All you Know about documents required under the  GST Refund System

GST Refund System

• As the Goods and Services Tax or GST emerged, various refund schemes and processes were also set in place. Subsequently, several requests for compensation were made by taxpayers and a generic form was adopted.
• There might be a number of errors when filling in the Goods and Services Tax Challan to make the Goods and Services Tax payment.
• You can even end up paying excess GST because of this. This excess sum is displayed as the balance of the Electronic Cash Ledger.
• The value in Goods and Services Tax  Electronic Cash Ledger which be claimed as a refund by filing the refund application under the Goods and Services Tax form RFD-01.
• This can be made by online at the GST Portal/GSTN, The surplus Goods and Services Tax payment can be sought as a refund within 2 months from the date of payment.
• Implies that if the excess GST is paid in the month of November 2017, the GST refund application may be filed as per GSTN Timeline.

 

GST REFUND CLAIM

• The conditions for cash flow and working capital of suppliers and exporters may be negatively affected if the refund were postponed.
• As a consequence, one of the goals of introducing the GST is to ensure that the refund process is simpler so that producers and exporters do not face difficulties due to delays.
• By ensuring that the refund process is completed easily, tax administration can become more efficient.
• The GST law includes rules on refunds and seeks to streamline and standardize the processes for refunds under the GST law. A uniform method has now been developed to make requests for refunds.
• The appeals process can be performed electronically in a timely manner.

Eligibility Criteria- GST Refund

Any registered taxable person, other than an input service distributor/component taxpayer / TDS deductor / TCS Collector, may claim the refund of taxes paid on exports under the following conditions:

• The taxpayer who filed the form GSTR-1, providing the export details in Table 6A of GSTR-1, together with the Integrated Tax details of the shipment, may claim the refund.
• taxpayers who filed the form GSTR-3B shall be the return of the relevant tax period for which the refund may be claimed.

GST REFUND IN EXPORTS CASE WITHOUT PAYMENT OF IGST

The refund of the input tax credit is granted as follows:-

Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC Amount = Adjusted Total turnover

Where,

1. “Refund amount” means the maximum refund which is admissible;
2. “Net ITC means an input tax credit applied to inputs and input services during the relevant period;
3. “Turnover of zero-rated service delivery” means the value of zero-rated service delivery made without payment of duty under bond or LUT
4. “Turnover of zero-rated service delivery” means the value of zero-rated service delivery.
5. “Adjusted Total turnover” means the turnover excluding the value of exempt supplies, other than zero, during the relevant period
6. The relevant period shall be the period for which the request for refund has been filed.

What is the deadline to claim the refund?

Deadline for the submission of a GST refund request: The time limit to claim the refund shall be 2 years from the date of the refund.

• In GST, applications for GST refunds should be made by the claimant within 2 years of the applicable date.
• If the request is correct, the refund must be paid within sixty days from the date of receipt of the claim. Interest on the refund withheld shall apply at a rate of 6%.
• The interest rate of 9% per year for late refunds (beyond 60 days from the date of the order of the authority/court) shall apply.

In each case of a GST refund, the relevant date is different details are here under :

Reason for GST Refund- Relevant Date

1. Overpayment of GST- Date of payment
2. Export or deemed export of goods or services – Date of dispatch/loading / passing the border
3. ITC accumulates as output is tax-exempt or zero-rated- The last date of the financial year to which the credit belongs
4. Finalization of the provisional assessment- The date on which the tax is adjusted

Also, if the refund is paid with delay, the interest shall be 24 percent p.a. It’s due to the government.

List of Documentary evidence required for GST Refund Processing

Exports of goods without payment of IGST

The application shall be accompanied by any of the following documentary evidence in the form of GST RFD-01, as applicable:

1. Copy of the form RFD 01 A filed on the common portal & RNA (Application Reference Number).
2. GSTR-3B / GSTR-3/GSTR 1 of the specific month
3. Copy of the undertaking as referred to in Circular 24/2017
4. Statement 3 (Rule 89(2)(b) and (c)) 6. Statement 3A Rule 89(4) (Calculation of refunds).
5. Copy of the undertaking of no prosecution pursuant to Rule 91(1) of the CGST Rules of 2017.
6. Invoices for export & invoices for input service 8. Bank Certificate / Foreign Inward Remittance Certificate Details.
7. Copy Statement 1: Application for refund has not been filed with any other authority.
8. A Copy Statement 2: No refund has been claimed against the respective invoices (ITC)
9. Copy Declaration 3: Applicant did not contravene Rule 91(1) of the CGST Rules 2017 Requirement of no prosecution for the last 5 years
10. A Copy of Declaration 4:as per GST RFD-01
11. Copy of Declaration 5: Drawback not used
12. A Copy of Declaration 6: Declaration on unfair enrichment

