CBIC Clarifications on Issues relating to GST Refund Claims of UIN Agencies (UN, etc.)

CBIC Clarifications on Issues relating to GST Refund Claims of UIN Agencies (UN, etc.)

CBIC has clarified various Queries/ Issues on GST Refund Claims of UIN agencies, relating to compliance with letter of reciprocity, Refund Claim Checklist (certificate/ Undertaking/ Statement of Invoices), Prior Permission letter for purchase of vehicles, Non-availability of refunds to personnel and officials of UN and other International organizations, Waiver from recording UIN in the invoices during April, 2018 to March, 2019, Format of Monthly report, etc., as under:

Clarifications on GST Refund Claims of UIN Entities: CBIC Circular No. 63/37/2018 GST dt. 14 Sept. 2018

Subject: Clarification regarding processing of refund claims filed by UIN entities – regarding

1. The Board vide Circulars No. 36/10/2018-GST dated 13th March, 2018 and No. 43/17/2018-GST dated 13th April, 2018 has specified the detailed procedure for filing and processing of refund applications by UIN entities (Embassy/ Mission/ Consulate/ United Nations Organizations/ Specified International Organizations). Various representations have been received on certain issues pertaining to the processing of such refund claims. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act) hereby clarifies the said issues as below:

2. Non-compliance with letter of reciprocity: Notifications No. 13/2017 – Integrated Tax (Rate), 16/2017-Central Tax (Rate) and No. 16/2017 – Union Territory tax (Rate) all dated 28th June, 2017 and corresponding notifications under the respective State Goods and Services Tax Acts provide for examination of the refund claims in accordance with the letter of reciprocity issued by the Ministry of External Affairs (hereinafter referred to as MEA). Generally, these letters of reciprocity have certain conditions specified on the basis of which refunds have to be processed and sanctioned. For example, letters may specify the minimum value of goods or services or the end use of such goods or services (official or personal purposes).

2.1 It has been observed that many UIN entities are claiming the refund on all invoices irrespective of whether or not they are eligible for the same as per the reciprocity letter issued by MEA. It is observed that such claims are attested/signed by Diplomats/Consulars and authorized signatories of the Consulates or Embassies of the foreign countries.

3. UIN entities have been advised to submit a statement of invoices and hard copies of only those invoices wherein the UIN is not mentioned vide Circular No. 43/17/2018-GST dated 13th April,2018. Further, refund processing officers have been advised not to request for original or hard copy of the invoices unless necessary. However, it is observed that the delay in processing of the UIN refunds is primarily due to the non-furnishing of the hard copy of the invoices by the UIN entities and the statement of invoices as specified in paragraph 2.1 of Circular No. 43/17/2018-GST dated 13.04.2018. It may be noted that the same are needed in order to determine the eligibility for grant of refund in accordance with the reciprocity letter issued by MEA. Further, it has been observed that in some cases, the Certificate and Undertaking submitted by the UIN entities is not in accordance with Notifications No. 13/2017 – Integrated Tax (Rate), 16/2017-Central Tax (Rate) and No. 16/2017 – Union Territory tax (Rate) all dated 28th June, 2017 and corresponding notifications under the respective State Goods and Services Tax Acts.

4. In order to expedite the processing of the refund applications filed by the UIN entities, the following formats/ documents are hereby specified:

4.1 Refund Checklist: In order to bring in uniformity in the processing of the refund claims, a checklist has been specified in Annexure A. All UIN entities may refer to this checklist while filing the refund claims.

4.2 Certificate: A sample certificate to be submitted by Embassy/ Mission/ Consulate is enclosed as Annexure-B and that to be submitted by United Nations Organizations/ Specified International Organizations is enclosed as Annexure-B-1.

4.3 Undertaking: A sample undertaking to be submitted by Embassy/Mission/Consulate is enclosed as Annexure-C and that to be submitted by United Nations Organizations/Specified International Organizations is enclosed as Annexure-C-1.

