CBIC Notifies Procedure For Filing Refund Of Unutilized ITC On Account Of Export Of Electricity

The CBIC has received a reference from the Ministry of Power regarding the problem being faced by power generating units in filing a refund of unutilised Input Tax Credit (ITC) on account of the export of electricity.

It has been represented that though electricity is classified as "goods" in GST, there is no requirement for the filing of a shipping bill or bill of export in respect of the export of electricity.

However, the provisions under Rule 89 of the CGST Rules, 2017 provided for the requirement of furnishing the details of shipping bill/bill of export in respect of the refund of unutilised ITC in respect of the export of goods. Accordingly, a clause (ba) has been inserted in sub-rule (2) of rule 89 and a Statement 3B has been inserted in FORM GST RFD-01 of the CGST Rules, 2017 vide notification No. 14/2022-CT dated July 5, 2022.

In order to clarify various issues and the procedure for filing of refund claims pertaining to the export of electricity, the Board prescribed the procedure for filing and processing of refund of unutilised ITC on account of export of electricity.

At the time necessary changes are carried out on the portal, the applicant would be required to file the application for refund under the "Any Other" category electronically on FORM GST RFD-01. In the remark column of the application, the taxpayer would enter "Export of electricity-without payment of tax (accumulated ITC)". At this stage, the applicant is not required to make any debits from the electronic credit ledger.

The applicant would be required to furnish/upload the details contained in Statement 3B of FORM GST RFD-01 (in pdf format), containing the number and date of the export invoices, details of energy exported, and tariff per unit for export of electricity as per agreement.

The applicant will also be required to upload a copy of the statement of scheduled energy for electricity exported by generation plants issued by the Regional Power Committee Secretariat (RPC) as part of the Regional Energy Account under regulation 2 (1) (nnn) of the CERC (Indian Electricity Grid Code) Regulations, 2010.It will be for the period for which a refund has been requested, and it will be accompanied by a copy of the relevant agreement(s) outlining the tariff per unit for the exported electricity.The applicant will also give details of the calculation of the refund amount in Statement-3A of FORM GST RFD-01 by uploading it in pdf format along with the refund application in FORM GST RFD-01.

The CBIC clarified that the quantum of scheduled energy exported, as reflected in the Regional Energy Account (REA) issued by the RPC Secretariat for a particular month, will be deemed to be the quantity of electricity exported during the month. It will be used for calculating the value of zero-rated supply in the event of an export of electricity. The monthly REA issued by RPC Secretariat, as uploaded on the websites of RPC Secretariat, can be downloaded by GST officers as well as the concerned electricity generator for the purpose of refund under Rule 89(4) of CGST Rules 2019.

"The proper officer shall calculate the admissible refund amount as per the formula provided under rule 89(4) and as per the clarification furnished above. Further, upon scrutiny of the application for completeness and eligibility, if the proper officer is satisfied that the whole or any part of the amount claimed is payable as a refund, he shall request the applicant, in writing, if required, to debit the said amount from the electronic credit ledger through FORM GST DRC-03. Once the proof of such debit is received by the proper officer, he shall proceed to issue the refund order in FORM GST RFD-06 and the payment order in FORM GST RFD-05," the circular read.

Circular No. 175/07/2022-GST

Dated: 06.07.2022

Click Here To Read/Download Circular