REFUND PROCESS 1 SALIENT FEATURES OF REFUND The refund claim - - PowerPoint PPT Presentation

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HELPING CLIENTS KEEP MORE OF WHAT THEY EARN

GOODS AND SERVICES TAX REFUND PROCESS

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SALIENT FEATURES OF REFUND

Section 48 of Central /State Goods & Service Tax Act 2016

• The refund claim relates to :
• tax relating to goods and/or services exported out of India;
• tax on inputs or input services “used” in the goods and/or services exported out of India including

zero rated supply;

• tax on the supply of goods regarded as deemed exports;
• unutilized input tax credit at the end of tax period in cases of :

exports and input tax rate being higher than output tax rate.

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• Any person shall file an application in FORM GST RFD- 01 for refund of any tax and interest paid

to the proper officer of IGST/CGST/SGST within two years from the relevant date in the prescribed manner.

• Following persons are entitled to a refund of IGST/CGST/SGST paid by it/him on inward

supplies of goods and/or services –

• A specialized agency of the United Nations Organization or
• Any Multilateral Financial Institution and Organization notified under the United

Nations (Privileges and Immunities) Act, 1947 (46 of 1947),

• Consulate or Embassy of foreign countries or
• Any other person or class of persons as notified under section 49
• Those agencies may make an application for such refund to the proper officer,

In specified form and manner within six months from the end of the month in which such supply was received.

Section 48 of Central /State Goods & Service Tax Act 2016

PROVISIONS RELATING TO REFUND

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• Refund of the unutilized input tax credit can be claimed at the end of any tax period in the

following cases:

Section 48 of Central /State Goods & Service Tax Act 2016

PROVISIONS RELATING TO REFUND

Refund of Unutilized input tax credit will be available In case of exports of goods and/ or services out of India on which export duty is not payable; or Zero rated supplies. If rate of tax on inputs is higher than the rate of tax

• n outputs.
• However, the refund is not eligible in the following cases as well:
• If the goods exported out of India are subjected to export duty; or
• If the goods exported out of India are exempted or nil rated;
• If supplier claims refund of the output tax paid under IGST Act.

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• The refund relating to an application if found in order, will be sanctioned within sixty days from

the date of receipt of application containing all the prescribed information.

• The refund will be directly paid to the claimant in the following cases:
• Refund of tax on goods and/or services exported out of India;
• Refund of tax on inputs or input services used in the goods and/or services which are exported
• ut of India;
• Refund of unutilized input tax credit as indicated earlier;
• The tax / interest / other amounts paid by the applicant, if he had not passed on the incidence to

any other person; or

• The tax or interest borne by notified (by Central/State Government on the recommendation of the

council) class of applicant:

• Refund of tax paid on a supply which is not provided, either wholly or partially, and for which

invoice has not been issued;

• Refund of tax in case it is wrongly collected or deposited with the government.

Section 48 of Central /State Goods & Service Tax Act 2016

PROVISIONS RELATING TO REFUND

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PROVISIONS RELATING TO REFUND

• In case of claim of refund of accumulated input tax credit, the refund due will be either withheld
• r deducted in cases where –
• A person defaults in furnishing any return;
• A person is required to pay any tax, interest or penalty ordered, which is not stayed by Court or

appellate Authority within (a) 30 days from the date of filing the appeal under this Act, where an appeal is filed; and (b) In case where appeal is not filed, on the last date of the due date for filing appeal.

• In case where the refund is an consequence of an order and such order is in appeals, further

proceedings, or any other proceeding under this Act the commissioner is of the opinion that granting of refund would affect the revenue adversely the commissioner may withhold the refund till such time as it may determine.

• The advance tax deposited by a casual taxable person or a non-resident taxable person at the

time of taking registration would be refunded only after the completion of entire period for which the certificate of registration is granted and all the returns required are furnished.

Section 48 of Central /State Goods & Service Tax Act 2016

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MISCELLANEOUS PROVISION

Section 48 and Refund Rules of Central /State Goods & Service Tax 2016

• Refund of GST paid on export of goods or services then 90% of the total amount so claimed,

excluding the amount of input tax credit provisionally accepted to be refunded within 7 days of acknowledgement in FORM GST RFD-04. Balance 10% to be paid after verification of documents.

