FAQs ON GST REFUND
Q.1 What are the situations which can produce to refund under GST?
Ans. Any sought of claim for refund arising in relation to -
- Export of products or services on payment of tax
- Supply of products or services to SEZs units and developers on payment of tax
- Export of products or services under Bond/Letter of Undertaking, without payment of tax
- Supply of products or services to SEZs units and developers under Bond/Letter of Undertaking, without payment of tax
- Deemed Exports, under which the amount of refund shall be available to both supplier and recipient.
- Refund of taxes in respect of purchase made by UN Agencies, Embassies etc
- Refund arising in respect of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court
- Refund of accumulated Input decrease on account of inverted duty structure
- Finalisation of provisional assessment
- Excess balance in electronic cash ledger
- Excess payment of tax
- Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India (not yet operationalized)
- Refund on account of tax paid on a supply which isn't provided, either wholly or partially, and that invoice has not been issued (tax paid on advance payment)
- Refund of CGST & SGST paid by treating the availability as intra-State supply which is subsequently held as inter-State supply and the other way around.
- Refudn to CSD Canteens.
The list is just indicative and not exhaustive.
Q.2 Whether Provisional Refund is allowable for all refunds under GST?
Ans. No. Section 54(6) of CGST Act provides for grant of provisional refund of 90% of the overall refund claim, just in case the claim relates to refund arising on account of zero rated supplies. Thus only refund claims where refund arises on account of zero rated supply are going to be entitled to provisional refund.
Q.3 what all supplies are termed as Zero rated supplies under GST?
Ans. As per Section 16(1) of IGST Act, the following supplies shall be considered as zero rated
- export of products or services or both; or
- supply of products or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
Q.4 The GST Law allows exports to be made under a LUT all told cases. is that this statement true or false?
Ans. the power of export under LUT is obtainable to any or all exporters in terms of notification No. 37/2017- Central Tax dated 4th October, 2017, except to people who are prosecuted for any offence under the CGST Act or the IGST Act or any of the present laws good during a case where the number of tax evaded exceeds 2 hundred and fifty lakh rupees. Para 2(d) of the Circular No. 8/8/2017-GST dated 4th October, 2017, mentions that an individual assuming to export under LUT is required to relinquish a self-declaration at the time of submission of LUT that he has not been prosecuted. Persons who don't seem to be eligible to export under LUT are required to export under bond/bank guarantee
Q.5 what's the point in time within which provisional refund must be sanctioned by the right officer?
Ans. The provisional refund should be sanctioned within 7 days from date of acknowledgement.
Q.6 Are the refunds issued as Transitional Credit, be eligible to be claimed as refund of accumulated ITC?
Ans. No. Refund of accumulated ITC is given supported a formula which uses the phrase ‘Net ITC’ and defines the identical as “input step-down availed on inputs and input services during the relevant period aside from the input step-down availed that refund is claimed under sub rules (4A) or (4B) or both”. Since the transitional credit pertains to duties and taxes paid under the present laws viz., under Central Excise Act, 1944 and Chapter V of the Finance Act, 1994, the identical can not be said to own been availed during the relevant period and thus, can not be treated as a part of ‘Net ITC’.
Q.7 When may be a deficiency memo issued in respect of a refund claim made u/s 54?
Ans. As per rule 90 (3) of the CGST Rules, it was provided that FORM GST RFD-03 (deficiency memo) be used for communication, where deficiencies are noticed. The said rule also provides for provisions, where the deficiency memo has been issued, the claimant is required to file a fresh refund application after the rectification of the deficiencies.
Q.8 Can deficiency memo be issued over once for a refund claim?
Ans. No. Rule 90 of the CGST Rules clearly states that when an applicant has been communicated the deficiencies in respect of a specific application, the applicant shall furnish a fresh refund application after rectification of such deficiencies. Thus, there may be just one deficiency memo for one refund application and once such a memo has been issued, the applicant is required to file a fresh refund application, manually in FORM GST RFD-01A. Once an application has been submitted afresh, pursuant to a deficiency memo, the right officer won't serve another deficiency memo with relevancy the applying for the identical period, unless the deficiencies acknowledged within the original memo remain unrectified, either wholly or partly, or the other substantive deficiency is noticed subsequently (Para 6.1 of CBIC Circular no. 37/11/2018-GST dated 15.03.2018)
Q.9 what is the procedure for fresh claims filings, pursuant to issuance of deficiency memo?
Ans. This fresh application has got to be accompanied with the initial ARN, entry number generated originally and a tough copy of the refund application filed online earlier.
Q.10 What would happen if exports are made without submitting any Bond/LUT. Will the refund be initiated against this?
Ans. No. Substantive benefits of zero rating won't be denied where it's been established that exports in terms of the relevant provisions are made. The delay in furnishing of LUT in such cases could also be condoned and therefore the facility for export under LUT are allowed on ex post facto basis taking into consideration the facts and circumstances of every case. Reference is also made to Circular No.37/11/2018-GST dated 15th March 2018.
