Refund of Tax –
Refund includes refund of tax and interest given on:
1.Zero-rated supplies of goods or services or both; or
2.Inputs or input services used in the effecting such zero-rated supplies of goods or services or both; or
3.Supply of goods related as deemed exports; or
4.Refund of not utilized input tax credit at last of any tax period in case the % of output tax is less than the % of input tax.
Conditions for Claiming Refund-
1. refund of tax paid on zero-rated supplies of goods and/or services or on inputs or input services used in making such zero-rated supplies;
2. refund of not utilized input tax credit in Section 54(3);
3. refund of tax paid on a supply which is not given, either completely or partially, and for which invoice has not been generated, or where a refund voucher has been created;
4. refund of tax in pursuance of Section 77;
5. the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the occurrence of such tax and interest to any other individual; or
6. the tax or interest produced by such other class of applicants as the Central or a State Government may, on the recommendation of the Council, by notification, given.
Applying for Claiming Refund
The individual claiming refund has to make an application in Form GST RFD-01.
1.Refund application is to be filed before the expiry of two years from the exact date.
2.But in case of UNO the refund application is required to be made before the expiry of 6 months from the last day of the Quarter in which this supply was received.
Rs. 1000. If the refund amount is less than ` 1,000/-, then no refund can be paid.
Refund of Balance in cash or credit Ledger
The balance of cash or credit after payment of tax, interest, penalty, fee or any other amount
Refund of any not utilized ITC
Refund can only be claimed under below circumstances: –
(a) zero rated supplies made without paying of tax
(b) where the credit has accumulated on account of % of tax on inputs being more than the % of tax on output supplies (other than zero rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council
Provided also that no refund of not utilized input tax credit shall be allowed in cases where the goods exported out of India are subjected to export tax
Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.
Documents to be Given
Below documents are required to be given along with the refund application:
1. Documentary evidence to establish that a refund is because of the applicant, and
2. Documentary evidence to prove that incidence of tax and interest had not been passed on to any other individual.
Exemption – if the refund claimed is less than 2 lacs, then documentary evidence would not be required to be submitted. However, the applicant may file a declaration based on the documentary or different evidence available with him, certifying that the incidence of this tax and interest is not passed on to any other individual.
Provisional sanction of Refund
The proper officer may sanction refund to an individual on a condition that during any period of five years immediately preceding the tax period to which the claim for refund relates, not been prosecuted for any offence under the Act or under any law where the amount of tax evaded exceeds two hundred and fifty lakh rupees. The proper officer, after scrutiny of the claim and the evidence submitted in support thereof and on being prima facie satisfied that the amount claimed as refund is because of the applicant shall make an order in FORM GST RFD-04, sanctioning the amount of refund due to the said applicant on a provisional basis in a period not more than seven days from the date of acknowledgement.
Provisional Refund on Exports
the officer may, in case of any claim for refund on account of zero-rated supply of goods or services or both made by registered individuals, except such category of registered individuals as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, 90%. of the total amount so claimed, leaving the amount of input tax credit provisionally accepted. Such provisional refund will be granted within 10 days of making of application or within 7 days of issuance of acknowledgement of the application.
Refund of the balance 10% will be granted after verifying documents furnished by the applicant.
Time Restriction on Officer to Pass Final Order
The officer shall issue the order within sixty days from the date of receipt of refund application.
Adjust in Refund
The refund due to the applicant can be adjusted towards tax, interest, penalty or any other amount which the applicant has to pay but which remains unpaid under the Act or under any previous law.
Manually Filing of Refund Application –
Refunds can be filed manually and the processing of refund with respect to any notice, reply or order, among others, can also be issued / filed manually. in terms of Rule 97A has been inserted in the CGST Rules, 2017 vide Notification No. 55/2017 – Central Tax dated 15-11-2017. In terms of Rule 97A, any reference to this Chapter (i.e., Chapter X- Refund under CGST Rules) any reference to electronic filing of an application, intimation, reply, declaration, statement or online issuance of a notice, order or certificate on the common portal shall, in respect of that process or procedure, include manual filing of the mentioned application, intimation, reply, declaration, statement or issuance of the given notice, order or certificate in such Forms as appended to these rules.
Applying for Refund in case of Deemed Export
Application for refund in case of deemed export can be filed by:
(a) the recipient of deemed export supplies; or
(b) the supplier of deemed export supplies in cases where the recipient will not avail of input tax credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund
Interest on Refund Sanctioned
If the refund is not sanctioned within 60 days from the receipt of refund application, interest would be paid at a rate not more than 6%.
If refund is made based on the order of appellant authority then interest would be paid at a % of 9% for the period starting from expiry of 60 days from the date of application consequent to the order till the date of actual refund of tax.
Enquire with Certicom Consulting in case of further queries.