GST Refund - Refund Procedure under GST, Role of CMA & CA
GST Refund: Refund is a very important term used under GST for the person who is eligible to claim the refund and for the GST Authority.||GST Refund: Refund is a very important term used under GST for the person who is eligible to claim the refund and for the GST Authority.||GST Refund: Refund is a very important term used under GST for the person who is eligible to claim the refund and for the GST Authority.||GST Refund: Refund is a very important term used under GST for the person who is eligible to claim the refund and for the GST Authority.||GST Refund: Refund is a very important term used under GST for the person who is eligible to claim the refund and for the GST Authority.
- Goods or Services are exported or supplied to SEZ developer/unit, with payment of IGST and the refund of the IGST paid shall be claimed as per the provision of Section 16(3)(B) of IGST ACT.
- Unutilised ITC in case of following Cases:
- A) Zero Rated Supplies
- B) Accumulated ITC on account of inverted duty structure.
- Tax paid on the supply of goods regarded as deemed exports claimed by the recipient.
- Refund of any balance in the Electronic Cash Ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made under may be claimed as per provision of Section 46(6) of CGST Act, 2017.
- Refund on account of issuance of Refund Vouchers for the taxes paid on advances against which goods or services have not been supplied, may be claimed as per provision of Section 31(3) of CGST Act,2017.
- Refund of the tax wrongly collected and paid to the government [i.e. CGST & SGST paid by treating a supply as Intra-state and subsequently transaction is held as Inter-state supply and vice versa]
- The IGST paid by tourist leaving India on any supply of goods taken out of India by him as per Section 15 of IGST Act,2017.
- Tax becomes refundable as a consequence of judgement, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court.
- On finalization of provisional assessment, if any tax becomes refundable to the assesses (on a/c of assessed tax on final assessment being less than the tax deposited by the assesses) as per Section 60 of CGST Act,2017.
- Refund of taxes on purchase made by UN bodies or embassies as per Section 54(2) of CGST Act,2017.
Procedure for application to claim Refund:After the introduction of GST from 01/07/2017 on account of the unavailability of electronic refund module on Common Portal the application had to be made manually and gradually temporary mechanism has been introduced in which Form GST RFD-01 was required to be filed from the common portal but the physical copy with evidences were supposed to be submitted to the jurisdiction officer. With effect from 26 Sept, 2019 as per circular no. 125/44/2019-GST, GST Refund process is fully digitalized & the necessary capabilities for making the refund procedure is fully electronic, in which all steps of submission and processing shall be undertaken electronically, have been deployed on the GST Portal. The Refund applications shall be filed in the form GST RFD-01 on the GST Portal along with supporting documents as attachments. List of the supporting documents as per the category of the GST refund are also given in the circular no. 125/44/2019 itself. Refund sanctioned shall be disbursed through the PFMS (Public Financial Management System) after validating the bank detail of the registered person. The following modalities shall be followed for all refund applications filed in FORM GST
Order of Refund [Section 54(5)]
- (a) refund of tax paid on zero rated supplies for export of goods or services or both or on inputs or input services used in making such zero rated supplies for exports
- (b) refund of unutilized input tax credit under sub-section (3);
- (c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued;
- (d) refund of tax in pursuance of section 77 which is Tax wrongfully collected and paid to Central Government or State Government;
- (e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or
- (f) the tax or interest borne by such other class of applicants as the Government may, on the recommendation of the Council, by notification, specify.
- After Deficiency memo is issued the refund application will not be processed further and fresh application need to be filed. ITC will be re credited automatically to the credit ledger.
- If everything is found in order the provision refund sanction order is passed in RFD-04 for 90% of the total refund amount.
- Payment order finally will be issued in RFD-05 and final sanction order shall be issued in RFD-06.
- As per circular No. 125/44/2019 - GST any refund claim for a tax period may be filed only after furnishing all the returns in FORM GSTR-1 and FORM GSTR-3B which were due to be furnished on or before the date on which the refund application is being filed. However, in case of a claim for refund filed by a composition taxpayer, a non-resident taxable person, or an Input Service Distributor (ISD) furnishing of returns in FORM GSTR-1 and FORM GSTR-3B is not required. Instead, the applicant should have furnished returns in FORM GSTR-4(along with FORM GST CMP-08), FORM GSTR-5 or FORM GSTR-6, as the case may be, which were due to be furnished on or before the date on which the refund application is being filed
Role of CMA or CA under Refund:
- A declaration has to be filed by the applicant which is to be certified by Chartered Accountant or Cost Accountant in case the refund claimed exceeds Rs.200000.
No Certificate is required to be furnished in respect of following cases
- Refund of tax paid on export of goods or services or both or on inputs or input services used in making such exports.
- Refund of unutilized ITC in case of Zero-rated supplies or accumulated ITC on A/c of inverted duty structure.
- Refund of tax paid on a supply which is not provided either wholly or partially and for which invoice has not been issued or where refund voucher has been issued
- Refund of tax in pursuance of Section 77 i.e. tax paid on a transaction of Intra-state supply but which is subsequently held to be Inter-state supply or vice-versa.
- The tax or interest borne by such other class of applicants as the government may on the recommendation of the council.
Relief provided due to impact of Covid-19 Pandemic:
- The time limit of two years u/s. 54(1) of CGST Act, 2017 for making the refund application falling during 20th Mar, 2020 to 30th Aug, 2020 has been extended till 31/08/2020.
- In cases where a notice has been issued for rejection of refund claim in full or in part and where the time limit of sixty days for passing the order in terms of Sec. 54(5) read with Section 54(7) of the CGST Act, 2017 falls during 20th Mar, 2020 to 29th June, 2020, then time limit for passing such order has been extended to 15 days from the receipt of the reply to such notice or 30th June, 2020, whichever is later.
- Time limit for filing of LUT for the year 2020-21 is 30/06/2020.
- It has been decided by the government to issue all pending GST and Custom refunds which would provide benefit to around 1 lakh business entities, including MSME. Total refund approximately will be Rs.18000 Crores. Which is a good initiative by the government to provide liquidity to the small businesses in such a crucial time.