Export of services with or without payment of IGST

GST Refund Mechanism for Export of Services

The application shall be usually accompanied, as generally applicable, by any of the following documentary evidence in the form GST RFD-01:

1. Form GSTRFD-01 A filed on the common portal A & ARN printout.
2. GSTR-3B / GSTR-3 print out of a given month.
3. Statement-2 as provided for in Rule 89(2)(c) of the CGST Rules 2017
4. Copy of the undertaking by the applicant pursuant to Circular 24/2017
5. the Export & Input Services Invoice.
6. BRC / FIRC to export services
7. Proceedings of no prosecution Rule 91(1) of CGST Rules 2017
8. Application Filing of the declaration in accordance with GST RFD-01 of
9. Filling the Declaration No Drawback was made available to
10. Filling the declaration No export duty shall apply to exports
11. A Filling the declaration of unjust enrichment along with the CA certificate if the amount is more than 2 lakes.

Zero Rated Supplies to Special economic zone Unit / Special economic zone Developers

The request shall be accompanied by any of the following documentary evidence in the form GST RFD-01, as applicable:

1. Copy of the form RFD 01 A filed on the common port & ARN.
2. GSTR-3B / GSTR-3 Print of a special month.
3. Copy of Statement-4 in accordance with Rule 89(2)(d) and (e)
4. Copy of the undertaking by the applicant pursuant to paragraph 2.0 of Circular 24/2017
5. Property officer’s endorsement of receipt of goods in SEZ (Provision Rule 89 of CGST Rules 2017).
6. Copy of the undertaking of no prosecution pursuant to Rule 91(1) of the CGST Rules 2017.
7. Tax invoices as laid down in Rule 46 of the CGST Rules 2017 8. Copy of the undertaking by SEZ developer / Unit as not claimed by ITC.

 Deemed exports

1. Declaration of GST RFD-01 – (Claimed not to exceed ITC)
2. Copy of the undertaking as referred to in Notice No. 49/2017 by receipt of the Supply stating no claims by Refund & ITC
3. Statement-5B Rule 89(2)(g) of the CGST 2017 Rules 4. Printout GSTR-3B / GSTR-3
4. Copy of GSTR RFD-01 & /ARN
5. A Copy of undertaking no prosecution Rule 91(i)
6. Copy of the undertaking by the applicant as provided for in 24/2017

ITC accumulated as a result of the inverted tax structure

1. Copy of the form RFD 01 A filed on the common port & ARN
2. GST-3B / GST-3 of the month
3. Copy of the undertaking as indicated in Circular 24/2017
4. A Copy of the undertaking of no prosecution pursuant to Rule 91(1) of the CGST Rules 2017.
5. Refund Amount as provided for in Rule 89(5) of the CGST Rules 2017:
6. Copy of the Statement 1 Rule 89(2)(h) of the CGST Rules 2017 and Article 54(3)(ii) of the CGST Act 2017
7. Self-declaration of unwarranted enrichment along with the CA certificate if the amount is more than 2 lakes

Excess cash available in the cash ledger

1. Copy of the form RFD 01 A filed on the common port & AMN
2. A Copy GSTR-3B/3 of the month
3. Statement 7 pursuant to Rule 89(2)(k)
4. A Copy of Cash & Credit Ledger

GST Refund Update as of 27 June 2020

• A Full or part of the sum of the refund sought may have been denied by a notice given by the authority. After completion of the due process, a final order must be given within sixty days from the date of submission of the refund request.
• In the event that the time limit expires between 20 March and 30 August 2020, the last date of issue of the order shall be extended to the latter of the mentioned schedule: Fifteen days from the date of receipt of a reply from the applicant, or August 31, 2020

In case of any delay of the Refund and its Mechanism

• GSTN Committee, along with the defined GST laws and regulations, suggested that the application for refunds should be submitted within Ninety days and be processed within the same time period.
• If in any case the application could not be handled within the specified time timeframe, there is a 6 percent interest suggested along with the refund amount.
• It has also been reported by Finance Minister – Smt. N. Sitharaman has clarified that the refund process will take place within seven days and that if the process is delayed for more than 2 weeks, the refund will be given together with the interest.
• The method of applying for a refund is speculated to be easy and effective due to its online functionality.
• In addition, the data will be submitted electronically, which indicates that the verification and thorough review of the refund application will be carried out rapidly.

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Post by Rajput Jain & Associates