4.4 Statement of Invoices: The detailed statement of invoices shall be submitted in the format specified in Annexure D.

5. Prior Permission letter for GST refund for purchase of vehicles: MEA vide letter F. No. D_II/451/12(5)/2017 dated 21.06.2018 has informed that it is mandatory to enclose the copy of ‘Prior Permission Letter’ issued by the Protocol Special Section of MEA at the time of submission of GST refund for purchase of vehicle by the foreign representatives. Accordingly, it is advised that UIN entities must submit the copy of the ‘Prior Permission letter’ and mention the same in the covering letter while applying for GST refund on purchase of vehicles to avoid delay in processing of refunds.

6. Non-availability of refunds to personnel and officials of United Nations and other International organizations: It is hereby clarified that the personnel and officials of United Nations and other International organizations are not eligible to claim refund under Notifications No. 13/2017 – Integrated Tax (Rate), 16/2017-Central Tax (Rate) and No. 16/2017 – Union Territory tax (Rate) all dated 28th June, 2017 and corresponding notifications under the respective State Goods and Services Tax Acts. However, the eligibility of refund for the personnel and officials posted in the Embassy/Mission/Consulate shall be determined based on the principle of reciprocity.

7. Waiver from recording UIN in the invoices for the months of April, 2018 to March, 2019: A one-time waiver is hereby given from recording the UIN on the invoices issued by the suppliers pertaining to the refund claims filed for the quarters from April, 2018 to March, 2019, subject to the condition that the copies of such invoices which are attested by the authorized representative of the UIN entity shall be submitted to the jurisdictional officer.

8. Format of Monthly report: Circular No. 36/10/2018-GST dated 13th March, 2018 provides for a monthly report to be furnished to the Principal Director General of Goods and Services Tax by the 30th of the succeeding month. The report shall now be furnished in a new format as specified in Annexure E.

Annexure A: Checklist for processing UIN refunds

Annexure B: Certificate to be submitted by Mission/ Embassy/ Consulate

Annexure B-I: Format for certificate for United Nations Organizations/ Specified International Organizations)

Annexure C: Format for undertaking for Mission/Embassy/ Consulate

Annexure C-I: Format for undertaking for United Nation Organizations/ Specified International Organizations)

Annexure D: Format for statement of invoices

Annexure E: Format for monthly report

(please refer above attachment for formats of above Annexures)

CBIC Clarifications on Issues relating to Procedure of Refunds to UIN agencies under GST

The CBIC has issued Clarifications on Certain Queries/ Issues relating to Procedure of Refunds to UIN agencies under GST, like manual furnishing of Statement of Invoices, waiver for Mention of UINs on Invoices upto March 2018, etc., as under:

CBIC Circular No. 43/17/2018 GST dt. 13 April, 2018

Subject: Queries regarding processing of refund applications for UIN agencies

1. The Board vide Circular No. 36/10/2017 dated 13th March, 2018 clarified and specified the detailed procedure for UIN refunds. After issuance of the Circular, a number of queries and representations have been received regarding the processing of refund to agencies which have been allotted UINs. In order to clarify some of the issues and to ensure uniformity in the implementation of the provisions of the law across field formations, the Board, in exercise of its powers conferred under section 168 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”) hereby clarifies the following issues:

2. Providing statement of invoices while submitting the refund application: 

2.1. The procedure for filing a refund application has been outlined under rule 95 of the Central Goods and Services Tax Rules,2017 (hereinafter referred to as “the CGST Rules‟) which provides for filing of refund on a quarterly basis in FORM RFD-10 along with a statement of inward invoices in FORM GSTR-11. It has come to the notice of the Board that the print version of FORM GSTR-11 generated by the system does not have invoice-wise details. Therefore, it is clarified that till the system generated FORM GSTR-11 does not have invoice-level details, UIN agencies are requested to manually furnish a statement containing the details of all the invoices on which refund has been claimed, along with refund application.

2.2. Further, the officers are advised not to request for original or hard copy of the invoices unless necessary.

3. No mention of UINs on Invoices: 

3.1. It has been represented that many suppliers did not record the UINs on the invoices of supplies of goods or services to UIN agencies. It is hereby clarified that the recording of UIN on the invoice is a necessary condition under rule 46 of the CGST Rules, 2017. If suppliers / vendors are not recording the UINs, action may be initiated against them under the provisions of the CGST Act, 2017.

