GST Refund

GST Refund

GST paid is more than the GST liability in a situation of claim GST refund rises. Under GST the procedure of claiming a refund is standardized to evade confusion. The procedure of claim GST refund is online and time limits have also been set for the same. 

Essentials of GST Refund:

  • The Refund provision relating to refund in the GST law help to reorganize and standardize the refund processes.
  • Under GST the procedure of claiming a refund is uniform to avoid confusion, so when the GST paid is more than the GST liability a situation of appealing a GST refund arises.
  • The refund procedure helps simplify the trade through the release of blocked funds for various use such as working capital, expansion, and modernization of existing business. 
  • Once it is identified that there is a case for claim GST refund then one has to file for the claim through GST Refund Form RFD-01. 
  • The form if possible should be prepared by a certified Chartered Accountant and this GST claim needs to be made within 2 years of the “relevant date” of the GST refund application. 
  • There are various cases under which a refund can be claimed like a tax refund to international tourists, a refund in case of taxes paid by the Embassy or UN bodies, a refund at the finalization of provisional assessment, etc.

A refund can be appealed in Goods and Services Tax (GST) in the given Circumstances:

  • Export of Goods or Services comprising Deemed Export.
  • Refund of Unutilized Input Tax Credit.
  • Refund from Manufacturing / Generation/ Production of tax-free supplies.
  • Excess payment due to mistake and inadvertence.
  • Finalization of Provisional Assessment.
  • Refund for Tax payment on transactions by UN bodies, CSD Canteens, Para-military forces canteens, etc.
  • Repayment of pre-deposit in case of Appeal.

How ASC Helps?

  • Assistance in the calculation, review, and submission of the claim to the concerned jurisdiction.
  • Assistance in obtaining clarification from the department wherever possible for the clients.
  • Helping in making responses to departmental queries or audits that may be conducted.
  • Assistance in succeeding follow-up with the GST department that may be needed in order to get the refund.
  • Assistance in filing appeals in case the refund is denied or no action is taken up by the concerned authority.

Frequently Asked Questions

How to claim GST refund? What is the form applicable for filing a GST refund application?

GST refund application should be filed in GST RFD-01. It is an entirely online process and all the relevant documents shall be uploaded online. After filing the refund application, an acknowledgment shall be generated in Form GST RFD-02. Once the application is scrutinized by the department, it will be sanctioned by issuing of sanction order in Form GST RFD-06. Thereafter, a payment order will be issued in Form GST RFD-05 leading to payment of a refund.

How much time does it take to issue a GST refund?

If there are no queries pertaining to your GST refund, then your GST refund application shall be processed and sanctioned within 60 days of filing the application. Therefore, the GST refund time limit is anywhere between 30 days to 60 days.

What is a provisional refund under GST?

Often, GST refund gets delayed due to procedural aspects. As the money is blocked into the system, it creates short-term hardships for the taxpayers. Therefore, the government has introduced the concept of provisional refunds for GST whereby a refund is released by the department temporarily up to 90% before the scrutiny of documents and related records gets completed. Provisional refunds are applicable in the case of zero-rated supplies. That includes exports of goods or services or supplies made to Special Economic Zone Developers or Units. Provisional refunds shall be issued in Form RFD-04 within 7 days after the issue of acknowledgment in Form RFD-02.

What is the time limit for filing a GST refund application online?

A person seeking a refund of GST shall file the GST refund application before the expiry of 2 years from the relevant date as is mentioned in Explanation to Section 54 of the CGST Act.

Is there a minimum threshold amount for claiming a GST refund?

Yes. GST refunds cannot be claimed if the amount of the refund is less than Rs. 1000.

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