Details on Refund of Tax under GST

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.

Time Restriction

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.

Min. Amount

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.

Due date of filing ITR extended till 31st Aug 19 (By CBDT)

The income tax expert has extended the due date for income tax return filing to 31st August from 31st July ’19’. The CBDT took this choice on Tuesday to give a major relief to tax payers who were confronting challenges while filing the income tax return. With the extension of the due date, there is an adequate time for the people to file their returns on time without stressing over any late charges or penalty. Although, as per the income tax department, the expansion applies to all assessees other than corporate tax payers and a couple non-corporate entities.

Taking to Twitter, the Income Tax Department said the due date for filing of ITR for the assessment year 2019-20 was July 31 for specific categories of tax payers on consideration of the matter, the CBDT extended the due date.

Prior to this notice, the CBDT had stretched out the due date for employers to document their TDS returns, i.e., Form 24Q, from May 31, 2019 to June 30, 2019 and consequently due date of issuing Form 16 by the employer was also extended from June 15, 2019 to July 10, 2019. Hence, employees holding back to get their Form 16 to file their ITRs were left with just 21 days to file their tax return by the previous due date of July 31.

In addition, if you don’t file their returns before the due date for example 31st August ’19’, they will be obligated to pay penalty and other procrastination charges by the Authorized dept. Thus, it is important to file your returns regardless of confronting any legal proclamations or notices.

While, if people don’t file income tax returns at the very latest the due date, they would be obligatory  at the rate of 1% for consistently, or part of a month, on the measure of tax remaining unpaid according to section 234A.

A taxpayer is liable to pay late ITR documenting fees of:

According to section 234F if return isn’t filed till the due date but is filed till 31 December then fees of Rs. 5,000 is to be paid and if that return isn’t documented even after 31 December, at that point charges of Rs. 10,000 is to be paid. However, where total pay of the person does not surpass Rs. 5,00,000 at that point charges under section 234F will not surpass Rs. 1,000.

Reach out to Certicom Consulting (Best IT consultants in Bangalore) for any queries.

Advance Ruling Authority under GST: Does it truly solves the taxpayer’s issues?

Since the starting of GST Laws, trade and industry have confronted diverse issues identifying with uploading of returns, benefiting legacy Cenvat credit under TRAN-1 form, different confusions in regards to the generation of e-way bills and numerous other such small issues.

At the point when the Government presented the Advance Ruling Authority under GST, it sought to give a lot more extensive coverage when contrasted with the prior Excise and Service Tax Regime, so as to give an early resolution of the potential tax dispute originating from the trade and industry. First time for any Tax Legislation, an intrigue system was given against the requests gone by the Advance Ruling Authority which was missing under the previous laws and also under the current Income Tax Act.

This appreciated step by the Govt was met with overwhelming help from the trade and industry and therefore, a large number of applications were filed before the Advance Ruling Authority looking for explanation on a variety of tax issues. Shockingly, the Advance Ruling Authorities of different states had not just come up with conflicting decisions on a similar subject yet in addition the majority of the decisions were ruled for the favour of revenue only. Further, the applicants rarely got any help before the Appellate Authority of Advance Ruling too.

Probably, the constitution of this discussion, which comprises just of revenue officials and not having a free judicial part is probably the most compelling motivation for this result. Henceforth, rather than getting relief, the trade and industry began confronting this one of a kind challenge.

This circumstance was additionally worsened by the ongoing order passed by the Bombay High Court on account of JSW Energy Limited wherein it has been held that no appeal can be filed against an order of the Appellate Authority of Advance Rulings on “merits” since no appeal has been given under the GST Act. Without going into the value of this judgment, which appears to have overlooked the well-settled proposition of law that a writ petition is surely viable under the steady gaze of the High Court, the request of the High Court has absolutely made chaos in the Industry.

Seeing this pattern, solid perception in the Trade and Industry is getting work with respect to why one ought to try and approach the Advance Ruling Authority who is probably going to choose the issue against the assessee and when essentially there is no appeal component against the said order. Though if the assessee selects the course of the adjudication, the entryways of the council just as the courts would dependably be available to look for help. Given this, it gives the idea that the entire target of making this forum to give quick goals of issues, rather than experiencing the long-drawn litigation route, is getting crushed.

Thus, it was a real wish and request of the industry that the Government should acquire some change the structure and offer life to this forum. Valuing the need of the industry, the recently chosen government in this Budget attempted to address this issue by presenting the National Appellate Tribunal for Advance Ruling (NATAR) under Section 101A of the CGST Act, 2017. The proposed NATAR will be directed upon by a resigned Judge of the Supreme Court or any High Court and would be joined by two technical individuals representing both the central and the state government.

The composition of the NATAR seems to solve the issue of departmental bias, by presenting a judicial member and furthermore presenting a choice of offer against orders of the Appellate Authority which was already missing under the GST Laws. However, the wording of proposed Section 101B of CGST Act recommends that an appeal before NATAR would lie just in cases where the views taken either by the individuals from Appellate Authority of Advance Ruling established in a similar state or in different states are conflicting.

Though this new proposal by the Government seems to give help in certain perspectives for example at the point when there are opposing perspectives from both of the individuals from a similar Bench or among the co-ordinate Benches of different states. However, there is no help given against the order of the AAAR if the ruling goes against the assessee. So, the NATAR would have a constrained utility and this takes the taxpayer back to square one.

According to the pattern of the Advance Authority Rulings up to this point, it has been seen that two co-ordinate seats of the Appellate Authority once in a while contrast in their perspectives with regards to a solitary issue. Additionally, a circumstance wherein the individuals from a similar seat of the Appellate Authority (who are both departmental officials) contrast in their conclusions, is likewise uncommon. In this manner, the NATAR will be restricted to tending to uncommon circumstances wherein clashing perspectives have been taken by at least two Appellate Authorities (of various states) or two individuals from the equivalent Appellate Authority Bench. Along these lines, in spite of the presentation of NATAR, adequately there is still no investigative gathering accessible to the assessee having an unfriendly request of the AAAR.

This issue may be fathomed if the NATAR is given more extensive forces to mediate on “any” request gone by the Appellate Authority. Consequently while passing the Bill, the Government should roll out appropriate improvements in the Bill to give the eagerly awaited alleviation to the Industry.

In summation, the presentation of the NATAR by the administration just explains the issue of the assessee superficially. In any case, the main problem of having an effectual redrafting cure against the requests of the AAR still evades the citizens.

For detailed info, contact Certicom Consulting.