Q.11 What are the documents to be submitted together with a refund claim of accumulated ITC on account of export of products and services without payment of tax?
Ans. the subsequent documents will must be submitted :
- Copy of duly filed FORM RFD-01A, as provided on the GST common portal
- Copy of ARN
- Copy of Statement 3A under the FORM RFD-01A, as generated on the GST common portal
- Copy of Statement 3 of FORM RFD-01A
- Printout of GSTR-2A and in cases where invoice details don't seem to be reflected within the GSTR-2A, the copy of Invoices w.r.t. input and input services. (Refer Circular No. 59/33/2018-GST dated 04th September 2018)
- BRC/FIRC for export of services
- Undertaking / Declaration in FORM RFD-01A
Q.12 What are the documents to be submitted together with a refund claim of IGST paid on export of services?
Ans. the subsequent documents will need to be submitted
- Copy of duly filed FORM RFD-01A, as provided on the GST common portal.
- Copy of ARN
- Copy of Statement 2 under the FORM RFD-01A, as provided on the GST common portal
- Printout of GSTR-2A and in cases where invoice details don't seem to be reflected within the GSTR-2A, the copy of Invoices, in respect of input and input services and capital goods
- BRC/FIRC for export of services.
- Undertaking / Declaration in FORM RFD-01A
Q.13 Whether the claimant will have to produce FIRC/BRC in an exceedingly claim for refund of ITC on account of export of goods?
Ans. No. just in case of export of products, realization of consideration isn't a pre-condition. Insistence on proof of realization of export proceeds for processing of refund claims associated with export of products has not been envisaged within the law and can not be insisted upon.
Q.14 just in case of supplies made to Merchant Exporters, will the supplies so made be treated as zero rated for the supplier?
Ans. No. Such supplies are considered as normal supplies. However, where the manufacturer is making supplies by fulfilling conditions under notification no. 40/2017-Central Tax (Rate) dated 23.10.2017 (corresponding IGST notification no.41/2017-Integrated Tax (Rate) dated 23.10.2017) and paying tax @ 0.1%, he can claim refund of unutilised ITC on account of inverted duty structure.
Q.15 If such supplies aren't zero rated, will it mean that the supplier won't be entitled to any refund on such supplies?
Ans. No. The supplier who supplies goods at the concessional rate is additionally eligible for refund on account of inverted tax structure as per the provisions of clause (ii) of the primary proviso to sub-section (3) of section 54 of the CGST Act.
Q.16 what's meant by the terms “relevant period” in up to now as refund claims under GST are concerned. Does it differ from “tax period” defined under the law?
Ans. Section 2(107) of the CGST Act defines the term “tax period” because the period that the return is required to be furnished. The terms ‘Net ITC’ and ‘turnover of zero rated supply of goods/services’ are utilized in the context of the relevant period in rule 89(4) of CGST Rules. The phrase ‘relevant period’ has been defined within the said sub-rule as ‘the period that the claim has been filed’. Thus, it is seen that the 2 terms have different connotations under the law.
Q.17 does the amount of refund relates to a tax period or relevant period under GST Law?
Ans. Refund is said to “relevant period” and to not “tax period”. In many scenarios, exports might not are made in this period during which the inputs or input services were received and input reduction has been availed. Similarly, there is also cases where exports may are made in a very period but no input decrease has been availed within the said period. The above referred rule, taking under consideration such scenarios, defines relevant period within the context of the refund claim and doesn't link it to a tax period.
Q.18 Can an exporter file for refund claims by clubbing successive calendar months/quarter or do they have to claim on a monthly basis?
Ans. The Exporter is provided with an option, in which they can file refund claim for one month / quarter or by clubbing successive calendar months / quarters. The calendar month(s) / quarter(s) that refund claim has been filed, however, cannot spread across different financial years.
Q.19 Can refund of taxes under Pre GST regime, be claimed under GST?
Ans. No. Refund claims of taxes paid under existing laws should be restrained as per the provisions of existing laws only.
Q.20 what will be the treatment of refund claims made under Pre GST laws?
Ans. As per section 142(3) of the CGST Act, the quantity of refund arising out of such claims shall be refunded in cash.
Further, the primary proviso to the said sub-section provides that where any claim for refund of CENVAT credit is fully or partially rejected, the quantity so rejected shall lapse and thus, won't be transitioned into GST.
Q.21 For Export of products made under LUT, what's the fundamental measure within which proof of export must be submitted?
Ans. As per the Rule 96A (1) of the CGST Rules, it is provided that any registered person may export goods or services without payment of integrated tax after furnishing a LUT / bond which he would be at risk of pay the tax due together with the interest as applicable within a period of fifteen days after the expiry of three months or such further period as is also allowed by the Commissioner from the date of issue of the invoice for export, if the products don't seem to be exported out of India.
Q.22 For Export of services made under LUT, what's the period within which proof of export have to be submitted?
