Till the presentation of GST into the Indirect Taxation System, the happening of blunders in the filing methods has been a normal situation. Among these situations, one such situation that has been of most extreme worry for the Taxpayers is incorrect Nil GST Refund application, wherein the taxpayer had a real refund guarantee for the given time frame yet no choice of re-filing was accessible.
Understanding real hardship to taxpayers, CBIC has given a Circular No. 110/29/2019 – GST dated third October 2019, wherein it gave an alternative to re-file refund application if taxpayer has accidentally filed NIL GST refund application.
What Is Incorrect NIL GST Refund Application?
While filing refund application GST RFD-01/1A for a particular classification and period, the enlisted individual is shown a message through a popup box to file NIL refund for the given time frame. Also, with the absence of data/information about such option, taxpayers frequently incidentally file a NIL refund application in GST RFD-01/01A for the period during which they were really qualified for refund. Such filings are considered as incorrect NIL GST refund. To add more to the taxpayer’s predicament, when an application is filed on the GST portal, the choice to re-file such application isn’t available.
Along these lines, upon demands through different representations, the board, upon definite examination of the issue, has chosen to enable such taxpayers to re-file the application, just for the particular time and under that particular category for which the incorrect case was filed.
But, while settling the issue, so as to guarantee the validity of the case, the board has set down two conditions to be fulfilled by a taxpayer, before he can apply for the refund.
Conditions For Refiling Accidental NIL GST Refund Application
CBIC is explained vide circular that if an enlisted individual has filed “NIL” refund application for a period under a specific category then he may re-file for a similar period under same classification just in the case that he fulfills below 2 conditions:
Condition-1: Such individual has already filed a NIL refund application for such period.
Condition-2*: Registered individual has not filed refund application under such category during any consequent period.
* Condition-2 will apply for refund claims falling under below categories:
- Refund of unutilized input tax credit (ITC) in case of exports without pay of tax;
- Refund of unutilized ITC if there should be an occurrence of provisions made to SEZ Unit/SEZ Developer without payment of tax;
- Refund of unutilized ITC by virtue of accumulation because of modified tax structure;
How To Re-File Refund Application?
If the given taxpayer fulfills the previously mentioned conditions, he is qualified to refile for his refund as below:
So as to re-file the Refund application, the taxpayer will be required to file the application under “Some other” category rather than NIL for example the category under which the original “NIL” GST RFD-01/01A was filed.
The filed GST RFD-01/01A ought to relate to a similar period for which NIL refund application was filed.
The application will be accompanied with all supporting records, which is generally required to guarantee a refund.
Methodology Of Granting Refund
Once the approved office gets the application for a refund, he is required to ascertain the permissible amount according to relevant arrangements given in para 3 of Circular No.59/33/2018-GST dated 04.09.2018 (wherever applicable).
Upon detailed examination of the application, if the approved official acknowledges the entire or any piece of the amount asserted as payable for refund, in such case he will request the taxpayer in writing to charge such amount from his electronic credit record through FORM GST DRC-03.
Once the evidence of such debit is received by the best official, he will issue the refund and payment order in form GST RFD-06 and form GST RFD-05, respectively.
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