NITYA Tax Attorneys

Further relaxations under Indirect Taxes amid COVID-19 outbreak

by | Apr 17, 2020 | Insight

To mitigate the turmoil caused by COVID-19 pandemic, Government is continuously providing reliefs to taxpayers. In this regard, following relief measures have been recently announced:

 

  1. Clarification for GST refunds and time limit for filing of Letter of Undertaking (‘LUT’)

 

  • GST refund under category of ‘excess payment of tax’ in Form RFD-01, can be claimed for tax paid in following scenarios:

 

          a)     On services where advance is received and Tax Invoice is issued;

 

          b)      On services where advance is received and Receipt Voucher is issued; and

 

          c)      On goods where supply is made and GST is paid.

 

           The aforesaid refund can be claimed where the following conditions are cumulatively satisfied:

 

            a)      Where services are not provided or goods are returned;

 

            b)      Where Credit Note or Refund Voucher is issued; and

 

             c)      Tax liability is not adjusted in subsequent months.

 

NITYA Comments: The Circular is in consonance with the provisions of GST law which allows refund of GST paid in excess. Consequently, taxpayers need not wait for supply to happen in future to claim adjustment of excess tax paid and can immediately apply for refund. The situations mentioned in the Circular are illustrative and refund shall be available in all cases where a taxpayer issues Credit Note / Refund Voucher.

 

  • Last date of filing of LUT for Financial Year (‘FY’) 2020-21 is extended till June 30, 2020. Till then, taxpayers can quote LUT number of FY 2019-20 on the documents.

 

  • Due date of filing of refund application whose last date falls between March 20, 2020 to June 29, 2020 is extended till June 30, 2020.

 

         (Refer: Circular No.137/07/2020-GST dated April 13, 2020)

 

  1. Special Refund and Drawback Disposal Drive

 

  • The Central Board of Indirect Taxes and Customs (‘CBIC’) has initiated a ‘Special Refund and Drawback Disposal Drive’ to mitigate the hardship caused to the taxpayers (specially MSME’s) due to COVID-19 pandemic.

 

  • The Principal Chief Commissioners / Chief Commissioners have been instructed to release all GST refunds, Customs refunds and Drawback claims pending as on April 7, 2020.

 

  • All such claims shall be disposed-off by April 30, 2020.

 

          (Refer: Instruction No.03/2020-Customs and Instruction No.2/1/2020-GST both dated April 9, 2020)

 

  1. Clearance of goods without original Certificate of Origin

 

  • The DGFT has permitted issuance of digitally signed certificates for exports made under specified Free Trade Agreements (FTA’s) / Preferential Trade Agreements (PTA’s) viz. FTA with ASEAN countries, Japan, SAARC, SAFTA countries etc. have been allowed.

 

  • Certificate of Origin (‘CoO’) will be issued with a digital signature and can then be downloaded / shared with foreign buyer. These certificates can be verified online at https://coo.dgft.gov.in .

 

  • Similarly, importers claiming the benefit of FTA, can pay customs duties provisionally basis digitally signed / unsigned CoO. The final assessment will be done on submission of physical CoO subsequently.

 

          (Refer: Trade Notice No.01/2020-DGFT dated April 7, 2020 and Circular No.18/2020-Customs dated April 11, 2020)

 

  1. Continuation of MEIS Scheme and introduction of RoDTEP Scheme

 

  • MEIS Scheme shall continue till December 31, 2020.

 

  • Prior to December 31, 2020, the Government will notify the goods covered under Remission of Duties and Taxes on Exported Products (‘RoDTEP’) Scheme in a phased manner. Once a product is notified under this Scheme, MEIS Scheme shall cease to apply for such product.

 

NITYA Comments: For details on RoDTEP Scheme, refer to NITYA’s Insight | Issue 103 | Cabinet approves new export incentive scheme – Remission of Duties and Taxes on Exported Products for our earlier update on the same issue (https://nityatax.com/cabinet-approves-new-export-incentive-scheme-remission-of-duties-and-taxes-on-exported-products/).

 

          (Refer: Trade Notice No.03/2020-DGFT dated April 15, 2020)

 

  1. One-time condonation under EPCG Scheme

 

  • Vide Public Notice No.55/2015-20-DGFT dated January 3, 2020, condonation was granted for following till March 31, 2020:

 

                 – Block wise or overall fulfillment of Export Obligation (EO) under EPCG Scheme; and

 

                 – Submission of installation certificate under EPCG Scheme

 

                  This has now been extended till March 31, 2021.

 

  • The requirement to pay additional composition fee to the Regional Authority is also waived off.

 

            (Refer: Public Notice No.01/2015-20-DGFT dated April 7, 2020)

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