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Detailed Information About the Refund Process under GST

Refunds under GST

GST is meant to relieve the taxpayers from the complicated compliance issues and prolonged refund policies. And that is why, it became imperative to process the refund policy in order to make it easier.

So, here’s detailed information pertaining to the procedure to get refund under GST:

 Under What Situations Can You Claim GST?

  1. In case of erroneous payments of tax.
  2. Export of goods or services under the claim of rebate or refund of input tax credit of the particular goods or services.
  3. Finalization of provisional assessment
  4. Credit accumulation when output tax is nil rated or exempted.
  5. Volume based incentives provided by supplier through credit note.
  6. Refund of tax payment on purchases made by Embassies or UN Bodies.
  7. Payment of tax duty on investigation but zero or less liability arising on the finalization of investigation.
  8. Accumulation of credit due to differential rate of tax between input and output.
  9. Refund or pre-deposit for filing appeal including refund arising in pursuance of an appellate authority’s order
  10. Tax refund for international tourists.

What is the Refund Process Under GST?

Here’s a step by step guide to refund process under GST:

  1. File Application Form for GST return under GSTN portal.
  2. Once the application is filed, an acknowledgement number shall be shared.
  3. Adjustments to reduce carry forward input tax shall be made automatically.
  4. Refund documents shall be scrutinised within 30 days of filing the application.
  5. It shall be scrutinised that the case is not of “unjust enrichment”. If t is, the amount shall be transferred to Consumer Welfare Fund (CWF).
  6. In case the refund amount is more than the predetermined amount of refund, it shall go under pre-audit process for the sanction.
  7. Refund will be credited electronically to the account of applicant via ECS, RTGS or NEFT.
  8. Application of refund shall be made at the quarter end.
  9. No refund claim shall be entertained for the amount less than Rs. 1000.

Interest on Delay in Refund

The extract of Section 56 of CGST Act,2017 quoted below:

“If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under subsection (1) of that section, interest at such rate not exceeding six per cent. as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application under the said sub-section till the date of refund of such tax:

Provided that where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent. as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund.”

The refund claims under GST would be a completely online process which would undeniably, be hassle free for the taxpayers!

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