Ans. The fundamental measure just in case of services is fifteen days after the expiry of 1 year or such further period as could also be allowed by the Commissioner from the date of issue of the invoice for export, if the payment of such services isn't received by the exporter in convertible exchange or in Indian rupees wherever permitted by the Federal Reserve Bank of India. (The underlined portion has been inserted vide CGST (Amendment) Act, 2018 and shall not into force once the identical is notified).
Q.23 What are the circumstances during which manual filing of refund claims is permitted under GST?
Ans. It is provided that the manual filing of refund claims is permitted under the circular no.17/17/2017-GST dated 15th November 2017 and circular no.24/24/2017 dated 24th November 2017 and circular no. 36/10/2018-GST dated 13th March 2018, where the claim relates to following transactions -
- refund of unutilized input step-down on account of zero rated supplies
- refund of unutilized input reduction where the credit has accumulated on account of rate of tax on inputs being more than the speed of tax on output supplies (other than nil rated or fully exempt supplies) of products or services or both except those supplies which are notified by the govt. on the recommendations of the Council.
- Refund on account of supplies in terms of notification no. 40/2017-Central Tax (Rate) and 41/2017-Integrated Tax (Rate), as notifies on 23.10.2017
- refund of tax on the provision of products considered deemed exports;
- refund of balance within the electronic cash ledger; and
- Refund claim by UIN entities.
Q.24 what's the shape during which manual claims have to be filed?
Ans. Manual claims have to be filed in Form GST RFD-01A. Form RFD-10 for UIN entities.
Q.25 what's the periodicity for filing of refund claims?
Ans. Refund claims on account of zero-rated supplies and on inverted duty structure, deemed exports and excess balance in electronic cash ledger shall be filed for a tax period based on monthly filing in the FORM GST RFD-01A. However, just in case registered persons having aggregate turnover of up to Rs1.5 crore within the preceding year or the present twelvemonth are opting to file FORM GSTR-1 quarterly, such a person would be required to file for refund on a quarterly basis.
Q.26 Can refund claims be filed whether or not GSTR-1/3B for the actual period has not been filed?
Ans. No. Refund claim for a tax period may be filed only after filing the small print in FORM GSTR-1 for the said tax period. it's also to be ensured that a sound return in FORM GSTR-3B has been filed for the last tax period before the one during which the refund application is being filed.
Q.27 Will the ITC availed provisionally, be provided as refund under GST?
Ans. Yes, it'll be allowed for the nowadays. As per the prevailing provisions, the date of furnishing of FORM GSTR 1, with effect from July, 2017, has been extended while the dates of furnishing of FORM GSTR 2 and FORM GSTR 3 for such period are yet to be notified, it's been decided by the competent authority to sanction refund of provisionally accepted input reduction at this juncture. However, the registered persons applying for refund must give an undertaking to the effect that the number of refund sanctioned would be paid back to the govt with interest just in case it's found subsequently that the necessities of clause (c) of sub-section (2) of section 16 read with sub-section (2) of sections 42 of the CGST Act haven't been complied with in respect of the quantity refunded.
Q.28 what's the format during which the undertaking noted above has to be filed?
Ans. The undertaking should be submitted manually together with the refund claim and also the same is accessible in FORM RFD-01A on the common portal.
Q.29 what's going to happen if the refund claim of unutilised ITC is rejected?
Ans. Where any amount claimed as refund is rejected under rule 92 of the CGST Rules, either fully or partly, the number debited, to the extent of rejection, shall be re-credited to the electronic credit ledger by an order made in FORM GST RFD-1B until the shape GST PMT-03 is obtainable on the common portal. (Para 4 of circular no. 59/33/2018-GST dated 04th September, 2018 refers).
Q.30 who is eligible to claim refund, in respect of deemed export supplies?
Ans. The third proviso to rule 89(1) of the CGST Rules allows the recipient or the supplier to use for refund of tax paid on such deemed export supplies.
Q.31 What all documents are required to be supported with the application, where the claim is in respect of deemed exports?
Ans. just in case such refund is sought by the supplier of deemed export supplies, the documentary evidences as per notification No. 49/2017-Central Tax dated 18.10.2017 also are required to be furnished which has an undertaking by the recipient of deemed export supplies that he shall not claim the refund in respect of such supplies which no input diminution on such supplies has been availed of by him. The undertaking should be submitted manually together with the refund claim.
Similarly, just in case the refund is filed by the recipient of deemed export supplies, an undertaking by the supplier of deemed export supplies that he shall not claim the refund in respect of such supplies is additionally required to be furnished manually.
Further, as per the provisions of rule 89(2)(g) of the CGST Rules, an announcement 5B of FORM GST RFD-01A (showing details of invoices of outward supplies just {in case} refund is claimed by supplier/ Details of invoices of inward supplies in case refund is claimed by recipient) is additionally required to be furnished for claiming refund on supplies declared as deemed exports.
Q.32 What are deemed export supplies?
