vide Circular No. 125/44/2019-GST dated 18.11.2019.)