Understanding Practical Issues On Refund Under GST

MCQ SELF CHALLENGE #0101 ON PRACTICAL ISSUES ON REFUND UNDER GST

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Here is our insightful post of WMCQ on concept based practical professional knowledge on practical issues on Refund under GST in a unique manner to be self-answered by participants. The detailed answer of these MCQs shall be posted next day for the self-assessment of the participants

MCQ 101.1: Mr. A has filed an application for refund of Rs 10 Lakhs. ITC reflecting in GSTR-2A of Mr. A is for Rs 8 Lakhs. Which among the following is correct?

A. Mr. A is eligible for refund of its 10 lakhs and he need to submit copy of invoices for whole Rs 10 lakhs

B. Mr. A is eligible for refund of Rs 5 lakhs and he need to submit copy at invoices for whole Rs 8 lakhs.

C. Mr. A is eligible for refund of Rs 10 lakhs and he need not to submit copy of invoices for whole Rs 10 lakhs D. Mr. A is eligible for refund of Rs 8 lakhs and he need not to submit copy of invoices for whole is a lakhs

MCQ 101.2: Mr. XYZ is allowed provisional refund of Rs 2 lakhs by refund sanctioning authority. But the same has been refused by refund disbursing authority on account of ineligible input tax credit. Which among the following is correct?

A. Refund disbursing authority cannot refuse the sanction order.

B. Refund disbursing authority can refused the sanction order.

C. Refund disbursing authority cannot refuse the sanction order but can make adjustment on account of any demand,

D. None of the above

Answer MCQ Self Challenge #0101

Answer MCQ 101.1:

C) Mr. A is eligible for refund of is 10 lakhs and he need not to submit copy of invoices for whole Rs 10 lakhs.

Practical Analysis for MCQ 101.1:

• In view of the difficulties being faced by the claimants of refund relating to clarification on submission of invoices, Government has issued vide Circular No. 59/2018 to straight line the procedure of refund.
• It has been decided that the refund claim shall be accompanied by a print-out of FORM GSTR-2A of the claimant for the relevant period for which the refund is claimed. The proper officer shall rely upon FORM GSTR-2A as an evidence of the supply by the corresponding supplier in relation to which the input tax credit has been availed by the claimant.
• It may be noted that there may be situations in which FORM GSTR-2Amay not contain the details of all the invoices relating to the input tax credit availed, possibly because the supplier's FORM GSTR-1 was delayed or not filed in such situations, the proper officer may call for the hard copies of such invoices if he deems it necessary for the examination of the claim for refund
• It is emphasized that the proper officer shall not insist on the submission of an invoice (either original or duplicate) the details of which are present in FORM GSTR-2A of the relevant period submitted by the claimant.
• Based on the above analysis. Answer to MCQ 101.1: Mr. A is eligible for refund of Rs 10 lads and he need not to submit copy of invoices for whole Rs 10 lakhs.

Answer MCQ 101.2:

C) Refund disbursing authority cannot refuse the sanction order but can make adjustment on account of any demand.

Practical Analysis for MCQ 1012:

• In view of the difficulties being faced by the claimants of refund relating to clarification on power of refund disbursing authority on refusing to accept the claim of refund, Government has issued vide Circular No 99/2018 to straight line the procedure of refund
• A few cases have come to notice where a tax authority, after receiving a sanction order from the counterpart tax authority (Centre or State), has refused to disburse the relevant sanctioned amount calling into question the validity of the sanction order on certain grounds Eg a tax officer of one administration has sanctioned, on a provisional basis, 90 per cent of the amount claimed in a refund application for unutilized ITC on account of exports. On receipt of the provisional sanction order the tax officer of the counterpart administration has observed that the provisional refund of input tax credit has been incorrectly sanctioned for ineligible input tax credit and has therefore refused to disburse the tax amount pertaining to the same.
• It is clarified that the remedy for correction of an incorrect or erroneous sanction order lies in filing an appeal against such order and not in withholding of the disbursement of the sanctioned amount.
• 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
• It is hereby clarified that neither the State nor the Central tax authorities shall refuse to disburse the amount sanctioned by the counterpart tax authority on any grounds whatsoever except under sub-section (11) of section 54 of the CGST Act.
• It is further clarified that any adjustment of the amount sanctioned as refund against any outstanding demand against the claimant can be carried out by the refund disbursing authority if not already done by the refund sanctioning authority.
• Based on the above analysis. Answer to MCQ 101.2: C) Refund disbursing authority cannot refused the sanction order but can make adjustment on account of any demand

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different Please do not treat this as professional opinion; you can definitely have your own opinion.)

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Sincere Regards,

CA Sanjay Kumar Agrawal