Ans. the subsequent categories of supply of products are notified as deemed exports under section 147 of CGST Act, vide notification no. 48/2017-Central Tax dated 18.10.2017
|
SR.NO |
DESCRIPTION OF SUPPLY |
|
1 |
SUPPLY OF GOODS BY A REGISTERED PERSON AGAINST ADVANCE AUTHORISATION |
|
2 |
SUPPLY OF CAPITAL GOODS BY A REGISTERED PERSON AGAINST EXPORT PROMOTION CAPITAL GOODS AUTHORISATION |
|
3. |
SUPPLY OF GOODS MADE BY A REGISTERED PERSON TO AN EXPORT ORIENTED UNIT |
|
4. |
SUPPLY OF GOLD BY A BANK OR PUBLIC SECTOR UNDERTAKING SPECIFIED IN THE NOTIFICATION NO. 50/2017-CUSTOMS, DATED THE 30TH JUNE, 2017 (AS AMENDED) AGAINST ADVANCE AUTHORISATION |
Q.33 What are the situations during which refund of accumulated ITC is allowed under GST?
Ans. Refund of accumulated ITC is allowed only if the credit accumulation is on account of zero rated supply or on account of inverted rate structure.
Q.34 What are the situations within which refund of accumulated ITC won't be allowed whether or not it’s a case of zero rated supplies or inverted rate structure?
Ans. Refund of ITC won't be allowed where the products exported out of India are subject to duty or where the supplier claims refund of IGST paid on such supplies. the govt. also has the ability to notify supplies where refund of ITC won't be admissible whether or not such credit accumulation is on account of an inverted duty structure.
Q.35 Does the govt. exercised their powers in order to curtail refund of ITC on account of any product/services ?
Ans. Yes. the govt has issued notification no. 15/2017-Central Tax (Rate) dated 28th June 2017 wherein it's been notified that no refund of unutilised input diminution shall be allowed under section 54(3) of the CGST Act, just in case of supply of services as provided under the sub-item (b) of item 5 of Schedule II of the CGST Act. The supplies specified as provided under item 5(b) of Schedule II related to construction services.
|
SR.NO |
TARIFF ITEM, HEADING,SUB-HEADING OR CHAPTER |
DESCRIPTION OF GOODS |
|
1. |
8601 |
RAIL LOCOMOTIVES POWERED FROM AN EXTERNAL SOURCE OF ELECTRICITY OR BY ELECTRIC ACCUMULATORS |
|
2. |
8602 |
OTHER RAIL LOCOMOTIVES; LOCOMOTIVE TENDERS; SUCH AS DIESEL-ELECTRIC LOCOMOTIVES, STEAM LOCOMOTIVES AND TENDERS THEREOF |
|
3. |
8603 |
SELF-PROPELLED RAILWAY OR TRAMWAY COACHES, VANS AND TRUCKS, OTHER THAN THOSE OF HEADING 8604 |
|
4. |
8604 |
RAILWAY OR TRAMWAY MAINTENANCE OR SERVICE VEHICLES, WHETHER OR NOT SELF-PROPELLED (FOR EXAMPLE, WORKSHOPS, CRANES, BALLAST TAMPERS, TRACKLINERS, TESTING COACHES AND TRACK INSPECTION VEHICLES) |
|
5. |
8605 |
RAILWAY OR TRAMWAY PASSENGER COACHES, NOT SELF-PROPELLED; LUGGAGE VANS, POST OFFICE COACHES AND OTHER SPECIAL PURPOSE RAILWAY OR TRAMWAY COACHES, NOT SELF-PROPELLED (EXCLUDING THOSE OF HEADING 8604) |
|
6. |
8606 |
RAILWAY OR TRAMWAY GOODS VANS AND WAGONS, NOT SELF-PROPELLED |
|
7. |
8607 |
PARTS OF RAILWAY OR TRAMWAY LOCOMOTIVES OR ROLLING-STOCK; SUCH AS BOGIES, BISSEL-BOGIES, AXLES AND WHEELS, AND PARTS THEREOF |
|
8. |
8608 |
RAILWAY OR TRAMWAY TRACK FIXTURES AND FITTINGS; MECHANICAL (INCLUDING ELECTRO-MECHANICAL) SIGNALLING, SAFETY OR TRAFFIC CONTROL EQUIPMENT FOR RAILWAYS, TRAMWAYS, ROADS, INLAND WATERWAYS, PARKING FACILITIES, PORT INSTALLATIONS OR AIRFIELDS; PARTS OF THE FOREGOING |
Q.36 Will the above mentioned restrictions be applicable to zero rated supplies?
Ans. No. it's also been clarified by the govt. under their Circular No.18/18/2017-GST dated 16.11.2017, under which, the aforesaid notification having been issued under clause (ii) of the proviso to Section 54(3) of the CGST Act, 2017, restriction on refund of unutilised input diminution of GST paid on inputs won't be applicable to zero rated supplies, that's (a) export of products or services or both; or (b) supply of products or services or both to a Special Economic Zone Developer of special Economic Zone Unit.
