In usual cases, when the amount paid as GST is more than the GST liability, it creates a situation to claim GST refund. To avoid confusion and provide more clarity on refund process under GST, the process to claim a refund is standardized. This process is online and time lines to claim refund also have been fixed for the same.
In usual cases, when the amount paid as GST is more than the GST liability, it creates a situation to claim GST refund. To avoid confusion and provide more clarity on the refund process under GST, the process to claim a refund is standardized. This process is online and timelines to claim refund also have been fixed for the same.
GST refund can be claimed when the tax paid is excess than assessed.
The GST liability of Ms Parekh’s GST for the month of August is Rs 65,000. Mistakenly, she made a GST payment of Rs 6,50,000. Since, Ms. Parekh has made an excess GST payment of Rs 5,85,000, she claim the amount as GST refund.
Quick Note: The time limit for claiming the refund is 2 years from the date of payment or relevant date (relevant dates differ from case to case basis depending upon situations where refund can be claimed).
A suitable refund mechanism is essential for effective tax administration. When the taxes are paid in excess than assessed either erroneously or mistakenly, refund can be claimed under GST. Few scenarios are given below:
The below are the relevant dates to claim the refund within two years in each of the situation where GST refund can be claimed:
|Reason for claiming GST Refund||Relevant Date|
|Excess payment of GST||Date of tax payment|
|ITC accumulation due to output being tax exempted or nil-rated||Last date of financial year to which the credit belongs|
|Export or deemed export of goods or services||Date of (i) dispatch (ii) loading or (iii) passing the frontier|
|Finalisation of provisional assessment||Date on which tax is adjusted|
Quick Note: In case there is a delay in paying refund beyond 60 days, government will pay interest @ 6% p.a. and if the interest is arising on account of delay for the reason of adjudication, the government has to pay an interest of 9 % p.a. on the refund amount.
The refund application has to be electronically submitted in Form RFD 01 within 2 years from relevant date. The refund application form must be certified by a Chartered Accountant / Cost Accountant, if the amount of refund exceeds Rs 2 lakhs.
The below is the list of standard documents to be filed along with refund claim by applicants making a claim:
In order to process a refund claim, the following procedure must be adhered to:
Quick Note: On filing RFD – 01 Refund, an ARN Receipt is generated in PDF format. Once the inspection of refund application is done satisfactorily, the amount of refund gets credited to the selected bank account.
Quick Note: On the basis of the doctrine of unjust enrichment, Refund will be normally paid in Consumer Welfare Fund, and not paid to the taxable person who has applied for the refund – section 54(5) of CGST Act.
|Form RFD-01||Refund application form|
|Form RFD-02||Auto-generated acknowledgement of application|
|Form RFD-03||Form sent to taxpayer to make corrections in application|
|Form RFD-04||Provisional refund order issued by authorised officer|
|Form RFD-05||Final order issued by authorities|
|Form RFD-06||When refund needs to be adjusted against taxable amount|
|Form RFD-07||Show-cause notice for rejection of refund application|
|Form RFD-08||Payment advice|
|Form RFD-08||Order for interest on delayed payments|
|Form RFD-10||Refund application by UN’s body, consulates or foreign embassies|
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