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Key changes declared in CGST Notification 12/2024 dated 10th July 2024-Part 2!

On June 22, 2024, the 53rd GST Council meeting was held in Delhi, with Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, presiding. The council proposed various adjustments to GST rates, introduced trade facilitation measures, and sought to streamline GST compliance.

Many circulars and notifications are issued after this meeting to implement changes suggested in the meeting. One such important notification is Notification 12/2024 dated 10th July 2024- Central Tax!

Read “Key changes declared in CGST Notification 12/2024 dated 10th July 2024- Part I!” blog here.

Let's understand the key changes in this notification.

Notification 12/2024- Central Tax dated 10th July 2024-

In rule 88C of CGST Rules, 2017, in sub-rule (1), after the words, letters, and figures “FORM GSTR-1”, the letters, words, and figures “, as amended in FORM GSTR-1A if any,” are inserted. This is w.r.t. introduction of Form GSTR 1A.

Rule 89 of CGST Rules, 2017 deals with the Application for refund. In the said rule, after sub-rule (1A), the following sub-rule is inserted, namely: –

“(1B) Any person, claiming refund of additional integrated tax paid on account of upward revision in price of the goods subsequent to exports, and on which the refund of integrated tax paid at the time of export of such goods has already been sanctioned as per rule 96, may file an application for such refund of additional integrated tax paid, electronically in FORM GST RFD-01 through the common portal, subject to the provisions of rule 10B, before the expiry of two years from the relevant date as per clause (a) of Explanation (2) of section 54:

Provided that the said application for refund can, in cases where the relevant date as per clause (a) of Explanation (2) of section 54 of the Act was before the date on which this sub-rule comes into force, be filed before the expiry of two years from the date on which this sub-rule comes into force.”

This amendment is followed by Circular 226/20/2024-GST dated. 11.07.2024 which contains a list of relevant documents for this refund application. Also, GSTN issued an advisory dated 14^th July 2024 that ill the time such a separate category for claiming a refund of an additional amount of IGST paid is developed on the common portal, such exporter(s) may claim a refund of the additional IGST by filing an application of refund in FORM GST RFD-01 under the category “Any other” with remarks “Refund of additional IGST paid on account of increase in price after export of goods”.

Also, in sub-rule (2) of Rule 89, after clause (ba), the following shall be inserted, namely:

(bb) The statement should include several key details. First, it must contain the number and date of export invoices, accompanied by copies of these invoices. Additionally, the number and date of shipping bills or bills of export, along with copies, must be provided. The number and date of the Bank Realisation Certificate or foreign inward remittance certificate in respect of these shipping bills or bills of export must also be included, accompanied by copies issued by the Authorised Dealer-I Bank.

Furthermore, the statement should detail any refunds already sanctioned under sub-rule (3) of rule 96. If there have been supplementary invoices or debit notes issued due to an upward revision in prices, their number and date, along with copies, must be provided. Details of the payment of additional integrated tax for which the refund is claimed, along with proof of payment and interest paid, should also be included.

Lastly, the statement must include the number and date of the foreign inward remittance certificate issued by the Authorised Dealer-I Bank for additional foreign exchange remittance received due to the upward price revision of exports. A certificate from a practicing chartered accountant or cost accountant confirming that the additional foreign exchange remittance is due to the price revision of goods after export should be included, along with copies of contracts or other relevant documents indicating the need for the price revision. This ensures transparency and proper documentation for refunds claimed due to upward price revisions in exported goods.

(bc) a reconciliation statement, reconciling the value of supplies declared in supplementary invoices, debit notes, or credit notes issued along with relevant details of Bank Realisation Certificate or foreign inward remittance certificate issued by Authorised Dealer-I Bank, in a case where the refund is on account of upward revision in price of such goods subsequent to exports;”

This amendment requires a taxpayer to submit specific documents along with a CA /CMA certificate confirming the said additional foreign exchange remittance is on account of such upward revision in the price of the goods subsequent to export.

New Rule 95B is inserted in CGST Rules, 2017 for Refund of tax paid on inward supplies of goods received by Canteen Stores Department (CSDs) as follows:

“95B. Refund of tax paid on inward supplies of goods received by the Canteen Stores Department. –

(1) Notwithstanding anything contained in rule 95, a Canteen Stores Department under the Ministry of Defence, is eligible to claim a refund of fifty percent. of the applicable central tax paid by it on all inward supplies of goods received by it for the subsequent supply of such goods to the Unit Run Canteens of the Canteen Stores Department or to the authorized customers of the Canteen Stores Department as per notification issued under section 55, shall apply for refund in FORM GST RFD-10A once in every quarter, electronically on the common portal.

(2) Such application for refund of tax paid on inward supplies of goods filed in FORM GST RFD-10A shall be dealt like that of application for refund filed in FORM GST RFD-01 by the provisions of rule 89.

(3) The refund of tax paid by the applicant shall be available, if-

(a) the inward supplies of goods were received from a registered person against a tax invoice and details of such supplies have been furnished by the said registered person in his details of outward supply in FORM GSTR-1 and the said supplier has furnished his return in FORM GSTR-3B for the concerned tax period;

(b) name and Goods and Services Tax Identification Number of the applicant is mentioned in the tax invoice; and

(c) goods have been received by the Canteen Stores Department for the purpose of subsequent supply to the Unit Run Canteens of the Canteen Stores Department or to the authorized customers of the Canteen Stores Department.”

This amendment is followed by Circular No. 227/21/2024-GST dated 11th July 2024 which specifies a revised procedure for processing refund applications filed by the Canteen Stores Department (CSD). Also, GSTN issued an advisory on 22^nd July 2024 about the introduction of FORM GST RFD 10A for filing GST refund applications by CSDs. To read know about this, click here.

Conclusion

The CGST Notification 12/2024 brings significant changes aimed at simplifying GST compliance and improving the refund process for taxpayers. These amendments reflect the GST Council's commitment to enhancing trade facilitation and ensuring efficient tax administration. The introduction of Form GSTR-1A, detailed provisions for claiming refunds by exporters and the Canteen Stores Department underscore the government's responsiveness to industry needs and operational realities.

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