Q.37 How will the refund amount be calculated just in case of claim of unutilised ITC on account of zero rated supplies?
Ans. The refund shall be calculated based on the given formula Refund Amount = (turnover of zero rated supply of products + turnover of zero rated supply of services ) x Net ITC /Adjusted total turnover.
Q.38 How will the refund amount be calculated just in case of claim of unutilised ITC on account of inverted rate structure?
Ans. within the case of refund on account of inverted duty structure, refund of input step-down shall be granted as per the subsequent formula –
Maximum Refund Amount = of products) x Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods.
Q.39 What does “Net ITC” mean for the aim of calculation of refund amount?
Ans. “Net ITC” for the aim of refund on account of zero rated supply means input decrease availed on inputs and input services during the relevant period aside from the input reduction availed that refund is claimed as pe the provisions of sub-rules (4A) or (4B) or both of Rule 89 of CGST Rules.
“Net ITC” for the aim of refund on account of inverted rate structure means input reduction availed on inputs during the relevant period apart from the input step-down availed that refund is claimed under sub-rules (4A) or (4B) or both of Rule 89 of CGST Rules.
Q.40 What does Turnover of zero rated supply of products mean for the aim of calculation of refund amount?
Ans. “Turnover of zero-rated supply of products” means the worth of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking, apart from the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both of Rule 89 of CGST Rules.
Q.41 What does Turnover of zero rated supply of services mean for the aim of calculation of refund amount?
Ans. “Turnover of zero-rated supply of services” means the worth of zero-rated supply of services made without payment of tax under bond or letter of undertaking, calculated within the following manner, namely:-
Zero-rated supply of services is that the aggregate of the payments received during the relevant period for zero-rated supply of services and zero-rated supply of services where supply has been completed in which the payment had been received prior to any of the period before the relevant period reduced by advances received for zero-rated supply of services that the availability of services has not been completed during the relevant period.
Q.42 What does Adjusted Total Turnover mean for the aim of calculation of refund amount?
Ans. “Adjusted Total turnover” means the turnover in an exceedingly State or a Union territory, as defined under clause (112) of section 2, excluding –
- the worth of exempt supplies apart from zero-rated supplies; and
- the turnover of supplies on account of which refund is claimed as per rule 89(4A) or (4B) or both, during the relevant FY.
Q.43 For a claim of refund of IGST paid on export of products, will the applicant must file GST RFD-01/01A?
Ans. No. Under the rule 96 of the CGST Rules, 2017, the shipping bill, as filed by an exporter, shall be deemed to be a refund application of integrated tax paid on the products exported out of India.
Q.44 when will the refund claim be treated as been filed?
Ans. Such application shall be deemed to possess been filed only when: –
- the person to blame of the conveyance carrying the export goods duly files an export manifest or an export report covering the quantity and therefore the date of shipping bills or bills of export; and
- the applicant has furnished a sound return in FORM GSTR-3 or FORM GSTR-3B, because the case could also be.
Q.45 who is responsible to process/disburse refund of IGST paid on export of goods?
Ans. As per Rule 96, the refund of IGST paid on export of products is processed and disbursed by Customs.
Q.46 What are the required in respect of validation of processing refund claim of IGST in respect of export of goods?
Ans. For processing such refund, GST system transmits invoice level data of Table 6A in GSTR 1 subject to the subsequent validations:
- GSTR-3B is filed for the corresponding period, with admitted liabilities under Table 3.1(b);
- Export invoices are required to be submitted in GSTR-1/Table 6A and shall provide the correct shipping bill number, shipping bill date and port code;
- The admitted liabilities of IGST under table 3.1(b) of GSTR-3B, is capable, or greater than, the IGST amount claimed to possess been paid under Table 6A of GSTR-1 of the corresponding period.
Q.47 Can refund of IGST on export of products be withheld under any circumstances?
Ans. Yes. Situations where refund of IGST on goods are often withheld are as under
- missive of invitation has been received from the jurisdictional Commissioner of central tax, State tax or Union territory tax to withhold the payment of refund.
- the correct officer of Customs determines that the products were exported in violation of the provisions of the Customs Act, 1962.
Q.48 What all modalities are required to be followed where the refund is withheld on the request of the jurisdictional Commissioner of Central /State Tax?
Ans. Where refund is withheld in accordance with request from jurisdictional commissioner, the correct officer of integrated tax at the Customs station shall intimate the applicant and therefore the jurisdictional Commissioner of central tax, State tax or Union territory tax, because the case could also be, and a replica of such intimation shall be transmitted to the common portal.
Thereafter, the correct officer of central tax or State tax or Union territory tax, because the case is also, shall pass an order partially B of FORM GST RFD-07.
Where the applicant becomes entitled to refund of the number withheld as above, the concerned jurisdictional officer of central tax, State tax or Union territory tax, because the case could also be, shall proceed to refund the quantity after passing an order in FORM GST RFD-06.
Further, under the Circular no.17/17/2017-GST, where any order regarding withholding of such refund or its further sanction respectively in PART-B of Form GST RFD-07 or Form GST RFD-06, the same shall be done manually till the refund module becomes operational on the GST common portal.
