Refund has been discussed in section 54 of the CGST/SGST Act.
“Refund” includes (a) any balance amount in the electronic cash ledger so claimed in the returns, (b) any unutilized input tax credit in respect of
(i) zero rated supplies made without payment of tax or,
(ii) 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),
(c) tax paid by specialized agency of United Nations or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries on any inward supply.
Listed below are the steps involved in processing of the refund application:
Applicant files the refund application on the GST Portal inForm GST RFD-01. Such application will be available at the Dashboard of Tax Official as pending work item.
The refund application filed by the applicant has to be processed by the Refund Processing Officer.
Refund Processing Officer will scrutinize the application and attachments filed by the applicant.
On the basis of scrutiny of the refund application filed by the applicant, if the refund application is found to be complete in all aspects, Acknowledgement in Form GST RFD-02 will be issued by the Refund Processing Officer, within 15 days from the date of filing of the refund application.
On the basis of scrutiny of the refund application and attachments filed by the applicant, in case, any deficiencies are noticed in refund application, Deficiency Memo will be issued in Form GST RFD-03 on the refund application by the Refund Processing Officer. In case of issuance of Deficiency Memo in Form GST RFD-03, there would be auto re-credit of refund claimed amount in Electronic Cash/ Credit Ledger, if the ledger has been debited at the time of filing refund application. In this case, the applicant needs to file a fresh refund application for the same period again, if needed, after rectification of the deficiencies mentioned in deficiency memo.
Refund Processing Officer can issue online notice for rejection of application for refund or recovery of erroneously granted refundfor seeking any clarification in Form GST RFD-08, if required.
Applicantis required tofurnish reply to the notice (issued in Form GST RFD-08) in Form GST RFD-09 online on GST Portal, within 15 days of issuance of notice.
Tax Official may issue Provisional Refund Order inForm GST RFD-04 within 7 days from the date of acknowledgement up to 90% of the refund claimed amount, if the applicant is eligible to get provisional refund. Refund Processing Officer can issue Provisional Order in Form GST RFD-04 in following cases:
Refund in case of export of services with payment of tax
Refund of accumulated ITC on account of export of goods/services under Bond/LUT without payment of integrated tax.
Supplies made to SEZ Unit/SEZ Developer with payment of Tax
Supplies made to SEZ Unit /SEZ Developer without payment of Tax
Refund Processing Officer will issue Refund Sanction/ Rejection Order inForm GST RFD-06.
Note:
In case of refund applications, in which provisional refund order has been issued in Form GST RFD-04, the final order Form GST RFD-06 will quantify the total sanctioned amount out of the claimed amount and the net balance amount will be sanctioned by issuing Form GST RFD-06, after further verification and examination of the application by the Tax Official.
In case of complete adjustment of refund towards any demand, Refund Processing Officer may adjust it through Form GST RFD-06.
Payment Order needs be issued inForm GST RFD-05after issuance of Form GST RFD-04 or Form GST RFD-06 in case of sanction of refund.
The sanctioned refund amount may be withheld by the Refund Processing Officer by issuingForm GST RFD-07 (Part B). In such case, Tax Official will not issue Form GST RFD-05, till the withhold order is in operation.
Order for re-credit of the amount to Electronic Cash or Credit ledger on rejection of refund claim(Form GST PMT-03) is required to be issued in case if
the ledger has been debited at the time of filing refund application for such amount and
any amount of refund is marked as inadmissible/rejected by refund processing officer by issue of an Order in Form GST RFD-06.
