This appeal has been filed under Section 107 of the Central Goods and Services Tax Act, 2017 by M/s. Stone India, B-30, Behind Goverdhan Bari, Khatipura Road, Jaipur-302012 (hereinafter also referred to as “the appellant”) against the Order-in-Original No. 100/GST/ITC/Stone/2018-19, dated 27-3-2019 (hereinafter called as the “impugned order”) passed by the Assistant Commissioner, Central Goods & Services Tax Division-B, Jaipur (hereinafter called as the “adjudicating authority”).

2. Brief facts of the case :

2.1 The appellant having GSTIN No. 08AFKPR6817H1ZZ has filed application for refund claim of ₹ 22,27,497/- for the period of October to December, 2017 under Section 54 of the Act on account of unutilized ITC on export of Goods and Services without payment of Integrated Tax. The refund claim rejected by the adjudicating authority on the ground that “As per GSTR-3B Outward Zero-rated supplies are Zero”.

3. Being aggrieved with the impugned order the appellant has filed the appeal on the following grounds which may be summarized as under :-

• that The Learned Assistant Commissioner has erred in rejecting the amount of Refund of ₹ 22,27,497/- for the period from October, 2017 to December, 2017.
• that there is no dispute about the fact that the appellant have exported the goods without payment of Integrated Tax and the appellant is eligible for refund of accumulated input tax credit as per Section 54 of the CGST Act, 2017.
• that further, there is no dispute about the facts that the appellant have filed the refund application in prescribed manner and with proper documents.
• that further also there is no dispute about the facts that the appellant had filed GSTR-1 return properly.
• that dispute is only that the appellant had shown export sales in column 3.1(c) “Other Outward Supplies (Nil rated, exempted)” instead of column 3.1(b) “Outward taxable supplies (Zero-Rated)”.
• that the Learned Assistant Commissioner has taken the basis of sub­section (9) of Section 39 of CGST Act, 2017, wherein it was mentioned any clerical error noticed after filing the return, “same should be corrected in the month when such error or omission noticed subject to payment of interest under this Act”.
• that in this connection, it is submitted that there was not, any short declaration of outward supplies, on which interest to be paid. Further, it is submitted that system does not allow filling Negative Figures and if the appellant fills the correct figure in any subsequent month, in that case turnover of the GSTR-3B and GSTR-1 and books of account never match. Therefore, the appellant not corrected the error.
• that further, it is submitted that Circular No. 7/7/2017-GST, dated 1-9-2017 was issued by department, wherein at Para 6 it was clarified that if there is any error/omission/rectification same may be done while filing GST-1. For ready reference Para 6 of Circular No. 7/7/2017-GST, dated 1-9-2017 reproduced hereinafter :

Correction of erroneous details furnished in FORM GSTR-3B :

In case the registered person intends to amend any details furnished in FORM GSTR-3B, it may be done in the FORM GSTR-1 or FORM GSTR-2, as the case may be. For example, while preparing and furnishing the details in FORM GSTR-1, if the outward supplies have been under reported or excess reported in FORM GSTR-3B, the same may be correctly reported in the FORM GSTR-1. Similarly, if the details of inward supplies or the eligible ITC have been reported less or more than what they should have been, the same may be reported correctly in the FORM GSTR-2. This will get reflected in the revised output tax liability or eligible ITC, as the case may be, of the registered person. The details furnished in FORM GSTR-1 and FORM GSTR-2 will be auto-populated and reflected in the return in FORM GSTR-3 for that particular month.

In the above circular it was clearly mentioned that if there is any error/omission, same can be rectified in the GSTR-1 return. In the present case the appellant rectifies the error in GSTR-1 return as per circular. Therefore, the appellant correctly claim the refund and eligible for refund.

4. Personal Hearing in the case was held on 25-2-2020. Shri Tej Narayan Saini, Chartered Accountant appeared on behalf of the appellant. He reiterated the submissions made in their grounds of appeal and explained the case in details. He requested that their case be decided on the basis of the documents.

5. I have carefully gone through the case records and submissions made in the appeal memorandum as well as oral submission made at the time of personal hearing held on 25-2-2020.

6. I find that the appellant is engaged in the business of export of goods i.e. Marble, Traverine, Ecaussine and other Monumental or Building Stone have exported the goods without payment of Integrated Tax against Letter of Undertaking, therefore, the input tax credit on inward supplies has accumulated. Accordingly, the appellant has claimed the refund under Section 54(3) of the CGST Act, 2017 of unutilized input tax credit for the period October, 2017 to December, 2017 amounting to ₹ 22,27,497/-. I observed that the adjudicating authority has rejected the refund claim filed by the appellant on the ground that the appellant had shown in return GSTR-3B the turnover of the zero-rated supply as Zero i.e. “outward Zero-rated supplies are Zero” and the appellant had not corrected in subsequent returns. In this regard, the contention of the appellant is that due to clerical error they have reported their turnover in 3.1(c) Nil rated instead of Zero-rated turnover 3.1(b) in GSTR-3B. The appellant in their defence has stated that there is no dispute about the facts that they had filed GSTR-1 return properly.

As per Section 54(10) of the CGST Act, 2017 – Where any refund is due under sub-section (3) to a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which has not been stayed by any Court, Tribunal or Appellate Authority by the specified date, the proper officer may –

(a)     withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be;

(b)     deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law.

Further as per Section 39(9) of the CGST Act, 2017 – Subject to the provisions of Sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars [in such form and manner as may be prescribed], subject to payment of interest under this Act.

Further as per Para 3 of Circular No. 26/26/2017-GST, dated 29th December, 2017, has also clarified on the procedure of rectification of errors made while filing their FORM GSTR-3B. In this regard, Circular No. 7/7/2017-GST, dated 1st September, 2017 [2017 (4) G.S.T.L. C23] was issued which clarified that errors committed while filing FORM GSTR-3B may be rectified while filing FORM GSTR-1 and FORM GSTR-2 of the same month. Further, in the said circular, it was clarified that the system will automatically reconcile the data submitted in FORM GSTR-3B with FORM GSTR-1 and FORM GSTR-2, and the variations if any will either be offset against output tax liability or added to the output tax liability of the subsequent months of the registered person. But I find that no such report/document were furnished by the appellant regarding reconciliation of the data.

7. I find that the appellant has committed an error in GSTR-3B by not furnishing the export value/sale figure in proper column i.e. 3.1(b) outward taxable supplies (Zero-rated) the export value/sale figures have been furnished in wrong column i.e. 3.1(c) i.e. other outward taxable supplies (Nil rated, exempted) due to that refund claim was rejected. The appellant simply stated that they had filed GSTR-1 properly. Further, I find that the appellant in their defence submission has not discussed/elaborated much about the amendment/correction/ rectification has been done in GSTR-1. I find that the appellant did not file any corrected/modified GSTR-1 return of subsequent month for which the appellant was required to do. If the appellant has committed an error while submitting FORM GSTR-3B, the steps should have been taken to rectify the same. The corresponding column in the table provides the step to be followed by the appellant to rectify such error.

8. Keeping in view of the above legal provision, the appellant was required to rectify such omission or incorrect particulars in the subsequent return to be furnished for the month or quarter during which such omission or incorrect particulars are occurred. Thus I did not find force in the contention of appellant. Accordingly I reject the appeal filed by the appellant