Q.49 When will interest become payable in a very refund claim?
Ans. As per Section 56 of CGST Act, if any tax ordered to be refunded under section 54 (5) to any applicant isn't refunded within sixty days from the date of receipt of refund application as provided under section 54(1), interest at such rate not exceeding six per cent. as is also per the notification issued by the govt on the recommendations of the Council and the same shall be payable on account 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.
Where any claim of refund arises from an order lapsed an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and therefore the same isn't refunded within the said period of sixty days, interest at such rate not exceeding nine per cent. as could also be notified by the govt. as provided 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.
However, where the claim is made on account of refund of pre-deposit made under Section 107 or 112 of the GST Act, different provisions will apply for interest. As per Section 115 of the GST Act, where an amount paid by the appellant under section 107(6) or section 112(8) is required to be refunded consequent to any order of the Appellate Authority or of the Appellate Tribunal, interest at the speed specified under section 56 shall be payable in respect of such refund from the date of payment of the number till the date of refund of such amount. Thus, in cases of refund of pre-deposit amount, interest will should be paid from the date of payment till the date of refund of the number.
Q.50 what's the speed of interest notified by the govt. for delayed settlement of refund claims?
Ans. As per notification no.13/2017-Central Tax dated 28th June 2017, interest @6% are payable under Section 56. The identical rate of interest @6% are payable in cases of refund of pre-deposit. Interest @ 9% are going to be payable in cases of refund falling under proviso to Section 56.
Q.51 How does an order in respect of payment of interest is made under GST?
Ans. Rule 94 of the CGST Rules provide that an order for interest shall be made together with payment advice in Form GST RFD-05, specifying therein the quantity of refund which is delayed, the amount of delay that interest is payable and also the amount of interest payable, and such amount of interest shall be electronically credited to any of the bank accounts of the applicant mentioned in his registration particulars and as laid out in the application for refund.
Q.52 Does interest become due if it's not paid within 60 days of receipt of application or 60 days of acknowledgement?
Ans. Normally, interest becomes payable if claim isn't settled within 60 days of receipt of application. it's to be noted that the date of acknowledgement isn't the date of receipt of application. When an application for refund is submitted, it's transferred to the correct officer for scrutiny of the claim. the correct officer must check for deficiencies if any within the claim and this scrutiny must be completed within 15 days. If the documents are so as, the acknowledgement must lean within 15 days from the date of receipt of application and also the acknowledgement also will show the date of receipt. the amount of 60 days starts from such date of receipt and not from the date when acknowledgement is given which may be any date within 15 days from the date of receipt of application.
Q.53 what's the relevant date within which claim for refund is to be filed?
Ans. The claim for a refund is required to be filed within 2 years from the relevant date. Relevant date is different for various scenarios which is as under:
- within the case of products exported out of India where a refund of tax paid is out there in respect of the products themselves or, because the case could also be, the inputs or input services utilized in such goods, –
- where the goods are exported by sea or air, the date will be on which the ship or the aircraft during which such goods are loaded, leaves India, or
- where the products are exported by land, the date will be on which such goods pass the frontier, or
- Where the products are exported by post, the date will be the on which the despatch of products by the Post Office concerned to an area outside India;
2. within the case of supply of products thought to be deemed exports where a refund of tax paid is offered in respect of the products, the date on which the return referring to such deemed exports is filed;
3. within the case of services exported out of India where a refund of tax paid is obtainable in respect of services themselves or, because the case could also be, the inputs or input services employed in such services, the date of –
- receipt of payment in convertible exchange, where the provision of service had been completed before the receipt of such payment; or
- issue of invoice, where payment for the service had been received beforehand before the date of issue of the invoice;
4. just in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any Court, the date of communication of such judgment, decree, order or direction;
5. within the case of refund of unutilized input reduction under sub-section (3) , the tip of the year during which such claim for refund arises;
6. within the case where tax is paid provisionally under this Act or the foundations made thereunder, the date of adjustment of tax after the ultimate assessment thereof;
7. within the case of someone, apart from the supplier, the date of receipt of products or services by such person; and
8. in the other case, the date of payment of tax.
It is to be noted that for refund claim filed by UN bodies, Embassies etc the relevant date and therefore the period of time within which refund claim is to be filed is laid out in Section 54(2) itself, which is before the expiry of six months from the Last Judgement of the month during which such supply was received.
Q.54 what's the importance of relevant date for the aim of refund?
Ans. Relevant Date assumes significance to determine whether the refund claim has been filed within the amount of limitation envisaged under the law. Thus, every refund claim is required to be filed within 2 years from the relevant date. The relevant date is different for various scenarios. Thus, different relevant date is specified for refund on account of export of products, export of services, accumulated input step-down, finalisation of provisional assessment etc.
Q.55 Does the GST law give recognition to the concept of payment of tax under protest?
