Important Keyword: Circular 166/22/2021-GST, GST refund clarification, Electronic cash ledger refund, GST excess cash ledger refund, TDS refund under GST, TCS refund under GST, Deemed export refund GST, Relevant date for GST refund, Rule 89 GST refund, Section 54 CGST Act, GST refund FAQs, Finodha GST Guide,
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F. No. CBIC-20021/4/2021-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
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New Delhi, Dated the 17th Nov, 2021
Circular No. 166/22/2021 - GST: Circular on Clarification on refund related issues
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/ Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All) Madam/Sir,
Various representations have been received from taxpayers and other stakeholders seeking clarification in respect of certain issues relating to refund. The issues have been examined. In order to ensure uniformity in the implementation of the provisions of the law across field formations, the Board, in exercise of its powers conferred by section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies each of these issues as under:
| S. No. | Issue | Clarification |
| 1. | Whether the provisions of sub- section (1) of section 54 of the CGST Act regarding time period, within which an application for refund can be filed, would be applicable in cases of refund of excess balance in electronic cash ledger? | No, the provisions of sub-section (1) of section 54 of the CGST Act regarding time period, within which an application for refund can be filed,would not be applicable in cases of refund of excess balance in electronic cash ledger. |
| 2. | Whether certification/ declaration under Rule 89(2)(l) or 89(2)(m) of CGST Rules, 2017 is required to be furnished along with the application for refund of excess balance in electronic cash ledger? | No, furnishing of certification/ declaration under Rule 89(2)(l) or 89(2)(m) of the Central Goods and Services Tax Rules, 2017 for not passing the incidence of tax to any other person is not required in cases of refund of excess balance in electronic cash ledger as unjust enrichment clause is not applicable in such cases. |
| Whether refund of TDS/TCS deposited in electronic cash ledger under the provisions of section 51 /52 of the CGST Act can be refunded as excess balancein cash ledger? | The amount deducted/collected as TDS/TCS by TDS/ TCS diductors under the provisions of section 51 /52 of the Central Goods and Services Tax Act, as the case may be, and credited to electronic cash ledger of the registered person, is equivalent to cash deposited in electronic cash ledger. It is not mandatory for the registered person to utilize the TDS/TCS amount credited to his electronic cash ledger only for the purpose for discharging tax liability. The registered person is at full liberty to discharge his tax liability in respect of the supplies made by him during a tax period, either through debit in electronic credit ledger or through debit in electronic cash ledger, as per his choice and availability of balance in the said ledgers. Any amount, which remains unutilized in electronic cash ledger, after discharge of tax dues and other dues payable under CGST Act and rules made thereunder, can be refunded to the registered person as excess balance in electronic cash ledger in accordance with the proviso to sub-section (1) of section 54, read with sub-section (6) of section 49 of Central Goods and Services Tax Act. | |
| Whether relevant date for the refund of tax paid on supplies regarded as deemed export by recipient is to be determined as per clause (b) of Explanation (2) under section 54 of Central Goods and Services Tax Act and if so, whether the date of return filed by the supplier or date of return filed by the recipient will be relevant for the purpose of determining relevant date for such refunds? | Clause (b) of Explanation (2) under Section 54 of Central Goods and Services Tax Act reads as under: “(b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished;” On perusal of the above, it is clear that clause (b) of Explanation (2) under section 54 of the Central Goods and Services Tax Act is applicable for determining relevant date in respect of refund of amount of tax paid on the supply of goods regarded as deemed exports, irrespective of the fact whether the refund claim is filed by the supplier or by the recipient. Further, as the tax on the supply of goods, regarded as deemed export, would be paid by the supplier in his return, therefore, the relevant date for purpose of filing of refund claim for refund of tax paid on such supplies would be the date of filing of return, related to such supplies, by the supplier. |
2. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
3. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board. Hindi version will follow.
(Sanjay Mangal)
Principal Commissioner
📚 Frequently Asked Questions (FAQs): Circular No. 166/22/2021 - GST
Q1. What is Circular 166/22/2021-GST about?
Answer:
Circular 166/22/2021-GST clarifies several important GST refund issues relating to excess electronic cash ledger balances, TDS/TCS refunds, unjust enrichment declarations, and deemed export refund timelines.
It aims to ensure uniform implementation of refund provisions across all GST authorities.
Q2. Is there a time limit for claiming refund of excess electronic cash ledger balance?
Answer:
No.
The circular specifically clarifies that the limitation period prescribed under Section 54(1) does not apply to refund claims relating to excess balance available in the electronic cash ledger.
Q3. Is an unjust enrichment certificate required for cash ledger refunds?
Answer:
No.
Declarations or certificates under Rule 89(2)(l) or Rule 89(2)(m) are not required because the principle of unjust enrichment does not apply to refunds of excess electronic cash ledger balances.
Q4. Can TDS balance in the electronic cash ledger be refunded?
Answer:
Yes.
If the TDS amount remains unutilised after payment of GST liabilities and other dues, the taxpayer can claim a refund of the remaining balance in accordance with the CGST Act.
Q5. Can TCS balance also be refunded?
Answer:
Yes.
The same principle applies to TCS credited under Section 52. Any unutilised balance remaining in the electronic cash ledger after clearing dues can be claimed as a refund.
Q6. Can taxpayers use TDS/TCS balance only for paying GST?
Answer:
No.
The circular clarifies that taxpayers are free to utilise TDS/TCS balances for tax payment or claim a refund of any remaining balance after discharging all liabilities.
Q7. What is the relevant date for deemed export refund claims?
Answer:
The relevant date is the date on which the supplier files the GST return relating to the deemed export supplies.
This remains the relevant date even if the refund application is filed by the recipient.
Q8. Does it matter whether the supplier or recipient files the deemed export refund?
Answer:
No.
The circular clarifies that the relevant date remains linked to the supplier's return filing irrespective of who files the refund claim.
Q9. Does this circular introduce any new refund provisions?
Answer:
No.
It only clarifies existing legal provisions and removes ambiguity in the interpretation of refund-related rules under the GST law.
Q10. Why is this circular important for businesses?
Answer:
It simplifies refund procedures, reduces unnecessary documentation, and provides certainty regarding important refund provisions.
Businesses filing GST refunds can benefit from these clarifications by avoiding procedural mistakes and unnecessary disputes.
Download PDF: Circular No. 166/22/2021 - GST
More Information: https://taxinformation.cbic.gov.in/
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