QUESTION
We are applying for GST refund for the period july 17 to march 18 on 18th march 2020.We enclose Refund working for your reference, as per the formula we are eligible to claim Refund of Rs.5964504, however, when we compare balance in electronic credit ledger at the time of filing Refung V/S balance in electronic credit ledger at the end of tax period for which refund is claim, Our Refund gets reduced to Rs.720972. QUESTION: Whether Working attached here is proper?, Are we eligible to claim only Rs. 720972 or do we have any other option to claim full Refund of Rs.5964504. We failed to understand logic of Refund amount considering the fact that we have ITC of Rs. 6039661 as on 31st mar 18 and ITC of Rs. 7177022 as on 17th march 2020, still when we take lesser of the two our refund comes to only Rs. 720972. Kindly Explain July 17 to march 18 Calculation of adjusted annual turnover T/O OF ZERO RATED SUPPLY OF GOODS AND SERVICE NET INPUT TAX CREDIT ADJUSTED TOTAL T/O REFUND AMOUNT 1 44894090 2,56,35,360.00 19,29,54,208 5964504 value as per 3A bal in electronic credit ledger at the end of the tax period for which refund is claimed balance in electronic credit ledger at the time of filing of refund eligible (lowest) IGST 5964504 5318689 0 0 CGST 360486 3616936 360486 SGST 360486 3560086 360486 Total 6039661 7177022 720972
ANSWER
Facts of the case: Calculation of eligible refund amount for FY 17-18.
Law Applicable: Circular No. 59/33/2018-GST
3.1. Currently, in case of refund of unutilized input tax credit (ITC for short), the common portal calculates the refundable amount as the least of the following amounts:
a) The maximum refund amount as per the formula in rule 89(4) or rule 89(5) of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the 'CGST Rules') [formula is applied on the consolidated amount of ITC, i.e. Central tax + State tax/Union Territory tax +Integrated tax + Cess (wherever applicable)];
b) The balance in the electronic credit ledger of the claimant at the end of the tax period for which the refund claim is being filed after the return for the said period has been filed; and
c) The balance in the electronic credit ledger of the claimant at the time of filing the refund application.
3.2. After calculating the least of the three amounts, as detailed above, the equivalent amount is to be debited from the electronic credit ledger of the claimant in the following order:
a) Integrated tax, to the extent of balance available;
b) Central tax and State tax/Union Territory tax, equally to the extent of balance available and in the event of a shortfall in the balance available in a particular electronic credit ledger (say, Central tax), the differential amount is to be debited from the other electronic credit ledger (i.e., State tax/Union Territory tax, in this case).
Interpretation: As per Circular No. 59/33/2018-GST refund of unutilized ITC, refundable amount is the least of the following amounts:
a) Maximum refund amount as per the formula in rule 89(4) or rule 89(5) - Rs.59,64,504
b) Balance in ECL at the end of the tax period for which the refund claim is being filed - Rs. 60,39,661
c) Balance in ECL at the time of filing the refund
application - Rs.7,20,972
Further refund is eligible to the extent available in your
Electronic credit ledger at the time of filing of refund claim because ITC other
than the amount in ECL has already been utilized by you. So for the amount over
and above the balance in ECL that is already utilized by you will not be
available for refund.
Conclusion: In your case Least amount being Rs.7,20,972, therefore refund can be claimed for Rs.7,20,972 only.(Reply dt.17-03-2020)