Ans. No
Q.56 Can Merchant Exporters or recipient of deemed export supplies claim refund of IGST paid on export of products (exports made out of supplies received from supporting manufacturer/supplies received under advance/EPCG authorization etc)?
Ans. No. it is provided that Rule 96(10) was been inserted, effective from 23.10.2017, in CGST Rules, 2017 through Notification no. 75/2017-Central Tax dated 29.12.2017, in order provide for the refund of integrated tax paid on export of products or services isn't permitted to such persons who have received supplies on which the supplier has availed the good thing about Notification no. 48/2017-Central Tax dated 18.10.2017 or notification no. 40/2017-Central Tax (Rate) dated 23.10.2017 or notification no.41/2017-Integrated Tax (Rate) dated 23.10.2017.
Thus, in respect of deemed export supplies/merchant exports, the choice given under section 16(3) of IGST Act, 2017, gets restricted and thus the zero-rated supplier can only avail of refund of ITC, as per Rule 89, in such cases.
Q.57 Are refunds of IGST on export of products automated under the GST Law?
Ans. Yes. The IGST refund module has an in-built mechanism which will automatically grant refund after successful validation of the Shipping Bill data as available in ICES with the GST Returns data transmitted by GSTN. The matching between the 2 data sources is completed at Invoice level and any mis-match of the laid down parameters returns shows error code.
Q.58 How does the acknowledgment in respect of manual refund claims be provided?
Ans. The refund claim are verified for its completeness and availability of supporting documents. Once completeness altogether respects is ascertained, acknowledgement in Form GST RFD-02 shall be issued within 15 days from the date of filing of application and entry shall be made in the refund register in relation to the receipt of refund applications. The acknowledgement shall be the date of submission of application, since the date for ensuring whether the refund application has been sanctioned within the stipulated period of time.
Q.59 What are the conditions subject to which provisional refund are going to be granted?
Ans. As per the Rule 91 of the CGST Rules, the grant of provisional refund is explained. The provisional refund as per the provisions of section 54(6), shall be granted, provided the condition, that the person claiming refund has, during any period of 5 years immediately preceding the relevant period, for which the claim for refund relates, not been prosecuted for any offence under the Act or under an existing law where the number of tax evaded exceeds 2 hundred and fifty lakh rupees, has been fulfilled.
Q.60 How will provisional refunds be processed?
Ans. the correct officer, after scrutiny of the claim and therefore the evidence submitted in support thereof and on being clear satisfied that the number claimed as refund under sub-rule (1) is because of the applicant in accordance with the provisions of section 54(6), shall make an order in FORM GST RFD-04, sanctioning the number of refund thanks to the said applicant on a provisional basis within a period not exceeding seven days from the date of the acknowledgement under rule 90.
The proper officer is required to issue some payment advice in FORM GST RFD-05 and shall provide for refund that will be electronically credited to any of the bank accounts of the applicant as provided in their registration particulars.
Q.61 Will provisional refund be granted separately under each head or will or not it's combined?
Ans. Provisional refund shall be granted separately for every head Central Tax/State Tax/UT Tax/Integrated Tax/Cess within 7 days of acknowledgement in Form GST RFD-04. Central /Integrated Tax/Cess would be paid by the Centre Tax Authorities and State Tax/UT tax would be disbursed by the State/UT Tax Authorities.
Q.62 How will the right officer satisfy the necessity of condition that the applicant has not been prosecuted for any offence under the Act?
Ans. supported declaration of applicant. Before sanctioning the refund, a declaration is required to be obtained from the applicant regarding non-contravened to Rule 91(1).
Q.63 How does the claims finally gets processed after sanctioning of provisional refund?
Ans. After sanction of provisional refund, the authority shall make the final order within sixty days, from the date of receipt of the entire form.
The proper officer should validate the refund statement details with details in Form GSTR-1 (or Table 6A of Form GSTR-1) available on the common portal. Details of IGST paid, just in case of export of services on payment of IGST, also must be verified from Form GSTR 3 or Form GSTR 3B because the case could also be, filed by the applicant and it must be verified that the refund amount claimed shall be but the tax paid on account of zero rated supplies as per Form GSTR-3 or 3B because the case could also be. just in case of export under bond / LUT, debit to the electronic credit ledger must be checked up.
If the sanctionable amount is a smaller amount than the applied amount or if the refund claim is proposed to be rejected, then a notice should be issued to the applicant in Form GST RFD-08. The applicant needs to reply within 15 days of receipt of notice in Form GST 09. Principles of natural justice will must be followed before making the ultimate decision. Final order are going to be made by the right officer in Form GST RFD-06.
Q.64 How does the final refund sanction order issued?
Ans. the right officer shall issue the refund order manually for each head of taxes. Amount paid provisionally must be adjusted accordingly. Payment advice is required to be provided in FORM GST RFD-05. Refund, if any, are going to be paid by an order with payment advice in FORM GST RFD-05. the main points of the refund on account of Central Tax/Integrated Tax/Cess together with taxpayer checking account details shall be manually submitted in PFMS system by the jurisdictional Division’s DDO along with the signed copy of the sanction order and these documents be submitted to the PAO office for release of payment.
