Page 46 - GSTL_21st May 2020_Vol 36_Part 3

J72 GST LAW TIMES [ Vol. 36
• If the exporter received supplies either under Notification No.
48/2017-C.T. or 40/2017-C.T., at any time during the year, will such
exporter be barred for the life time from claiming refund under ex-
ports on payment of IGST or be restricted from claiming refund on
exports on payment of IGST during the financial year in which sup-
plies were received under the prescribed notifications. A reasonable
view would be that supplier upon exhausting the stock of supplies
received under Notification No. 48/2017-C.T. or 40/2017-C.T.,
would be entitled for claiming the benefit of exporting on payment
of IGST. A clarification in this regard will be helpful to the industry.
The above said confusions have restricted the exporters in encashing the transi-
tional credits. This has led to exporters to keep the transitional credits in its books
without being able to encash transitional credit as refund.
Rule 89(4)(C) of CGST Rules, has restricted the turnover of zero-rated
supply of goods for the purpose of claiming refund to maximum of 1.5 times of
domestic supplies. The need of tinkering with this rule is beyond once imagina-
tion. When the Rule 96B was inserted emphasising for realization of export pro-
ceeds within the period as prescribed under FEMA and as permitted by RBI. This
Rule 96B, read with Rule 36(4) could have taken care to encounter the fake ex-
porters claiming refund. Therefore the amendment to Rule 84(4)(C) will only re-
sult in reduction of refund to genuine exporters, and increase the cost.
As a compliment the exporter will be burdened with compliance cost, in
justifying the zero-rated turnover for goods. The icing on the cake will be when
the exporters who does not have a comparable domestic supplies, and when the
exporter is dealing with client specific customized goods. In such cases the ex-
porter may be made to run pillar to post in justifying its turnover of zero-rated
supply of goods in terms of Rule 89(4)(C). This amendment to the rule could
open up valuation issues for the purpose of refund, and shrink the refund and
also cause unwanted delays in processing refund claims.
Filing of fresh refund claim, in pursuance of deficiency memo : Upon
filing of refund claim within the relevant date, if a deficiency memo is issued the
refund claim amount debited from electronic credit register will be re-credit
through PMT-03, once the deficiency memo is rectified a fresh claim is required
to be filed. Circular No. 125/44/2019-GST has clarified that fresh claim should be
filed within 2 years from the relevant date as defined in explanation after sub-
section (14) of Section 54 of CGST Act. Such an interpretation would result in
making the claim time barred. if the refund claims were filed nearing due date
and if any deficiency memo’s are issued. As per the interpretation of above men-
tioned circular the claim will be time-barred though the original refund claim
was filed within the relevant date. This principle brought out through circular is
diametrically opposite to settled position of law, in case of CCE v. Arya Exports
and Industries - 2005 (192) E.L.T. 89 (Del.), it was held that “refund claim cannot be
denied to them merely on the ground that the same was not filed in the prescribed form. If
the refund claim has not been filed on proper form or without necessary documents the
Department can direct the appellants to file the same in proper prescribed form along
with supporting documents. But as far as the time for filing the refund claim is con-
cerned, it has to be considered from the date the refund claim was filed initially in the

GST LAW TIMES  21st May 2020  46