Maharashtra Government Internal Circular for GST refund

Maharashtra Government Internal Circular for GST refund:

Due to Covid-19, Maharashtra Government has issued an internal circular directing all the officer’s to follow following procedures for issue of GST refund. The circular comes as a relief for the taxpayers which has issued direction to expedite GST refund process. The internal circular no. 07A of 2020 provides following procedures for approval of GST refund of the tapayers.

1. Background
   • You are aware that India is facing a serious health challenge due to pandemic COVID-2019. In order to mitigate the risk of transmission as well as infection,  the  Government of India will, effect from  25U1  March 2020  has invoked the provisions of the National Disaster Management Act, 2005, and also the  Epidemic Diseases Act, 1897. Accordingly, various orders and Notification» have been issued enforcing a lockdown period up to 17th  May 2020. The Maharashtra Government has also extended this lockdown. You are also aware that to keep necessary office functions going on, Departmental authorities were provided access to the BO System or, as the case may be, the MAHAGST portal through Virtual Private Network (VPN). Accordingly, the Government employees were directed to work from till home with the use of the said VPN.
   • To facilitate the processing of the GST refund while working from home on Internal Circular No. 6A of 2020 was issued on 13th April 2020 as also a  subsequent letter bearing No ACST (VAT-2) GST Refund/2020-21/B-Mumbai dated 16th April 2020 was issued.
   • As per the instructions given vide Internal Circular 1A of 2020 dated 13th January 2020, Internal  Circular  No. 6A of 2020  dated 13th April 2020 and letter dated 16th April 2020 it was made mandatory to submit the refund file, at each stage of refund processing like Issuance of  FORM GST-RFD-03, FORM-GST-RFD-04 or, FORM GST-RFD-06, etc., for the approval of the supervisory officer i.e. the Deputy Commissioner or, as the case may be, the Joint Commissioner and only after approval as above, the necessary refund sanction orders or notices were directed to be issued.
   • However, after the issuance of the Circular No. 6A of 2020 and letter dated 16th April 2020, the suggestions have been received from the Departmental Authorities about the approval of the GST refund. It is requested that the seeking approval for GST refund through an e- mail be withdrawn as it is delaying the processing and grant of the GST refund. This office has examined the said request. In order to expedite the GST refund processing, it has become necessary to withdraw the stipulation which requires the submission of the GST refund file for the approval of the supervisory authority (whether the provisional or the final refund). The approval as above is based on the monetary limit as fixed vide Para 5.5. of the Internal Circular 1A of 2020 dated 13th January 2020.

Maharashtra Government Internal Circular for GST refund

Under these circumstances, the instructions issued in this behalf, from time to time, are modified as under:

Modification of the instructions given vide Internal Circular 1A of 2020 dated 13th January 2020 and letter dated 16th April 2020:

Now, the State Tax Officer/ Asst. Commissioner of State Tax are not required to take approval for sanctioning GST refund if the refund amount is less than a prescribed amount. The prescribed amount is given below:

The monetary limit provided as above uses the certain expression Average monthly refund amount which shall mean the amount of refund specified in the refund application divided by the number of months for which the refund application is filed. This may be explained with the help of an examples:

Say State Tax Officer ha been allocated a GST refund application in respect of taxpayer M/s ABC who has submitted the said application for SEVEN month’s period i.e. April 2019 to October 2019. The refund claimed in the said application is INR 63 lakhs (CGST+SGST+IGST+Cess). Thus, after considering the above expression average monthly refund comes to INR 9 lakhs (63/7).

Therefore, according to the monetary limit fixed in the Table above as per Sr No. 1, in this case the said State Tax Officer would not be required to take the approval of the immediate supervisory authority.

In other words, in case the refund application is filed clubbing the one or more months or has been filed singly (one month) and where the average refund claim as per application or, as the case may be, refund claim per application is INR 10 lakhs or more then, under these circumstances the State Tax Officer, shall seek the approval of the supervisory authority, as detailed in the letter dated 16th April, 2020, through e-mail.

The similar procedures explained above shall also be followed by the Asst. Commissioner of State Tax considering the monetary limit as provided in Sr No. 2 and 3 above in the table, and on that basis it shall be decided as to whether the approval of the supervisory authority is required or not.

It may be noted that as mentioned in the Table above at Sr. No. (5), the Deputy Commissioner in the cases where taxpayers are assigned to him/her, irrespective of the amount of GST refund claim, shall not be required to seek the approval from the Joint Commissioner of State Tax and therefore, it is hereby directed that no file in any form whether through e-mail or physical shall be submitted for approval.

It may be noted that this change in the monetary limit for approval of the refund is NOT applicable to the refund processed under any other Act(s) like MVAT, CST, etc. Therefore, the instructions are given in Table given in Para 5.5. of the Internal Circular No. 1A of 2020 dated 13th January 2020 shall continue to be applicable for the refund under the aforesaid Act(s).

In other words, the modified instructions as given in the Table in respect of approval vis-i-vis monetary limit shall only be applicable to the GST Refund.

All the Nodal Officer(s) who have processed the refund while working from home shall sent an e-mail to the concerned Joint Commissioner of State Tax, within three days from the date of issuance of an order of refund i.e. the order in FORM GST-RFD-04 or, as the case may be, the FORM GST-RFD-06 in the given format:

As a result, the instructions issued in this behalf so far as they relate to the GST refund shall stand modified as above and these modified instructions shall continue to remain effective till the time they are specifically withdrawn.

It is also directed that Nodal Officer shall undertake every possible effort so as to dispose of the pending GST refund whether provisional or final or otherwise on or before the 31st of May 2020.

Here it should be noted that instruction given above shall not be applicable in respect of the taxpayer who is making application in FORM GST RFD-01 or FORM GST RFD-01A as the may be, for the first time.

It shall be noted that all the GST refund applications that are disposed of as per the instructions given vide Internal Circular 6A of 2020 or this Circular, the supervisory authority shall randomly undertake 5-10% cases for Audit and communicate the Audit finding to the Nodal Officer. This exercise shall be completed in a time-bound manner as may be finalized in consultation with the concerned Zonal Additional Commissioner.

It is also clarified that the supervisory officer may in deserving cases exercise the superintendence so as to facilitate the seedy disposal of the refund or, as the case maybe, in the interest of protecting Government Revenue.

Needless to state that all the Departmental Authorities shall follow the aforesaid directions scrupulously.

This Internal Circular is clarificatory in nature and hence cannot be made use of for interpretation of provisions of the law. Difficulty if any, in the implementation of this Circular may be brought to the notice of the office of the Commissioner of State Tax, Maharashtra.

Download Circular here.

Maharashtra Government Internal Circular for GST refund