REFUND UNDER GOODS AND SERVICES TAX (GST) ACT, 2017

Law and Procedure

1. A simplified, time bound and technology driven refund procedure with minimal human interface between the taxpayer and tax authorities has been devised under GST law.
2. A refund claim under GST law may arise due to calculation mistake leading to excess payment exports/deemed export, SEZ supply, judgment of appellate authority or Court, finalization of provisional assessment etc. 
3. Application in FORM GST RFD-01 is required to be filed for claiming refund along with requisite documents.
4. In case of refund of balance of Electronic Cash Register, no application is required and claim can be made through the return furnished.
5. Time limit for filing refund claim is two years from relevant date.
6. In case of export of goods, application for refund shall be filed only after the export manifest or an export report, as the case may be, is delivered under Section 41 of the Customs Act.
7. In respect of supplies to a SEZ unit or developer, the application for refund shall be filed by the supplier of goods after such goods/services have been admitted /received in full n SEZ.
8. In respect of supplies regarded as deemed exports, the application shall be filed by the respondent of deemed export supplies.
9. Acknowledgement of Refund application by the department in prescribed format is mandatory within prescribed time.
10. Provisional refund of 90 per cent has to be granted within 7 days from the date of acknowledgement provided the person claiming refund has not been prosecuted for any offence under GST Law or earlier subsumed laws where the amount of tax evaded exceeds two hundred  and fifty lakh rupees during last five years.
11. Where amount of tax has been recovered from the recipient, it shall be deemed that the incidence of tax has been passed on to the ultimate consumer. In such a case refund, if due, shall be credited to Consumer Welfare Fund.
12. Refund of ITC on account of export or supplies to SE2, will be in terms of a formulae prescribed.
13. A separate formulae has been prescribed for refund arising on account of Inverted duty structure.
14. Interest @ 6% would be available to assessee for delayed refund i.e beyond 60 days from, the date of acknowledgement.

 

Relevant date for computing 2 years period

1. In the case of export of goods by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India. In case of export by land, the date on which such goods pass the frontier. If the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India.
2. In the case of export of services where the supply of services had been completed prior to the receipt of payment, the date of receipt of payment in convertible foreign exchange. In case where payment for the services had been received in advance prior to the date of issue of the invoice, the date of issue of invoices.
3. In the case of deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished.
4. In case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction.
5. In the case of refund of unutilised input tax credit, the end of the financial year in which such claim for refund arises.
6. In the case where tax is paid provisionally, the date of adjustment of tax after the final assessment
7. In the case of a person, other than the supplier, the date of receipt of goods or services or both by such person.
8. In any other case, the date of payment of tax.

Documents to be attached with refund claim

1. Copy of the order passed by the proper officer or an appellate authority or appellate tribunal or court resulting in refund.
2. In the case of export of goods, a statement containing the number and date of shipping bills/ bills of export and invoices.
3. In the case of export of services, a statement containing the number and date of invoices/BRC/FIRC.
4. In the case of supply of goods to SEZ a statement containing the number and date of invoices.
5. In the case of supply of services to SEZ, a statement containing the number and date of invoices and the details of payment.
6. A declaration to the effect that the SEZ unit or developer has not availed of the input tax credit of the tax paid by the supplier of goods or services or both.
7. In the case of deemed export, a statement containing the number and date of invoices along with such other evidence as may be notified.
8. In the case where refund is arising due to inverted tax structure, a statement in Annex 1 of FORM GST RFD-01.
9. A copy of the order in a case where the refund arises on account of finalisation of provisional assessment.
10. A statement showing the details of transactions considered as intra-State supply but which is subsequently held to be inter-State supply.
11. A statement showing the details of the amount of claim on account of excess payment of tax.
12. 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, in a case where the amount of refund claimed does not exceeds two lakh rupees. This declaration is not required in cases covered under Section 54(8) of CGST/SGST Act.
13. A certificate in Annexure 2 of FORM GST RFD-01 issued by a Chartered Accountant or a Cost Accountant 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, in a case where the amount of refund claimed of exceeds two lakh rupees. This certificate is not required in cases covered under Section 54(8) of CGST/SGST Act.