GST Refund Process: A Comprehensive Guide

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Payment and refund is part and parcel of any tax system. When the actual tax paid is more than the amount of actual tax liability, the refund is demanded. The case of refund may occur though many instances, wiz. Zero rated exports, supplies to SEZ units and developers, etc.

The process of GST refund is standardised under along with set time limits. Recently, the Government has allowed filing the refund application for multiple months in a single window. Before we dwell into the refund process, let’s first know when refund application can be made with GSTN.

The refund application can be made to claim refund of tax, interest, penalty or fee. Among numerous cases of refund application, few of which are mentioned below:

  • For excessive payment of tax due to mistake or omission
  • Dealer Exports (including deemed export) goods/services under claim of rebate or Refund
  • Supplies to SEZ Units or SEZ developers
  • Accumulation of Input Tax Credit (ITC) in excess of Output Tax Liability for output or exempt or nil-rated
  • Accumulation of unutilised Input Tax Credit (ITC) by reason of higher tax rate on input compared to tax rate output
  • Refund of pre-deposits
  • Refund arising on account of judgement, decree, order or direction of the Appellant Authority, Appellant Tribunal or any Court.
  • Finalization of provisional assessment

Refund Application Process:

The application of refund is made is Form GST RFD-01 electronically on GST portal with required evidentiary documents within prescribed time limit. The taxpayer can also file the refund application for multiple months in single application in form GST RFD-01A. For filing refund claim of multiple tax periods, a restriction provided is that the concerned months shall fall in single financial year.

Time limit: 2 years from relevant date

Normally, the relevant date is date of payment of tax. However, in following scenarios, a different relevant date is prescribed:

Ground of Refund ApplicationRelevant Date
Goods are exported through Air or SeaDate on which the Ship or Aircraft leaves India
 

Goods are exported by a land vehicle

Date on which the goods cross the land

frontier of the country

Goods are exported through postDate of dispatch of goods from the Post Office
Supply includes services which are completed

before the receipt of payment

Payment Receipt Date
Services are performed after the receipt of

Advance

 

Invoice Date

Refund claim made for excess Input Tax

Credit which is unutilised

End of the Financial Year for which the refund

claim is being made

Goods are supplied for deemed exports i.e.

supply to SEZ or 100% EOU

GST return filing date relating to such deemed

Exports

Refund arises due to an order passed in

favour of the appellant

 

Date of such order

Tax was paid based on provisional

assessment and now refund arises

 

Date on which such tax was adjusted

When the person claiming the refund is not the

Supplier

Date on which the goods are received by such

Person

Once the time limit is lapsed, the concerned person cannot claim the refund for the relevant data. This results into blockage of credit.

The evidentiary documents to establish the refund claim are filed in Annexure 1 in Form GST RFD-01:
General Documents:

  • Where the amount of refund does not exceed INR 2 Lakh: A declaration to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person
  • Where the amount of refund exceeds INR 2 Lakh: A Certificate issued by a Chartered Accountant or a cost accountant in Annexure 2 of Form GST RFD-01 to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person

Documents based on ground of refund:

Ground of Refund ApplicationAssociated Documentary Evidence
Refund on account of exports of goodsA statement containing the number and date of shipping bills or bills of export; and

The number and the date of the relevant export invoices

Refund on account of exports of servicesA statement containing the number and date of invoices and the relevant Bank Realisation Certificates or Foreign Inward Remittance Certificates, as the case may be
Refund on account of supply of goods to SEZ Unit or SEZ DeveloperA statement containing the number and date of invoices along with the evidence regarding the endorsement
Refund on account of supply of services to SEZ Unit or SEZ DeveloperA statement containing the number and date of invoices, the evidence regarding the endorsement and the details of payment, along with the proof thereof, made by the recipient to the supplier for authorised operations as defined under the Special Economic Zone Act, 2005
Refund on account of Deemed ExportsA statement containing the number and date of invoices along with such other evidence as may be notified in this behalf
Refund on account of unutilised ITC

(where tax rate on input is higher compared to tax rate of output)

A statement containing the number and the date of the invoices received and issued during a tax period
Refund arises due to an order passed in

favour of the appellant

The reference number and a copy of order passed
Refund on account of finalisation of provisional assessmentThe reference number of the final assessment order and copy of the order passed
Refund on account of excess payment of taxA statement showing the details of the amount of claim

The application will be validated by the system before submission.  If there is any deficiency at filing level, then form GST RFD-03 is generated to make the deficiencies good. Once the application of refund is filed successfully, an acknowledgement in form GST RFD-02 is generated and sent through mail and SMS.

The application will then be scrutinised by the jurisdictional tax officer. The provision of audit is also inserted for processing refund where the amount of refund exceeds the prescribed amount. On completion of scrutiny and/or audit, the authorised officer will pass the appropriate order for refund application. The final refund order is issued in Form GST RFD-06 where the officer is satisfied that the claim amount is refundable. In case of refund claim arising out of exports, the authorised officer can issue provision refund order of 90% of claim in form GST RFD-04 subject to eligibility of the exporter.

About LegalWiz.in:

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If this whole process seems complicated to you, feel free to be in touch with team of professionals at LegalWiz.in. The experts will be available for guidance of any query related to GST registration, GST return filing and refund at support@legalwiz.in.

About the Author:

CS Prachi Prajapati
Company Secretary with a forte in content writing! Started as a trainee, she is now leading as a Content Writer and a Product Developer on technical hand of LegalWiz.in. The author finds her prospect to carve out a valuable position Legal and Secretarial field.

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