• Provisional refund shall not be issued when:
• Person who has been prosecuted in last 5 years with tax involvement of 2.5 Crores and above.
• Compliance rate is not less than 5 on a scale of 10.
• The refund application has to be supported by prescribed documents evidencing facts that the

refund is due to the applicants and the incidence of tax/ interest/ amount paid was not passed

• n by the claimant to any other person.
• If the amount of the refund claim is less than Rs. 5 lakhs there is no need of filling such

documentary evidence instead a self declaration stating that the benefit of tax/ interest is not passed on to any other person is sufficient.

• No refund shall be paid to the applicant is the amount of refund is less than rupees thousand

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RELEVANT DATE

Section 48 of Central /State Goods & Service Tax 2016

Situation Refund is in respect of goods exported (or on inputs/ input services used in such goods)

• i. By sea
• ii. By Air
• iii. By land
• iv. By post

Refund in respect of deemed exports 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: (i)Judgment (ii)Decree (iii)Order (iv)Direction of Appellate Authority, AppellateTribunal or any Court Refund of unutilized input tax credit Tax is paid provisionally under this Act or the rules made there under In case of a person other than the supplier In any other case Refund is in respect of services exported (or on inputs/ input services used in such services) Date of communication of such judgment, decree, order or direction End of the financial year in which such claim for refund arises Date of adjustment of tax after the final assessment thereof. Date of receipt of goods or services by such person Date of payment of GST Relevant date Date on which the ship or the aircraft in which such goods are loaded, leaves India Date on which such goods pass the frontier Date of dispatch of goods by the concerned Post Office to a place outside India Date on which the return relating to such deemed exports is filed.

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Refund Rules of Central /State Goods & Service Tax 2016

PROCESS FOR REFUND

Refund application to be filed incase of Export of Goods /service Untilised input tax credit Apply in GST RFD-01 within 2 years Acknowledgement in GST RFD-02 made available to the applicant Deficiencies to be notified in GST RFD-03 Rectified Not rectified Notice served for refund not admissible GST RFD-07

A

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Refund Rules of Central /State Goods & Service Tax 2016

PROCESS FOR REFUND

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Proper officer satisfied Application rejected in GST RFD-05

No Yes

Refund allowed Provisional refund -90% in 7 days in GST RFD-04 Any other demand

• utstanding

Adjustment of refund in GST RFD- 06 Final refund order GST RFD-05

Yes No

Refund Delayed Interest to be paid in GST RFD-09 Amount payable to applicant

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INTEREST ACCURED AND CONSUMER WELFARE FUND

Section 51 and 52 of Central /State Goods & Service Tax 2016

• Interest on Refund
• Refund application to be processed within 60 days from the date of application
• For refunds made after 60 days from date of application – interest at the rate as

may be recommended by the GST Council

• Consumer Welfare Fund
• If the applicant is unable to prove that the incidence was not actually passed onto any
• ther person then the refund amount is credited to the Consumer Welfare fund.
• It should be ensured that the monies credited to the fund shall be utilized to provide

assistance to protect the welfare of the consumers, as per the Rules made by the Government.

• The Central or the State Government shall maintain proper and separate records in

relation to the Fund in consultation with the Comptroller and Auditor-General of India.

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REFUND FORMS UNDER GST REGIME

Refund Rules of Central /State Goods & Service Tax Act 2016 SI No. Form No Particulars Time limit 1 RFD 1 Refund Application Within 2 years from relevant date. 2 RFD 2 Acknowledgement Within 15 days from date of application. Immediate in case of refund from electronic ledger. 3 RFD 3 Notice of deficiency on Application for Refund Within 15 days from the date of application. 4 RFD 4 Provisional Refund Sanction Order Within seven days from the date of acknowledgement 5 RFD 5 Refund Sanction or part sanctioned 90 days from the date of refund application. 6 RFD 6 Order for Complete Adjustment of claimed refund against past demand 90 days from the date of refund application. 7 RFD 7 SCN rejecting refund application 8 RFD 8 Payment Advice Immediately after RFD 4. 9 RFD 9 Order for interest on delayed Payments 10 RFD 10 Refund Application form Specified category Quarterly

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