Refund of Tax –
Refund includes refund of tax and interest paid on:
1.Zero-rated supplies of goods or services or both; or
2.Inputs or input services used in the effecting such zero-rated supplies of goods or services or both; or
3.Supply of goods regarded as deemed exports; or
4.Refund of unutilized input tax credit at the end of any tax period in case the rate of output tax is less than the rate of input tax.
Circumstances for claiming refund
1. refund of tax paid on zero-rated supplies of goods and/or services or on inputs or input services used in making such zero-rated supplies;
2. refund of unutilized input tax credit under Section 54(3);
3. 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;
4. refund of tax in pursuance of Section 77;
5. 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
6. the tax or interest borne by such other class of applicants as the Central or a State Government may, on the recommendation of the Council, by notification, specify.
Application for claiming refund
The person claiming refund has to make an application in Form GST RFD-01.
1.Refund application is to be filed before the expiry of two years from the relevant date.
2.But in case of UNO the refund application is required to be made before the expiry of 6 months from the last day of the Quarter in which such supply was received.
Relevant date for calculating the two years’ time limit
Situation Relevant Date
Refund is in respect of goods exported outside India (or on inputs/ input services used in such goods) (i) By sea Date on which the ship or the aircraft in which such goods are loaded, leaves India
(ii) By Air
(iii) By land Date on which such goods pass the frontier
(iv) By post Date of dispatch of goods by the concerned Post Office to a place outside India
Refund in respect of deemed exports Date on which the return relating to such deemed exports is filed
Refund is in respect of services exported (or on inputs/ input services used in such services) Where supply of service completed prior to receipt of payment - Date of receipt of payment in convertible foreign exchange
Where payment for service received in advance - Date of issue of invoice
Tax becomes refundable as a consequence of:
of Appellate Authority, Appellate Tribunal or any Court
Date of communication of such judgment, decree, order or direction
Refund of unutilized input tax credit End of the financial year in which such claim for refund arises
Tax is paid provisionally under this Act or the rules made thereunder Date of adjustment of tax after the final assessment thereof.
In case of a person other than the supplier Date of receipt of goods or services by such person
In any other case Date of payment of tax
Rs. 1000. If the amount of refund is less than ` 1,000/-, then no refund can be paid.
Refund of balance in cash or credit ledger
The balance of cash or credit after payment of tax, interest, penalty, fee or any other amount
Refund of any unutilised ITC
Refund can only be claimed under following circumstances: –
(a) zero rated supplies made without payment of tax
(b) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council
Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty
Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.
Document to be enclosed
The following documents are required to be enclosed along with the refund application:
1. Documentary evidence to establish that a refund is due to the applicant, and
2. Documentary evidence to prove that incidence of tax and interest had not been passed on to any other person.
Exemption – if the refund claimed is less than 2 lakh rupees, then documentary evidence would not be required to be submitted. However, the applicant may file a declaration based on the documentary or other evidence available with him, certifying that the incidence of such tax and interest is not passed on to any other person
Provisional sanction of refund
The proper officer may sanction refund to a person on a condition that during any period of five years immediately preceding the tax period to which the claim for refund relates, not been prosecuted for any offence under the Act or under an erstwhile law where the amount of tax evaded exceeds two hundred and fifty lakh rupees. The proper officer, after scrutiny of the claim and the evidence submitted in support thereof and on being prima facie satisfied that the amount claimed as refund is due to the applicant shall make an order in FORM GST RFD-04, sanctioning the amount of refund due to the said applicant on a provisional basis within a period not exceeding seven days from the date of acknowledgement.
Provisional refund on Exports
the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, 90%. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted. Such provisional refund will be granted within 10 days of making of application or within 7 days of issuance of acknowledgement of the application.
Refund of the balance 10% will be granted after verification of documents furnished by the applicant.
