GST Refund Services

Timely refund mechanism is essential in tax administration as it facilitate trade through the release of blocked funds for working capital, expansion and modernization of existing business. The provision pertaining to refund contained in the GST law aim to streamline and standardize the refund procedures under GST regime. Under the GST regime there is a standardize form for making any claim for refunds. The claim and sanctioning procedures is primary online and time bound which is a marked departure from the earlier time consuming and cumbersome procedure. Further, provisions relating to refund are more transparent as compared to provisions contained in the earlier indirect tax regime.

Who can Claim GST Refund

Situation leading to refund claims

A claim for refund may arises in the following situations:

1. Export/ supply to SEZ developer /unit on payment of IGST

In case where goods and services are exported or goods and services are supplied to an SEZ developer or unit, on payment of IGST, subject to such conditions, safeguards and procedure as may be prescribed, refund of such IGST paid on goods and services supplied is available.

2. Refund of unutilized ITC

In case of export/supply to SEZ developer/unit without payment of IGST or in case of inverted duty structure, refund of unutilized ITC available.

3. Refund of tax paid on the supply of goods regarded as deemed exports may be claimed.

4. Refund of any balance in the electronic cash ledger after payment of tax, interest, penalty, fees or any other amount payable under GST or rules made under the GST Act maybe claimed.

5. Refund on account of tax paid on a supply which is not provided, either wholly or partially and for which invoice has been issued (tax paid on advance payment).

6. Refund of tax wrongly collected and paid to government. Example- CGST & SGST paid by treating the supply as intra-state supply which is subsequent held as inter-state supply and vice-versa.

7. Refund of IGST paid by tourist leaving India on any supply of goods taken out of India by him.

8. Tax become refundable as reason of judgement, decree, order or direction of the Appellate Authority, Tribunal or any court.

9. On finalization of provisional assessment, if any tax become refundable to taxpayer.

10. Refund of taxes on purchase made by UN bodies or embassies etc.

11. Refund of taxes to the retail outlets established in departure area of an international airport beyond immigration counters making tax free supply to an outgoing international tourist.

Application for refund claim process

Any person claiming refund of any tax, interest, penalty, fees or any other amount paid by him may file an application in form RFD-01 electronically through GST common portal.

However, in case of refund of IGST paid on goods exported out of India, there is no need for filling a separate refund claim in refund application form RFD 01 since the shipping bill filed by the exporter is itself treated as a refund claim.

Shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India.

Further, a registered person claiming refund of any balance in the electronic cash ledger in accordance with the provisions may claim such refund through the return furnished for the relevant tax period.

As per recent amendment the application for refund of balance in the Electronic Cash Ledger is also being filed in form GST RFD -01A. While filing refund application the applicant needs to select the reason of refund as ‘Refund on account of excess balance in cash ledger’. Thereafter the balance amount available in Electronic Cash Ledger is auto-populated in said refund application. The applicant enters the amount of refund to be claimed and Electronic Cash Ledger is debited for the amount claimed as refund.

GST Refund Time Limit

Time limit within which refund claim can be filed

Any person claiming refund of any tax, interest, if any, paid on such tax or any other amount paid by him, may make an application before the expire of 2 years from the ‘Relevant Date’ in prescribed form.

Meaning of ‘Relevant Date’

S.No.	Cases	Relevant Date
1	In case of goods exported out of India (i) Goods are exported by sea or air. (ii) Goods are exported by land. (iii) Goods are exported by post	Date on which the ship or the aircraft in which such goods are loaded leaves India. Date on which such goods pass the frontier. Date of dispatch of goods by the post office concern to a place outside India.
2	In case of service exported outside India (i) The supply of service had been completed prior to the receipt of such payment. (ii) Payment for the service had been receive in advance prior to the date of issue of the invoice.	Date of receipt of payment in convertible foreign exchange or in India rupees wherever permitted by the Reserve Bank of India. Date of issue of invoice.
3	In case of supply of goods regards as deemed exports where a refund of tax paid is available in respect of the goods	Date on which the return relating to such deemed export is furnished.
4	Where tax becomes refundable as a consequence of judgement , decree, order, or direction of the Appellate Authority, Appellate Tribunal	Date of communication of such judgment, decree, order or direction.
5	In case of refund of unutilized ITC on account of inverted duty structure	Due date for furnishing of return for the period in which such claim for refund arises.
6	In the Case where tax is paid provisionally under this act/rules made thereunder.	Date of adjustment of tax after the final assessment thereof.
7	In case of a person, other than the supplier	Date of receipt of goods or service or both by such person.
8	Any other case	Date of payment of tax

GST Refund Procedure

The application shall be accompanied with the following documents:

(a) Such documentary evidence as may be prescribed to establish that a refund is due to the applicant and

(b) Such documentary or other evidence as the applicant may furnished to establish that there is no unjust. Example- the amount of tax and interest, if any paid on such tax or any other amount paid in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such tax and interest had not been passed on to any other person.