3.2. Further, in cases where, UIN has not been recorded on the invoices pertaining to refund claim for the quarters of July – September 2017, October – December 2017 and January – March 2018, a one-time waiver is being given by the Government, subject to the condition that copies of such invoices will be submitted to the jurisdictional officers and will be attested by the authorized representative of the UIN agency. Field officers are advised that the terms of Notification No. 16/2017-Central Tax (Rate) dated 28th June 2017 and corresponding notifications under the Integrated Goods and Services Tax Act, 2017, Union Territory Goods and Services Tax Act, 2017 and respective State Goods and Services Tax Acts should be satisfied while processing such refund claims.

CBEC Guidelines for Processing of GST Refund Applications (UIN Entities)

The CBEC has issued clarifications on the issues relating to procedure for claiming refund of GST paid on inward supply of goods and/ or services, by the entities/ agencies having Unique Identification Number (UIN), as under:

GST Refund Procedure UIN Agencies: CBEC Circular No. 36/10/2018 GST dt. 13 March 2018

Subject: Processing of refund applications for UIN entities

1. The GST Council, in its 23rd meeting held at Guwahati on 10th November 2017, has decided that the entities having Unique Identity Number (UIN) may be given centralized registration at the option of such entities. Further, it was also decided that the Central Government will be responsible for all administrative compliances in respect of such entities.

2. In order to clarify some of the issues and to ensure uniformity of implementation across field formations, the Board, in exercise of its powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”) hereby clarifies the following issues:

3. Status of registration for UINs: 

i. Entities having UINs are given a special status under the CGST Act as these are not covered under the definition of registered person. These entities have been granted UINs to enable them to claim refund of GST paid on inward supply of goods or services or both received by them. Therefore, if any such entity is making supply of goods or services or both in the course or furtherance of business then such entity will need to apply for GSTIN as per the provisions contained in the CGST Act read with the rules made thereunder.

ii. The process for applying for UIN has been outlined under Rule 17 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”). As stated in the said rule, any person covered under clause (a) of sub-section (9) of section 25 of the CGST Act may submit an application electronically in FORM GST REG-13 on the common portal. Therefore, Specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries shall apply for grant of UIN electronically by filling FORM GST REG-13.

iii. Due to delays in making available FORM GST REG-13 on the common portal, an alternative mechanism has been developed. Entities covered under clause (a) of sub-section (9) of Section 25 of the CGST Act may approach the Protocol Division, Ministry of External Affairs in this regard, who will facilitate grant of UINs in coordination with the Central Board of Excise and Customs (CBEC) and GSTN.

iv. It is clarified that the facility of single UIN is optional and an entity may seek more than one UIN.

4. Filing of return by UIN agencies: 

i. The procedure for filing returns by UIN entities is specified under sub-rule (1) of Rule 82 of the CGST Rules. The UIN entity is required to file details of inward supplies in FORM GSTR-11.

ii. It may be noted that return in FORM GSTR-11 is required to be filed only for those tax periods for which refund is being claimed. In other words, if an UIN entity is not claiming refund for a particular period, it need not file return in FORM GSTR-11 for that period.

5. Applying for refund by UIN agencies: 

i. All the entities who have been issued UINs and are notified under Section 55 of the CGST Act will be eligible for refund of inward supply of goods or services in terms of notification No. 16/2017-Central Tax (Rate) dated 28th June 2017 as amended.

ii. It may be noted that the conditions specified under the said notification need to be complied with while applying for refund claims. Further, field officers are hereby instructed to ensure that all the certificates / undertaking etc. as stipulated in the said notification be duly checked while processing the refund claims.

iii. The procedure for filing a refund application has been outlined under Rule 95 of the CGST Rules which provides for filing of refund on quarterly basis in FORM RFD-10 along with a statement of inward invoices in FORM GSTR-11. It is hereby clarified that FORM GSTR-11 along with FORM GST RFD-10 has to be filed separately for each of those quarters for which refund claim is being filed.

iv. Agencies which have been allotted UINs may visit User Manual/ FAQ section on the common portal (www.gst.gov.in) for step by step instructions on how to file FORM GSTR-11 and FORM RFD-10.

v. It is hereby clarified that all the entities claiming refund shall submit the duly filled in print out of FORM RFD-10 to the jurisdictional Central Tax Commissionerate. All refund claims shall be processed and sanctioned by respective Central Tax offices. In order to facilitate processing of refund claims of UIN entities, a nodal officer has been designated in each State details of whom are given in Annexure A. Application for refund claim may be submitted before the designated Central Tax nodal officers in the State in which the UIN has been obtained.

vi. There may be cases where multiple UINs existed for the same entity but were later merged into one single UIN. In such cases, field formations are requested to process refund claims for earlier unmerged UINs also. Hence, the refund application will be made with the single UIN only but invoices of old UINs may be declared in the refund claim, which may be accepted and taken into account while processing the refund claim.

