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CBIC issued circular w.r.t Manner of filing refund of unutilized ITC on account of export of electricity

GST Refund on export of electricity

Circular No. 175/07/2022-GST Dated the 6th July, 2022

Reference has been received from Ministry of Power regarding the problem being faced by power generating units in filing of refund of unutilised Input Tax Credit (ITC) on account of export of electricity. It has been represented that though electricity is classified as “goods” in GST, there is no requirement for filing of Shipping Bill/ Bill of Export in respect of export of electricity. However, the extant provisions under Rule 89 of CGST Rules, 2017 provided for requirement of furnishing the details of shipping bill/ bill of export in respect of such refund of unutilised ITC in respect of export of goods. Accordingly, a clause (ba) has been inserted in sub-rule (2) of rule 89and a Statement 3B has been inserted in FORMGSTRFD-01of the CGST Rules, 2017 vide notification No. 14/2022-CT dated 5thJuly, 2022.In order to clarify various issues and procedure for filing of refund claim pertaining to export of electricity, the Board,  in  exercise  of  its  powers conferred  by  section  168  (1)  of  the  CGST  Act,  hereby prescribes  the  following  procedure  for  filing  and  processing  of  refund  of  unutilised  ITC  on account of export of electricity:

2.         Filing of refund claim:

Till  the  time  necessary  changes  are carried  out  on  the  portal,  the  applicant  would  be required to file the application for refund under “Any Other” category electronically in FORM GST  RFD-01, on  the  portal. In 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 debit from the electronic credit ledger.

The applicant would be  required to furnish/upload the details contained in Statement 3B (and not in statement3) of FORM GST RFD-01(in pdf format), containing the number and date of the export invoices, details of energy exported, tariff per unit for export of electricity as per agreement.

he  applicant  will  also  be  required  to  upload  the  copy  of statement  of scheduled energy for electricity exported by the Generation Plants(in format attached as Annexure-I)  issued  as  part  of  Regional  Energy  Account  by  Regional  Power  Committee  Secretariat (“RPC”) under regulation 2 (1)(nnn) of the CERC(Indian Electricity Grid Code) Regulations, 2010,for  the  period  for  which  refund  has  been  claimed  and  the  copy  of  the  relevant agreement(s)  detailing  the  tariff  per  unit  for  the  electricity  exported. The applicant will also give details of calculation of the refund amount in Statement -3A of FORM GST RFD-01by uploading the same in pdf format along with refund application in FORM GST RFD-01.

3.         Relevant date for filing of refund:

As per sub-section (1) of section 54 of the CGST Act, 2017, time period of two years from the relevant date has been specified for filing an application of refund. Electrical energy is  in  nature  of “goods”  under  GST  and  is  exported  on  a  continuous  basis through  the transmission lines attached to the land. Therefore, it is not possible to determine the specific date on which a specific unit of electricity passes through the frontier. However, a statement of scheduled energy for export of electricity by a Generation Plant is issued by Regional Power Committee RPC Secretariat, as a part of Regional Energy Account (hereinafter referred to as “REA”) under Regulation 2(1)(nnn) of the Central Electricity Regulatory Commission (Indian Electricity  Grid  Code)  Regulations,  2010.  Accordingly,  it  is  hereby  clarified that  in  case  of export of electricity, the relevant date shall be the last date of the month, in which the electricity has  been  exported  as  per  monthly Regional  Energy  Account  (REA)  issued by  the Regional Power Committee Secretariat under regulation 2(1)(nnn) of the CERC(Indian Electricity Grid Code) Regulations, 2010.

4.         Processing of refund claim by proper officer:

Rule  89(4)  provides  for  the  formula  for  calculation  of  refund  of  unutilised  ITC  on account of zero-rated supplies which is reproduced as under:

Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero rated supply of services) x Net ITC ÷Adjusted Total Turnover

Export of electricity being zero-rated supply, refund of unutilised ITC on account of export of electricity would also be calculated using the same formula.

The  turnover  of  export  of  electricity  would  be  calculated  by  multiplying  the  energy exported  during  the  period  of  refund  with  the  tariff  per  unit  of  electricity,  specified  in  the agreement. It is clarified that quantum of Scheduled Energy exported, as reflected in the Regional Energy Account (REA) issued by Regional Power Committee (RPC) Secretariat for a particular month, will be deemed to be the quantity of electricity exported during the said month and will be used for calculating the value of zero-rated supply in case of export of electricity. Such monthly Regional Energy Account (REA) issued by Regional Power  Committee  (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 calculation of the value of the exports  of  electricity during  the  month,  can  be  done  based  on  the  quantity  of  scheduled electricity exported during the month by the exporter (as detailed in the REA for the month)and the  tariff  rate  per  unit  (details  of  which  will  have  to  be  provided  by  the  concerned  exporter based on agreed contracted rates).

It is also mentioned that usually, the quantum of electricity exported as specified in the statement of scheduled energy exported and on invoice should be same. However, in certain cases,  it  might  happen  that  the  quantum  of  electricity  exported  as  mentioned  on  invoice  is different  from  the  quantum  of  electricity  exported  mentioned  on  the  statement  of  scheduled energy uploaded with REA on Regional Power Committee website. In such cases, turnover of export of electricity shall be calculated using the lower of the quantum of electricity exported mentioned on the statement of scheduled energy exported and that mentioned on the invoice issued on account of export of electricity.

Adjusted Total Turnover shall be calculated as per the clause (E) of sub-rule (4) of rule 89. However, as electricity has been wholly exempted from the levy of GST, therefore, as per the definition of adjusted total turnover provided at clause (E) of the sub-rule (4) of rule 89, the turnover of electricity supplied domestically would be excluded while calculating the adjusted total turnover. The proper officer shall invariably verify that no ITC has been availed on the inputs and inputs services utilised in making domestic supply of electricity.

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 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-06and the payment order in FORM GST RFD-05.

Difficulties,  if  any,  in  implementation  of  these  instructions  may  be  informed  to  the Board (

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