Generally, when the GST paid is more than the GST liability, the circumstances of claiming a GST refund arises. Under GST the method of claiming a refund is standardized to avoid confusion.The process is on-line and time-bar has been set.
As per Section 54 following types of refund is allowed:
Refund of IGST paid on export of goods and services.
Refund of IGST paid on sale to SEZ unit and SEZ developer.
Refund of Excess tax, interest or any other amount paid.
Refund of any balance in electronic Cash ledger after payment in accordance with the provision of section 49(6).
Refund of tax paid on inward supply of goods or services by United Nations Organization or any Multilateral Financial institution or other notified organisations.
Refund of Unutilised input tax credit in case of export of goods or services.No refund if goods subject to export duty.No refund if supplier avail drawback in respect of central tax or claim refund of IGST paid.
Refund of Unutilised input tax credit in case of supply to SEZ unit or SEZ developer.
Refund of Unutilised input tax credit in case of inverted duty structure.
Refund of Tax paid on advance but invoice has not been issued and refund voucher has been issued.
Refund of tax paid under the wrong head of tax, then refund can be claimed of the tax wrongly paid u/s 77 of CGST act.
Refund of balance amount of advance tax deposited by a casual taxable person or a non-resident taxable person.
Refund of tax paid by the supplier on supply of goods regarded as deemed export.
Refund of tax on inward supply paid by the recipient of goods regarded as deemed export.
Refund of IGST paid on supply of goods to tourist leaving India.
In case of refund as mentioned in point no. 5 of above, refund can be applied within 6 months from the last day of quarter in which such supply was received.
In any other case refund can be applied within 2 year from the relevant date.
Relevant date is different in every case which is mentioned in Explanation 2 to section 54,which are as follows:
For Export of goods by ship or aircraft, from the date on which ship or the aircraft leaves from India.
For Export of goods by land, date on which such goods pass the frontier.
For Export of goods by post, date of dispatch by the post office.
For Deemed export, date on which related return furnished.
For Export of service, date of receipt of amount, where service has been completed or date of invoice, where amount received in advance.
For refund of Unutilised input tax credit u/s 54(3), the end of the financial year in which such claim for refund arises.
For refund due to any order, the date of communication of the order.
For refund claimed by the recipient, date of receipt of goods or services.
For tax paid provisionally, date of adjustment of tax after the final assessment
Let’s take a case in point of excess tax payment done.
Mr. A’s GST liability for the month of September is Rs 50,000. But by mistake, Mr.A paid the GST amounting to Rs. 5,00,000.
Now, as Mr.A has Paid excess GST payment of Rs. 4.5 lakhs which can be claimed as a refund by him. The Prescribed time-limit for claiming the refund is Two (2) years from the date of payment.
The time limit for claiming a refund is Two(2) years from the relevant date.
The relevant date is different in every case.
Here are the relevant dates for some cases –
|Sr.No,||Reason for claiming GST refunds||Relevant date|
|1.||Excess GST Payment||
From the date of payment
|2.||Export or deemed export of goods or services||
Date of despatch/loading/passing the frontier
ITC accumulates as output is tax-exempt or nil-rated
|Last date of the financial year to which the credit belongs|
|4.||Finalization of provisional assessment||The date on which tax is adjusted|
Also, if a refund is paid with a delay interest of 24%p.a.is payable by the government.
6. How to claim GST refund?
The refund application has to be made in Form RFD-01 (to be certified by a Chartered Accountant) within a period of 2 years from the “relevant date.”
This relevant date is different for different scenarios.
When the goods are exported through air or sea, the relevant date shall be the date on which such ship or aircraft leaves India.
When the goods are carried by a land vehicle, then the relevant date shall be the date when the goods cross the land frontier of the country
When goods are sent through the post, then the relevant date shall be the date of dispatch of goods from the Post Office.
When the supply includes services, and when the same is completed before receipt of payment, then the relevant date shall be the payment receipt date.
Similarly, when the services are performed after receipt of an advance, then the relevant date shall be the invoice date.
Where refund claim is made for excess input tax credit left unutilized, then the relevant date shall be the end of the financial year for which such a refund claim is being made.
Where the goods are supplied for deemed exports, i.e. supply to SEZ or 100% EOU, the relevant date shall be the return filing date related to such deemed exports was filed.
Where the refund arises due to an order passed in favor of the appellant, then the relevant date shall be the date of such order.
Where tax was paid following a provisional assessment and refund now arises, then the relevant date shall be the date at which such tax was adjusted.
When the person claiming a refund is not the supplier, then the relevant date shall be the date at which the goods are received by such a person.
For all other cases, the relevant date shall be the date of payment of tax.
It is mandatory to keep in mind these relevant dates as failure to file refund applications within the mentioned time can lead to blockage of credit.
Once the application made, an acknowledgment in Form RFD-02 will be auto-generated for future references and sent across through an email and an SMS. In case the system finds some deficiencies in the refund application, then Form RFD-03 shall be sent to the taxpayer to correct his application.
Moreover, there are certain documents that must be enclosed along with the electronic refund application. Where the refund application is below Rs. 5 lakhs, then a declaration shall be made by the taxpayer indicating that the amount of refund has not been utilized by or transferred to any other person. Where such an application exceeds Rs. 5 lakhs, then apart from the declaration above, a document evidencing that the amount was paid by the taxpayer shall also be attached.
When the person filing a refund claim is a United Nations’ body, Consulate or a foreign embassy, then the application for refund has to be filed within 90 days from the end of the quarter for which the goods or services were procured. The application should be made in Form RFD-10.
Note: There shall be no refunds where the amount of refund is less than Rs. 1,000/-
The above declaration may be required to be certified by a Chartered Accountant.
Contact legalsuvidha team for any support required on filing GST refund
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