Refunds Under GST

Allowable Refunds

1. Refund of unutilized input tax credit (ITC) on account of exports without payment of tax.

2. Refund of tax paid on export of services with payment of tax;

3. Refund of unutilized ITC on account of supplies made to SEZ Unit/SEZ Developer without payment of tax.

4. Refund of tax paid on supplies made to SEZ Unit/SEZ Developer with payment of tax.

5. Refund of unutilized ITC on account of accumulation due to inverted tax structure.

6. Refund to supplier of tax paid on deemed export supplies.

7. Refund to recipient of tax paid on deemed export supplies.

8. Refund of excess balance in the electronic cash ledger.

9. Refund of excess payment of tax.

10. Refund of tax paid on intra-State supply which is subsequently held to be inter-State supply and vice versa.

11. Refund on account of assessment/provisional assessment/appeal/any other order.

12. Refund on account of “any other” ground or reason; and

13. Refund, as per section 54 (2) of the CGST Act, of tax paid on inward supplies of goods or services or both by UNO etc. notified under section 55.

Step-by-Step Guide to GST Refund Claims

Here is a step-by-step guide to the GST refund claims process:

Step 1: File GST Returns

Before you can apply for a GST refund, you need to file your GST returns. This means you must have filed all the necessary GST returns for the relevant period of the refund claim. You also need to make sure that you have paid all the taxes due for that period.

Step 2: Apply for Refund

Once you have filed your GST returns, you can apply for a refund. To do this, you need to fill out Form RFD-01, which is available on the GST portal. This form is used to claim a refund of GST paid on exports, inverted duty structure, excess balance in cash ledger, and other scenarios.

Step 3: Supporting Documents

When you apply for a GST refund, you need to attach supporting documents to your application. The documents required vary depending on the type of refund you are claiming. For example, if you are claiming a refund of GST paid on exports, you need to attach shipping bills or bills of export.

Step 4: Verification

Once you have submitted your application for a GST refund, it will be verified by the GST authorities. They may ask for additional documents or information to support your claim. It’s important to respond promptly to any requests for additional information.

Step 5: Refund

If your GST refund claim is approved, the refund amount will be credited to your bank account. You will receive a notice of refund on the GST portal, and the amount will be credited to the bank account mentioned in the refund application.

What Happens After the GST Refund is Applied?

After you apply for a GST refund, there are a few things that happen:

1. Acknowledgment Receipt

Once you have submitted your GST refund application, you will receive an acknowledgment receipt. This receipt confirms that your application has been received by the GST authorities, and it includes a unique reference number.

2. Verification

The GST authorities will verify your GST refund claim to ensure that all the information and supporting documents are correct. They may also ask for additional information or documents to support your claim.

3. Refund

The process is very thorough in itself and once followed properly, then availing refund can become very smooth and hassle free. It will change the face of the long drawn refund process and give a boost to the manufacturing or export industry. Those refunds, which usually took years to pass can now be taken in just 60 days. The strong IT system and forward thinking of the GSTN have enabled this initiative.

This Article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update etc. if any.

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