In order to implement decisions taken by the GST Council in its 35th meeting, multiple notifications, circulars, and orders have been issued by the CBIC such as extending the due date for first annual return, filing of TDS return, filing of form ITC-04 for the goods sent to or received back from a job worker, filing of GSTR-1 (statement for the outward supplies) for monthly as well as quarterly filers, GSTR-3B (for making the payment of taxes) etc. Apart from this and keeping in mind the technical difficulties faced by the taxpayers the CBIC has also clarified various practical aspects such as treatment of secondary or post-sales discounts under GST, treatment or processing of refund applications which are wrongly mapped on the portal, applicability of GST on additional/ penal interest, determination of place of supply in special cases which are discussed as follows.

1. Applicability of GST on additional/ penal interest

 [Circular No. 102/21/2019-GST]

The CBIC has clarified that any interest (or late fee or penalty) for delayed payment of any consideration charged by the supplier shall be included in the value of supply for the payment of GST. The interest component shall be considered for valuation purpose even if a separate invoice has been issued for extending the credit facility. However, if any third party is involved like any bank or any other person, other than the supplier himself, who extends credit facility, due to which transaction between supplier and recipient is executed then in such case the interest paid by the recipient would not be subject to GST as it gets covered by exemption allowed under Notification No. 12/2017-Central Tax (Rate), dated 28-06-2017.


2. Treatment of processing of refund applications which are wrongly mapped on the portal

[Circular No. 104/23/2019-GST]

The CBIC has issued a circular to clarify the doubts raised in respect of processing the refund applications submitted by taxpayers in Form GST RFD-01A which have been electronically transferred to the wrong tax authority. Where reassignment of refund applications to the correct jurisdictional tax authority is not possible on the common portal, the processing of refund claims should not be held up, rather it should be processed by the tax authorities to whom refund applications have been electronically transferred by the common portal.    

After processing of refund application, the refund processing authority may inform on the common portal about the incorrect mapping with a request to update it. This will ensure that all the subsequent refund applications are sent to correct jurisdictional tax authority.

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