Procedure for claim and grant of refund of IGST paid on goods exported out of India –
In terms of Rule 96 of the CGST Rules , shipping bill filed by an exporter shall be deemed to be an application for refund of IGST tax paid on the goods exported out of India, when
(a) person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering no. and date of shipping bills or bills of export; and
(b) the applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR- 3B, as the case may be.
In this regard, the details of the relevant export invoices contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the system designated by the Customs (“Custom System”) and said system will revert the confirmation of export of goods. In case where, date of furnishing FORM GSTR-1 for a tax period has been extended, the supplier shall furnish the information relating to exports as specified in Table 6A of FORM GSTR-1 (auto-drafted for the said tax period) after the return in FORM GSTR-3B has been furnished and the same shall be transmitted electronically to Custom System. [Refer Notification No. 51/2017 – Central Tax dated 28.102.017]
Upon the receipt of the information regarding the furnishing of a valid return in FORM GSTR-3 or FORM GSTR- 3B, the Custom System shall process the claim for refund and an amount equal to the IGST paid in respect of each shipping bill or bill of export, shall be electronically credited to the bank account of the applicant mentioned in his registration particulars and as intimated to the Customs authorities.
[ Note: Steps Table 6A will be auto populated as
File GSTR-3B for a Tax Period
a. Fill Table 6A of Form GSTR-1 available in the Common Portal. Refund will be processed based on this Table 6A
b. As and when Form GSTR-1 is filed, the data relating to exports will be autopopulated from the above Table 6A]
Time limit on proper officer to pass final order
The proper officer shall issue the order within sixty days from the date of receipt of refund application.
Adjustment of refund
The refund due to the applicant can be adjusted towards tax, interest, penalty or any other amount which the applicant is liable to pay but which remains unpaid under the Act or under any earlier law.
Manual Filing of Refund Application –
Refunds may be filed manually and the processing of refund with respect to any notice, reply or order, among others, can also be issued / filed manually. in terms of Rule 97A has been inserted in the CGST Rules, 2017 vide Notification No. 55/2017 – Central Tax dated 15-11-2017. In terms of Rule 97A, any reference to this Chapter (i.e., Chapter X- Refund under CGST Rules) any reference to electronic filing of an application, intimation, reply, declaration, statement or electronic issuance of a notice, order or certificate on the common portal shall, in respect of that process or procedure, include manual filing of the said application, intimation, reply, declaration, statement or issuance of the said notice, order or certificate in such Forms as appended to these rules.
Application for refund in case of deemed export
Application for refund in case of deemed export can be filed by:
(a) the recipient of deemed export supplies; or
(b) the supplier of deemed export supplies in cases where the recipient does not avail of input tax credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund
Evidences required in case of refund of deemed export
In case of refund is on account of deemed exports, a statement containing the number and date of invoices along with such other evidence as may be notified are to be submitted. In this regard Central government vide Notification No. 49/2017-Central Tax dated 18.10.2017 has notifies the certain evidences which are required to be produced by the supplier of deemed export supplies for claiming refund:
1. Acknowledgment by the jurisdictional Tax officer of the Advance Authorisation holder or Export Promotion Capital Goods Authorisation holder (“Holder”), as the case may be, that the said deemed export supplies have been received by the Holder, or
Copy of the tax invoice under which such supplies have been made by the supplier, duly signed by the recipient EOU that said deemed export supplies have been received by it.:
2. An undertaking by the recipient of deemed export supplies that :
• No input tax credit on such supplies has been availed of by him.
• He shall not claim the refund in respect of such supplies and the supplier may claim the refund.
Note: Though not stated but It is prudent for the Recipient to obtain an undertaking from the Supplier that Supplier has not claimed refund of the GST paid on the Deemed Exports the refund and the recipient may claim the refund.
Interest on refund sanctioned
If the refund is not sanctioned with 60 days from the receipt of refund application, interest would be paid at a rate not exceeding 6%.
If refund is made based on the order of appellant authority then interest would be paid at a rate of 9% for the period starting from starting from expiry of 60 days from the date of application consequent to the order till the date of actual refund of tax.