New procedure to be followed for GST Refund in Maharashtra

INTERNAL CIRCULAR. 07A of 2020

1.1 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  25th March 2020  has invoked the provisions of the National Disaster Management Act, 2005, and also the Epidemic Diseases Act, 1897. Accordingly, various orders and Notifications 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.

1.2 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.

1.3 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.

1.4 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 It is requested that the seeking approval for GST refund through an email be withdrawn as it is delaying the processing and grant of the GST refund.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.

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

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

2.1 On aforesaid background, for speedy disposal of the GST refund, the monetary limit as per provided in para 5.5 of the above referred Circular for the approval of the GST refund is modified as given in the table below:

Sr. No.Refund Processing Officer Average monthly Refund amount or amount of refund per applicationApproval required or not if required designated Authority for Approval
(1)State Tax OfficerLess than Rs. 10 LakhNot Required
(2)State Tax OfficerRs. 10 lakh or moreConcerned Deputy
Commissioner of State Tax
(3)Asst. Commissioner of State TaxLess than Rs. 25 LakhNot requierd
(4)Asst. Commissioner of State TaxRs. 25 Lakh or moreConcerned Deputy
Commissioner of State Tax
(5)Deputy Commissioner of State TaxAny AmountNot Required

2.2 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.

  • (a) Say State Tax Officer has been allocated a GST refund application in respect of taxpayer M/s ABC who has submitted the said refund application for SEVEN month’s period i.e. for the period April-2019 to October-2019. The refund claimed in the said application is Rs. 63 lakh (CGST+SGST+IGST+Cess). Thus, after considering the above expression average monthly refund comes to Rs. 9 lakh.
  • (b) 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.
  • c) in other words, in case the refund application a filed clubbing the one or more months or has been filed singly for one month) and where the average refund claim per application or in the case may be refund claim per application is Rs. 10 Lakh or more than, under the circumstances, the State Tax Officer, shall seek the approval of the supervisory authority, as detailed in the letter dated 16th April 2020, through email.
  • (d) The similar procedure as explained in sub-para (a) to (c) above shall also be followed by the Assistant Commissioner of State Tax considering the monetary limit as provided in the Table at Sr. (2) and (3) above and on that basis it shall be decided as to whether the approval of the supervisory authority is required or not.
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2.3 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.

2.4 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).

2.5 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.

3. All the Nodal Officer(s) who have processed the refund while working from home shall send 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 format.

4. 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.

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5. 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.

6. Processing of GST refund where the refund application is filed for the first time.

  • 6.1 It may be noted that the instructions given in the foregoing Para’s shall not be applicable in respect of the taxpayer who has on or after 1st July 2017 filed the refund application in FORM-GST-RFD-01 or, as the case may be, in FORM-GST-RFD-01A i.e. for the first time.
  • 6.2 In all such cases it is mandatory to undertake the field visit at least once. Therefore, the Nodal Officer while working from home, shall complete the verification and quantification of the GST refund on the basis of the available record in the file or, as the case may be, on the BO System/SAP system (i.e. everything shall be kept ready so that the refund order may be issued as soon as the lockdown is over.
  • 6.3 Once the lockdown is over and the office functioning returns to normalcy then visit the place of business of the said taxpayer shall be undertaken at earliest. The visit report in this behalf shall be kept on the record and thereafter the refund as above, shall be issued only upon the approval of the concerned supervisory authority. Please refer instructions given in Para 5.5. of the Internal Circular No. 1A of 2020 dated the 13th of January 2020.
  • 6.4 It is reiterated that, in all such cases, the refund shall be granted only after following the procedure laid down vide Internal Circular No. 16A of 2019 dated 15th May 2019. In other words, the refund in all cases falling under aforesaid category the order in FORM-GST-RFD-04 and/or FORM-GST-RFD-06 shall be issued or place of the business as available on the record is visited.

7. 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.

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

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

10. 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.

Read Full Circular from here: Internal Circular No. 07A of 2020


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