GST refunds – Government addresses significant concerns

Glad to share that the much needed definition of ‘adjusted total turnover’ relevant for determination of refund eligible has been amended vide Notification No. 39/2018. Basis the concerns raised by many members NASSCOM has been requesting for this amendment for quite some time now and have had series of engagements with the GST council secretariat and concerned officials. We are glad that our recommendations are considered.


The amendment puts to rest the anomaly in the mechanism of determination of zero rated supplies vis-à-vis adjusted total turnover for refund purposes.  The formula was inconsistent in that it considered realisation for the purpose of determination of export turnover but total turnover was based on discloses made in the returns (i.e. as per billings).  A copy of the notification is attached to this mail for your reference.


Several other issues raised by NASSCOM are being addressed as part of the Notification 39 and circular 59 attached herewith. Summary of these issues is provided below.


  • Submission of invoices: Refund claims to be accompanied by print out of GSTR-2A.  Hard copies of invoices may be called for if required in case of details not appearing GSTR-2A.  Proper office should not insist of copies of invoices appearing in GSTR-2A. Further the Applicant to submit details of input invoices in format provided with declaration on eligibility of credit.


  • Clarification on scope of Rule 96(10): Restriction under rule 96(10) of the CGST Rules, applies only to those purchasers/importers who are directly purchasing/importing supplies on which the benefit of certain notifications, as specified in the said sub-rule, has been availed


  • Disbursal of refund amount after sanction: If any discrepancy is noticed by the disbursing authority, the same should be brought to the notice of the counterpart refund sanctioning authority, the concerned counterpart reviewing authority and the nodal officer, but the disbursal of the refund should not be withheld


  • System validation in calculating refund: Least of refund due, credit balance at end of tax period in which refund is filed and credit balance at the time of filing the refund application


  • Re-credit of rejected refund amount: Proper officer shall order for the rejected amount to be re-credited to the electronic credit ledger of the claimant using FORM GST RFD-01B


  • Status of refund claim after deficiency memo: Show-cause-notices are not required to be issued where deficiency memos have been issued. A refund application which is re-submitted after the issuance of a deficiency memo shall have to be treated as a fresh application.


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