6. Passing of refund order and settlement of funds: 

i. The facility of centralized UIN ensures that irrespective of the type of tax (CGST, SGST, IGST or Cess) and the State where such inward supply of goods or services have been procured, all refunds would be processed by Central authorities only. Therefore, field formations are advised that all refunds are to be processed on merits irrespective of
where and which type of tax is paid on inward supply of goods or services or both by such entities.

ii. A monthly report as prescribed in Annexure B is required to be furnished to the Director General of Goods and Services Tax by the 30th of the succeeding month.

iii. Field officers shall send a copy of the order passed for such refunds to their State counterparts for information purposes only.

CBEC Advisory for Accepting/ Recording of Unique Identity Number (UIN) of Foreign Diplomatic Missions/ UN in Supply Invoice

The CBEC has issued an Advisory for persons Registered under GST to Accept/ Record the Unique Identity Number (UIN) allotted to Foreign Diplomatic Missions/ UN in Supply Invoice(s) properly, so that later on such Consulates/ Missions can smoothly claim refund of GST in due course, as under:

CBEC Press Release dt. 27 April, 2018

Recording of Unique Identity Number of Foreign Diplomatic Missions / UN Organizations on invoices while making supplies

1. Complaints have been received from Foreign Diplomatic Missions / UN Organizations regarding unwillingness of vendors / suppliers / E-commerce websites to record the UIN (Unique Identify Number) while making sales to such Embassies / Missions / Consulates or UN organizations.

2. Unique Identification Number (UIN) is a 15-digit unique number allotted to any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries. First two digits of the UIN denotes State code where such entity is located.

3. It may be noted that supply to Foreign Diplomatic Missions / UN Organizations is like any other Business to Consumer (B2C) supply and will not have any additional impact on the supplier’s tax liability. Recording of UIN while making such supplies by the suppliers will enable Foreign Diplomatic Missions / UN Organizations to claim refund of the taxes paid by them in India. Therefore, it is advised that suppliers should record the UIN of the Embassies/ Missions / Consulates or UN organizations on the tax invoice.

4. It has been noticed many big brands for groceries, clothing, super stores etc. have been denying this facility to Embassies and Consulates. Such organizations / stores are advised to amend their processes / software and enable recording of UIN when insisted upon by a diplomat or an official of a Foreign Diplomatic Missions/ UN Organizations.

CBEC Advisory for Recording UIN in Invoice for Supplies to UN/ Foreign Diplomatic Missions: CBEC Press Release dt. 13 Nov. 2017

Accepting of Unique Identity Number of Foreign Diplomatic Missions / UN Organizations while making sales or supplies

Various representations have been received from Foreign Diplomatic Missions/ UN Organizations regarding unwillingness of the vendors/ suppliers to record the UIN (Unique Identify Number) while making sales to such Missions/ Consulates or UN organizations. It may be noted that sale or supply to Foreign Diplomatic Missions/ UN Organizations is like any other Business to Consumer (B2C) sale and will not have any additional effect on the supplier’s tax liability. Recording of UIN while making such sales will enable Foreign Diplomatic Missions/ UN Organizations to claim refund of the taxes paid by them in India. Therefore, it is advised that under no circumstance any supplier should decline to record the UIN of the diplomat/ official on the tax invoice.

Further, it may also be noted that the diplomats / consulate staff may quote the same UIN as allotted to their Missions/ Consulates or UN organizations while making any purchases.

Unique Identification Number (UIN) is a 15-digit unique number allotted to any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries. First two digits of the UIN denotes State code where the Diplomatic Mission/Consulate/ Embassy is located.

Search functionality for UIN is available on the GST Common Portal in “Search Taxpayer” option. On entering UIN and captcha, details of the Diplomatic Mission/Consulate/ Embassy/ will be available.

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