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F. No. CBIC – 20021/04/2021– GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
******
New Delhi, dated the 30th December, 2021
Circular No. 168/24/2021 - GST: Mechanism for filing of refund claim by the taxpayers registered in erstwhile Union Territory of Daman & Diu for period prior to merger with U.T. of Dadra & Nagar Haveli
To,
The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All)
The Principal Directors General / Directors General (All) Madam / Sir,
Subject: Mechanism for filing of refund claim by the taxpayers registered in erstwhile Union Territory of Daman & Diu for period prior to merger with U.T. of Dadra & Nagar Haveli.
New GSTINs with UT Code 26 were created for the taxpayers of erstwhile UT of Daman and Diu w.e.f 1st August, 2020 on merger of the UT of Dadra & Nagar Haveli and UT of Daman & Diu. During the transition, the taxpayers have transferred their ITC balance from their electronic credit ledger of the old Goods and Services Tax Identification Number
(by reversing the balance amount available in electronic credit ledger through the last return in FORM GSTR 3B filed for the old Goods and Services Tax Identification Number prior to merger) to the new Goods and Services Tax Identification Number (by availing the ITC for the said amount in the first return in FORM GSTR 3B filed for the new Goods and Services Tax Identification Number) as per procedure specified under Notification No. 10/2020-CT dated 21.03.2020.
2. Representations have now been received from the field formations and trade/industry that due to transfer of ITC from old GSTIN to new GSTIN, the taxpayers are unable to apply for refund on account of zero-rated supplies and inverted rated structure for the period prior to merger in respect of old Goods and Services Tax Identification Number as they have no ITC available in the electronic credit ledger of the old Goods and Services Tax Identification Number for debiting the amount from electronic credit ledger for claiming refund of unutilized ITC.
Such taxpayers are also unable to apply for such refund claim from the new Goods and Services Tax Identification Number because all the invoices bear the old Goods and Services Tax Identification Number and the system has certain validations which do not allow the refund application to be filed from the new Goods and Services Tax Identification Number for the period prior to the merger.
3. The matter has been examined and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017, hereby prescribes the following procedure in respect of the taxpayers, registered in the erstwhile UT of Daman & Diu and who are unable to file refund claim, due to merger of UT of Dadra & Nagar Haveli and UT of Daman & Diu, to enable such taxpayers to file refund claim for the period prior to merger:
- The application for refund shall be filed under ‘Any other’ category on the Goods and Services Tax portal using their new GSTIN. In the Remarks column of the application, the applicant needs to enter the category in which the refund application otherwise would have been filed. For example, if the applicant wants to claim refund of unutilised ITC on account of export of goods/services, in remarks column, he shall enter ‘Refund of unutilised ITC on account of export of goods/services without payment of tax for the period prior to merger of Daman & Diu with Dadra & Nagar Haveli’. The application shall be accompanied by all the supporting documents which otherwise are required to be submitted with the refund claim.
- At this stage, the applicant is not required to make any debit from the electronic credit ledger.
- On receipt of the claim, the proper officer shall calculate the admissible refund amount as per law. 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-06 and the payment order in FORM GST RFD-05.
- For the categories of refund where debit of ITC is not required, the applicant may apply for refund under the category “Any other” mentioning the reasons in the Remarks column. Such application shall also be accompanied by all the supporting documents which are otherwise required to be submitted along with the refund claim.
4. No refund claim, requiring debit from the electronic credit ledger or where the refund would result in re-credit of the amount sanctioned in the electronic credit ledger, shall be filed using old Goods and Services Tax Identification Number.
5. It is requested that suitable trade notices may be issued to publicize the contents of this circular. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow.
(Sanjay Mangal)
Principal Commissioner
📚 Frequently Asked Questions (FAQs): Circular No. 168/24/2021 - GST
Q1. Why was Circular 168/24/2021-GST issued?
Answer:
It was issued to resolve refund filing issues arising after the merger of Daman & Diu with Dadra & Nagar Haveli.
Many taxpayers had already transferred their ITC to the new GSTIN, making it impossible to file refund claims for the pre-merger period through the old GSTIN. The circular provides a special mechanism to address this procedural problem.
Q2. Who can use this special refund mechanism?
Answer:
Only taxpayers registered in the erstwhile Union Territory of Daman & Diu who migrated to a new GSTIN after the merger.
The mechanism specifically applies where refund claims for the period before the merger could not be filed because of ITC transfer and GST portal validation issues.
Q3. Which GSTIN should be used for filing the refund?
Answer:
The refund application should be filed using the new GSTIN.
The old GSTIN should not be used for refund claims requiring ITC debit or re-credit. This ensures uniform processing after the merger.
Q4. Under which category should the refund application be filed?
Answer:
The application should be filed under "Any Other."
In the Remarks section, taxpayers must clearly mention the actual refund category, such as refund of unutilised ITC on exports for the period before the merger.
Q5. Is ITC debit required while submitting the refund application?
Answer:
No.
At the time of filing, taxpayers are not required to debit their electronic credit ledger. The debit, if necessary, is made later through DRC-03 after the officer verifies the admissibility of the claim.
Q6. What happens after the refund application is filed?
Answer:
The proper officer examines the refund claim.
If the refund is admissible and ITC debit is required, the officer requests the taxpayer to debit the amount through FORM GST DRC-03 before issuing the refund order.
Q7. Which forms are issued after approval?
Answer:
The officer issues:
FORM GST RFD-06 for the refund order.
FORM GST RFD-05 for the payment order.
These are issued after completion of the prescribed procedure.
Q8. Are supporting documents still required?
Answer:
Yes.
The circular only changes the filing mechanism. All supporting documents normally required for the applicable refund category must still accompany the application.
Q9. Does this circular apply to all GST taxpayers?
Answer:
No.
It is a special procedural relaxation applicable only to eligible taxpayers affected by the merger of the two Union Territories and the resulting GSTIN migration.
Q10. Can taxpayers file refund applications under normal refund categories instead?
Answer:
No, where the specific issue covered by this circular exists.
The circular requires filing under "Any Other" with appropriate remarks so that the refund can be processed despite system limitations.
Q11. Does this circular change refund eligibility under GST law?
Answer:
No.
The circular only prescribes a procedural mechanism for filing claims. Refund eligibility continues to be governed by the CGST Act, Rules, and applicable refund provisions.
Q12. What is the biggest benefit of this circular?
Answer:
It prevents genuine taxpayers from losing eligible refunds because of administrative changes during the Union Territory merger.
The circular bridges a system limitation while ensuring that refund verification and legal safeguards remain intact.
Download PDF: Circular No. 168/24/2021 - GST
More Information: https://taxinformation.cbic.gov.in/
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