Advisory to UIN Entities claiming GST Refunds

Raju Choudhary

Staff member
There are concerns being raised about growing pendency of GST Refunds. Exporters are reassured that there is no letup in the sanction of GST refunds. The disposal rate is consistently improving monthon month. As on 31st October, 2018, total GST refunds to the tune of Rs 82,775 crore have been disposed by CBIC and State authorities out of the total refund claims of Rs 88,175 crore received so far. Thus, the disposal rate of 93.8 % has been achieved as on 31.10.2018. The pending GST refund claims amounting to Rs 5,400 crore are being expeditiously processed so as to provide relief to eligible exporters. Refund claims without any deficiency are being cleared expeditiously.

In case of IGST refunds, about 93.27 % (Rs 42,935 crore) of the total IGST refund claims (Rs. 46,032 crore) transmitted to Customs from GSTN as on 31st October, 2018 have already been disposed. The remaining claims amounting to Rs. 3,096 crores are held up on account of various deficiencies which have been communicated to exporters for remedial action.

In the case of RFD-01A (ITC Refund) claims, out of the total refund claims of Rs. 42,145 Crore the pendency as on 31st October, 2018 is Rs 159 Crore with Centre and Rs 2,146 crore with States. Provisional/final order has been issued in case of refunds amounting to Rs. 34,602 Crore. In claims amounting to Rs. 5,239 Crore, deficiency memos have been issued by respective GST authorities.

Efforts are being made continuously to clear all the pending refund claims, where ever requisite information is provided and found eligible. Cooperation of the exporter community is solicited to ensure that they respond to the deficiency memos and errors communicated by Centre and State GST as well as Customs Authorities and also exercise due diligence while filing GSTR 1 and GSTR 3B returns as well as Shipping Bills.

The GST Act provides for allotting a Unique Identification Number (UIN) to Consulates, Embassies and other UN Organizations to enable such entities to claim refund of GST paid. One of the conditions for claiming this refund is to file invoice level data in their FORM GSTR-11 on the common portal. There are common discrepancies which have been noticed by GST Authorities while processing refund applications.

FORM GSTR-11 under Rule 82 of the CGST Rules, 2017 mandates reporting “Place of Supply” for every invoice on which refund is applied for. Many UIN entities while filling invoice data have been reporting their place of supply as the State where they are registered instead of the place of supply as reflected in the invoice.

For example, it was observed that Embassies registered in Delhi have been consistently declaring their place of supply as “New Delhi” even on hotel service consumed in the State of Maharashtra for which the place of supply is Maharashtra.

It may be noted that under the GST law, place of supply determines the chargeability of CGST / SGST or IGST tax on an invoice. Generally, except few exceptions, if the location of the supplier and the place of supply are in the same State then CGST + SGST is charged on an invoice and if the location of the supplier and the place of supply are in separate States then IGST is charged.

Therefore, it is advised that while reporting the “place of supply” and charging of CGST / SGST or IGST on an invoice, the details shall be exactly as per the details mentioned in the invoice issued by the supplier of goods or services. Wrong reporting of invoice level data in FORM GSTR-11 or in the statement of invoice submitted may lead to delay in processing / rejection of refund claims.