In case where refund is on account of	Documentary evidence to be submitted
A judgment, decree, order/direction of Appellate Authority, Appellate Tribunal/any court	Copy of order pass by the proper officer or an Appellate Authority.
Export of Service	Statement in which number and date of invoices and the relevant Bank Realization Certificate or Foreign Inward Remittance Certificate (BRC/FIRC).
Export of goods	A statement containing number and date of shipping bills and export invoices. It is important to note that realization of foreign exchange or Indian Rupees permitted by RBI is one of the condition for export of services whereas in case of export of goods, realization of consideration is not a pre- condition. Hence documentary evidence of BRC/FIRC is not required.
Supply of goods is made to SEZ unit	Statement containing the number and date of invoices along with evidence regarding goods admitted in full for authorized operations as endorse by the specified officer of SEZ. In addition, a declaration to the effect that tax has not been collected from the SEZ unit is also required to be furnished.
Supply of Service made to SEZ unit	Statement containing the number and date of invoices the evidence regarding receipt of services for authorized operations endorse by specified officer of SEZ and details of payment, along with proof thereof, made by recipient to the supplier for authorized operation as per under SEZ Act, 2005.
Deemed Export	Statement containing the number and date of invoices along with an: (i) Acknowledgement by the jurisdictional Tax Officer of the Advance Authorization or Export Promotion Capital Goods (EPCG) Authorization holder, as case maybe or copy of tax invoice under which such supplies have been made by the suppliers, duly signed by recipient EOU that said deemed export supplies have been receive by it (ii) Undertaking by the recipient of deemed export supplies that no ITC on such supplies has been received by him. (iii) Undertaking by recipient of deemed (iii) Undertaking by recipient of deemed export supplies that he shall not claim the refund in respect of such supplies and the supplier may claim the refund.
Refund of any unutilized ITC accumulated on account of inverted duty structure	A statement containing the number and the date of the invoices received and issued during the tax period.
Finalization of provisional assessment	Reference number of the final assessment order and a copy of the said order.
Tax wrongly collected and paid to the government	Statement showing the details of transactions considered as intra trade supply but which is subsequently held to be interstate supply.
Excess payment of Tax	Statement showing the details of the amount of claim on account of excess payment of tax.

Documentary evidence pertaining to passing of incidence of tax

Documentary evidence pertaining to passing of incidence of tax : A declaration needs to be furnished to establish that there is no unjust enrichment un the case of the applicant, in a case where the amount of refund claimed does not exceed ₹ 2 Lakh.

Certificate where refund claim > ₹ 2 Lakh :Where the amount of refund claimed exceeds ₹ 2 lakh, a certificate in annexure 2 of Form GST RFD-01 by a Chartered Accountant or a Cost Accountant to the effect that there is no unjust enrichment in the case of the applicant.

No Certificate No Declaration required : Neither a declaration by the applicant nor a certificate by a Chartered Accountant is required to be furnished in the following cases:

(a) Refund of tax paid on export of goods or services or both or on inputs or input service used in making such exports;

(b) Refund of unutilized ITC in case of zero rated supplies made without payment of tax or on account of inverted duty structure.

(c) Refund of tax paid on a supply which is not provided, either wholly or partially and for which invoice has not been issued, or where a refund voucher has been issued.

(d) Refund of tax on tax paid on a transaction treating it as an intra-State supply, but which is subsequently held to be an interstate supply or vice versa.

(e) The tax or interest borne by such other class of applicant as the Government may on the recommendations of the Council by notification.

Procedure on receipt of refund claim

1. Acknowledgement of refund claim Where the application relates to:

(i) Claim for refund from the electronic cash ledger: An acknowledgment in prescribe form shall be made available to the applicant, clearly indicating the date of filing of the claim for refund.

(ii) Other refund claims:

• → The application shall be forwarded to the proper officer.
• → The proper officer shall within a period of 15 days of filling of the said application, scrutinize the application for its completeness.
• → Where the application is found to be complete in term of rule 89, an acknowledgement in prescribe form shall be made available to the applicant through the common portal electronically.

Deficiencies in refund claim- Issuance of Deficiency Memo:

→ Where any deficiency is noticed, the proper officer shall communicate the deficiency to the applicant in deficiency Memo, requiring him to file A fresh refund application after rectification of such deficiencies.

→ Where deficiencies have been communicated to applicant under the SGST Rules 2017, the same shall also deemed to have been communicated under this rule along with the deficiencies communicated under CGST Act 2017.

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