When GST is paid in excess or when Input Tax Credits (ITC) have not been utilized, then the person is eligible to claim a GST Refund under Section 54 of the excess tax paid. GST refund can be claimed by filing an online application within the respective time limit. GST council has to work on streamlining the refund process to ensure quick release of the funds so that the taxpayers don’t face issues delaying the process. The GST council is working on standardizing the procedures related to the refund claims under GST. Hence there is a procedure to be followed to claim a refund.
Under what situations you are entitled to GST Refund?
GST refund can be claimed under the following situations:
- Export of goods/commodities or services
- Excess payment of GST by mistake.
- Deemed exports
- Refund of taxes when embassies make purchases
- Supplies to developers and SEZ units
- Refund of accrued input tax credit because of inverted duty structure
- Refund of pre-deposit
- Refund that arises on account of order, judgment, direction or decree of the Appellate Tribunal, Appellate Authority or any court of law
- Refund of taxes when the purchase done by embassies or UN
- Finalization of provisional assessment
- Excess payment because of an error
- Refund due to issuance of refund vouchers for taxes paid on advances against which commodities/ goods and/ or services have not been supplied
- Refunds to overseas or International tourists of GST paid on commodities within the country and carried to overseas location upon their departure from India
- Refund of SGST and CGST paid by considering the supply during inter-state supply commerce or trade
- Refund of accumulated Input Tax Credit due to inverted duty structure other than nil rated or fully exempt supplies
What the time duration to claim or file GST Refund?
Under GST, the duration for GST Refund Claims should be done within 2 years. If the claim is genuine and if refund is granted it will be sanctioned within 60 days of the date of the claim. Also 6% interest is paid under Section 56 for the amount withheld. In case of any further delay on the refund beyond 60 days, an interest of 9% is paid per annum. Refund Process under GST
To claim a refund, you need to follow the below procedure.
- Enter the GSTN portal and fill in the application for the GST claim refund
- You shall receive a notification through an email or SMS which has the acknowledgment number of the claim that has been done online
- The cash and return ledger shall be adjusted and the input tax credit will be deducted automatically
- The GST refund application will be examined by the authorities within 30 days of filing the application
- In case the refund claimed by the individual more than the predetermined amount of refund, a pre-audit process will be conducted prior to the processing of the refund
- The credit of the refund will be processed via online to the applicant’s account through NEFT, RTGS or ECS
- Individuals are allowed to make their applications for refund at the end of each quarter
- If the refund claim is below Rs.1000, no refund shall be processed for the individual
Chartered Account Certificate for GST Refund
If the GST refund claim is below Rs. 2 Lakhs, then a self-declaration of the applicant must be submitted to the effect that the incidence of tax has not been passed to any other person along with other documents listed below. For GST refund claims above Rs. 2 Lakhs, Annexure 2 form GST RFD 01 in the certificate from CA has to be submitted with the list of documents mentioned below.
What are the documents required for the GST refund?
The Reference Number of the claim that’s given by the proper officer or the reference number for the refund of the payment of the amount claimed.
GST Refund for Exports
If the GST refund claim is carried out on behalf of exports or supply to SEZ, the relevant invoice that’s specific to the transaction has to be attached. For supporting the application, a document having the date and number of the shipping and export invoices/bills must also be attached. For GST refunds in the case of exports 90% of the refund is provided within 7 days of filing the claim and the balance GST refund is provided within 60 days. In case of GST refund for export of goods and/or services, the tax receipts providing the details of payment in foreign currency must also be submitted.
GST Refund for supplying goods/service to SEZ
If the GST refund claim is made by the supplier to an SEZ unit, an endorsement from the Proper Officer attaching the invoice of goods and/or services in the SEZ along with the taxation bill. Also, a supporting document for the declaration from the SEZ unit to ensure that they have not availed any input tax credit by the supplier.
GST Refund for Input Tax Credit
If the GST refund claim is for input tax credit, then a document stating the invoice details in line with the GST refund rules and regulation has to be submitted. It’s important to understand that no refund shall be processed for unutilized input tax credit will be allowed for CGST and IGST, in case the accumulated input tax credit has piled up on GST rate of tax on inputs which is above the rate of tax on output supplies.
GST Refund on Account of Order
In case of claim of GST refund on behalf of any order or court or judgment of appellate authority then the reference number of the claim must be provided with other relevant tax invoices.
The GST council must take quicker action on the taxpayer’s grievances. The government has to come up with a robust policy that minimizes the compliance burden on the taxpayers. It is suggested that the GST council must run campaigns to educate more on GST for taxpayers, business and consumers.