CBIC gives relief to GST payers in case of cancellation of orders

The Central Board of Excise and Customs has allowed the GST payers to either adjust the tax already deposited with the government or seek a refund of the same by filing a form.

New Delhi: In a relief to GST registered businesses, the Central Board of Excise and Customs (CBIC) has further clarified the relief measures announced by the board in case of cancellation of an order.

The board has allowed the GST payers to either adjust the tax already deposited with the government or seek a refund of the same by filing a form.

These measures will be particularly useful for services sectors such as airlines, hotels and hospitality sectors where an invoice was generated by the seller but the order or booking was subsequently canceled by the customer.

For example, if a service provider has generated an invoice against the booking of an airline ticket which was subsequently canceled then in this case, the service provider can seek an adjustment of the GST paid if it has already been deposited with the government. In this case, the department will issue a credit note that can be adjusted against any future sale by the same supplier or service provider.

The second option will be particularly useful for those GST registered businesses that have already paid the GST against a canceled order but who don’t have enough sales in the subsequent period to claim adjustment of the GST already paid against a canceled order.

In such cases, the service provider or seller can file GST RFD-01 form to claim the tax already paid against an order which was later canceled.

This option is particularly useful for those sellers and service providers whose business has come to a standstill due to the lockdown imposed by the government to contain the spread of the novel coronavirus in the country.

“The new clarifications regarding procedural relaxations are welcome and will certainly help the GST payers,” Pritam Mahure, a Pune based chartered accountant told ETV Bharat.

Under the GST law, a seller or supplier is required to file the GSTR-1 form for outward supplies by the 10th day of the next month. They are also required to deposit the GST to the government by the 20th day of the next month even if they do not receive payment against the supply of goods or services.

However, these dates have been staggered region wise.

Relief for exporters

The CBIC has also clarified that exporters can now file letters of undertaking (LUT) till June 30 for full fiscal 2020-21, as against the earlier requirement of filing it by March-end.

Under the GST law, exporters have been allowed to ship consignments overseas by just furnishing a letter of undertaking without paying the Integrated GST (IGST).

The outbreak of COVID-19 virus has hit hard tourism, travel, aviation and hospitality sectors with companies witnessing large-scale cancellations and the government has relaxed procedures and extended deadlines in case of both direct and direct taxes.

However, businesses are seeking more substantive relief for them.

“The coronavirus is an unprecedented crisis and thus GST payers are eagerly awaiting substantive measures in GST much beyond procedural relaxations,” said Pritam Mahure, who has extensively written on the GST related issues.

(Article by Krishnanand Tripathi)