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GST Refund

GST REFUND

Refunds of GST

Refund refers to an amount that is due to the taxpayer from the tax administration.

According to section 54 of the CGST Act, 2017, any Business entity claiming refund of any tax and interest, if any, paid under GST Act, on such tax and/or interest paid by him, can make an application before the local jurisdictional authorities before the expiry of two years from the relevant date. If there is any balance available in the electronic cash ledger or electronic credit ledger they can claim such refund in the return furnished under section 39. A specialized agency or organization which is defined under the act such as the United Nations Organisation (UNO) or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries or any other person or class of persons, as notified under Section 55 under GST Act, they are entitled to a refund of GST paid by them (e.g Tax paid on inward supplies of goods or services or both), may make an application for such refund, in such form and manner as may be prescribed under GST Act, before the expiry of six months from the last day of the quarter in which such supply was received. However, the time limit has been extended vide Notification No. 20/2018-C.T., dated 28-3-2018, in the exercise of the powers conferred by section 148 of the said Act, the Central Government, has allowed the persons notified under Section 55 to file refund application before the expiry of 18 months from the last date of the quarter in which such supply was received.

TYPE of GST Refund

  • Excess payment of tax due to mistake or inadvertence
  • Excess balance in Electronic Cash Ledger
  • Export with payment of IGST or under Bond/ LUT
  • Supplies made to SEZ unit/developer on payment of IGST or under Bond/LUT
  • Inverted duty structure
  • Deemed Exports
  • Persons holding UIN
  • Miscellaneous refunds

Related Services

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https://taxmetrica.com/annual-filling-of-company-and-llp/

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FAQ

A claim for refund may arise on account of-

  1. Export of Goods or services on payment of tax
  2. Supply of goods or services to SEZs units and developers on payment of tax
  3. Export of Goods or services under Bond/Letter of Undertaking, without payment of tax
  1. Supply of goods or services to SEZs units and developers under Bond/Letter of Undertaking, without payment of tax
  1. Deemed Exports (refund available to both supplier and recipient)
  2. Refund of taxes on purchase made by UN Agencies, Embassies, etc
  3. Refund arising on account of judgment, decree, order, or direction of the Appellate Authority, Appellate Tribunal, or any court
  1. Refund of accumulated Input Tax Credit on account of inverted duty structure
  2. Finalization of provisional assessment

No. Section 54(6) of CGST Act provides for grant of provisional refund of 90% of the total refund claim, in case the claim relates to refund arising on account of zero rated supplies. Thus only refund claims where refund arises on account of zero rated supply will be entitled to provisional refund.

In terms of Section 16(1) of IGST Act, following supplies are considered as zero rated (a) export of goods or services or both; or

(b) Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.

The facility of export under LUT is available to all exporters in terms of notification No. 37/2017- Central Tax dated 4th October, 2017, except to those who have been prosecuted for any offence under the CGST Act or the IGST Act or any of the existing laws in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees. Para 2(d) of the Circular No. 8/8/2017-GST dated 4th October, 2017, mentions that a person intending to export under LUT is required to give a self-declaration at the time of submission of LUT that he has not been prosecuted. Persons who are not eligible to export under LUT are required to export under bond/bank guarantee

The provisional refund has to be sanctioned within 7 days from date of acknowledgement.

No. Refund of accumulated ITC is given based on a formula which uses the phrase ‘Net ITC’ and defines the same as “input tax credit availed on inputs and input services during the relevant period other than the input tax credit availed for which refund is claimed under sub rules (4A) or (4B) or both”. Since the transitional credit pertains to duties and taxes paid under the existing laws viz., under Central Excise Act, 1944 and Chapter V of the Finance Act, 1994, the same cannot be said to have been availed during the relevant period and thus, cannot be treated as part of ‘Net ITC’.

Rule 90 (3) of the CGST Rules provides for communication in FORM GST RFD-03 (deficiency memo) where deficiencies are noticed. The said sub-rule also provides that once the deficiency memo has been issued, the claimant is required to file a fresh refund application after the rectification of the deficiencies.

 The following documents will have to be submitted :

> Copy of FORM RFD-01A filed on common portal

> Copy of ARN

> Copy of Statement 3A of FORM RFD-01A generated on common portal

> Copy of Statement 3 of FORM RFD-01A

> Printout of GSTR-2A and in cases where invoice details are not reflected in the GSTR-2A, the copy of Invoices w.r.t. input and input services. (Refer Circular No. 59/33/2018-GST dated 04th September 2018)

> BRC/FIRC for export of services

> Undertaking / Declaration in FORM RFD-01A

The following documents will have to be submitted

> Copy of FORM RFD-01A filed on common portal > Copy of ARN

> Copy of Statement 2 of FORM RFD-01A generated on common portal

> Printout of GSTR-2A and in cases where invoice details are not reflected in the GSTR-2A, the copy of Invoices w.r.t. input and input services and capital goods (Refer Circular No. 59/33/2018-GST dated 04th September 2018)

> BRC/FIRC for export of services.

> Undertaking / Declaration in FORM RFD-01A

No. Refund claims of taxes paid under existing laws have to be dealt with as per the provisions of existing laws only.