GST refunds alert! Modi government takes this big decision - Important points of CBIC circular

In view of the ongoing Covid 19 pandemic, the Central Board of Indirect Taxes and Customs (CBIC) releasing a circular has informed about an important decision. The Modi government has extended the alternate mechanism facility for exporters to claim IGST refunds in cases of mismatch in invoice number in GST returns and shipping bill filed with customs till December 31, 2019.

Central Board of Indirect Taxes and Customs (CBIC) Circular

"Considering that the entire country is facing unprecedented challenges due to the COVID-19 pandemic, and that the exporters are facing genuine hardships due to the SB005 errors, it has now been decided to extend the facility of SB005 error correction in the Customs EDI (Electronic Data Interchange) system for shipping bills with date up to December 31, 2019," the Central Board of Indirect Taxes and Customs (CBIC) said in a circular.

Mismatch error

SB005 is an error shown for mismatch between invoice number in shipping bill and in GSTR-1, due to which the refund gets stuck.

Initially, this mechanism was only available for shipping bills filed till December 31, 2017. But, this has been extended time and again through a number of circulars and now with the recent circular, it is extended for shipping bills filed till December 31, 2019.

Earlier, on April 17, the Central Board of Indirect Taxes and Customs (CBIC) had said that since March 30, it has processed 12,923 refund applications involving claims worth Rs 5,575 crore to help the GST taxpayers in the present Covid-19 situation. While in the last week itself, CBIC has processed 7,873 claims worth Rs 3,854 crore.

CBIC said that a trade and business friendly measure taken by it through a circular requiring taxpayers to give HSN/SAC code along with the refund application, is being misconstrued by as troubling the taxpayers in Covid-19 like situation.  It said the provision was approved by the GST Council to facilitate early ITC refunds and to ensure that the wrong ITC claims are not processed in the absence of relevant information.

"It had been brought to the notice of GSTC by various stakeholders including the taxpayers. It was noticed that a lot of time is spent in verification of whether the credit was availed on services and/or Capital Goods in certain categories for the refund claims," CBIC said in a statement.