Q.65 Will both SGST and CGST be paid by the identical authority?
Ans. No. The refund application for various taxes i.e. CT/ST/UT/IT/Cess is required be filed thereupon tax authority to whom the taxpayer has been assigned and shall be processed and sanction order for all taxes would be issued by the said authority. However, payment of the sanctioned refund amount shall be made only by the respective tax authority of the Centre or authorities. The payment in resepect of the sanctioned amount in relation to different taxes, shall be made by the Central Tax authority while payment of the sanctioned refund amount in reference to ST/UT would be made by the State Tax/UT tax authority.
Q.66 How does the communication between Central and State tax authorities takes place?
Ans. The refund order is generally issued either by the Central Tax authority or the State Tax/UT Tax authority and the same is communicated to the concerned counterpart tax authority within seven days for the aim of payment of the relevant sanctioned refund amount of tax or cess because the case could also be. so as to facilitate sanction of refund amount of central tax and State tax by the respective tax authorities, it's been decided that both the Central and State Tax authority shall nominate nodal officer(s) for the aim of liasioning through a frenzied e-mail id.
Where the number of central tax and State tax refund is ordered to be sanctioned provisionally/ finally by the Central tax authority and a sanction order is passed in accordance with the provisions of rule 91(2) of the CGST Rules, the Central tax authority shall communicate the identical, through the nodal officer, to the State tax authority for creating payment of the sanctioned refund amount in reference to State tax and the other way around. The aforesaid communication shall primarily be made through e-mail attaching the scanned copies of the sanction order [FORM GST RFD-04 or FORM GST RFD-06], the application for refund in FORM GST RFD-01A and therefore the Acknowledgement Receipt Number (ARN). Accordingly, the jurisdictional proper officer of Central or State Tax, because the case could also be, shall issue FORM GST RFD-05 and send it to the DDO for onward transmission for release of payment. After release of payment by the respective PAO to the applicant’s checking account, the nodal officer of Central tax and State tax authority shall inform one another. the way of communication as referred earlier shall be followed at the time of ultimate sanctioning of the refund also.
Q.67 Who is eligible to file an application for refund on account of supply to SEZs?
Ans. The DTA supplier will must file the refund claim in such cases.
Q.68 under what circumstances, can a DTA supplier file for refund application on account of supplies made to SEZ units?
Ans. The proviso to Rule 89 stipulates that in respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the applying for refund shall be filed by the –
- supplier of products after such goods are admitted fully within the Special Economic Zone for authorised operations, as endorsed by the desired officer of the Zone;
- supplier of services together with such evidence regarding receipt of services for authorised operations as endorsed by the required officer of the Zone:
Thus, proof of receipt of products or services as evidenced by the required officer of the zone may be a pre-requisite for filing of refund claim by the DTA supplier.
Q.69 What supporting documents are required to be filed by the DTA supplier in an exceedingly refund claim?
Ans. The claim needs to be filed together with the subsequent documents
- a press release containing the amount and date of invoices as provided in rule 46 together with the evidence regarding the endorsement laid out in the second proviso to sub-rule (1) within the case of the provision of goodsmade to a Special Economic Zone unit or a Special Economic Zone developer;
- an announcement containing the amount and date of invoices, the evidence regarding the endorsement per the second proviso to sub-rule (1) and therefore the details of payment, together with the proof thereof, made by the recipient to the supplier for authorised operations as defined under the Special Economic Zone Act, 2005, in an exceedingly case where the refund is on account of supply of servicesmade to a Special Economic Zone unit or a Special Economic Zone developer;
- a declaration to the effect that the Special Economic Zone unit or the Special Economic Zone developer has not availed the input diminution of the tax paid by the supplier of products or services or both, in a very case where the refund is on account of supply of products or services made to a Special Economic Zone unit or a Special Economic Zone developer.
Q.70 Can the DTA supplier apply for availment of provisional refund?
Ans. As per Section 54(6) of the CGST Act, the right officer may, within the case of any claim for refund on account of zero-rated supply of products or services or both made by registered persons, aside from such category of registered persons as could also be notified by the govt. as made on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the entire amount so claimed, excluding the number of input decrease provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as is also prescribed and thereafter shall make an order for final settlement of the refund claim as provided under sub-section (5), after due verification of documents furnished by the applicant.
Thus DTA suppliers making zero rated supplies to SEZ units are entitled for provisional refund of 90%.
Q.71 How will the number of claim (of ITC) be calculated?
Ans. The claim (of accumulated ITC) are calculated using the subsequent formula
Refund Amount = (Turnover of zero-rated supply of products + Turnover of zero-rated supply of services) x Net ITC ÷Adjusted Total Turnover
Q.72 What are the documents to be filed together with the claim of refund on account of deemed exports, if the claim is to be filed by the supplier?
Ans. just in case such refund is sought by the supplier of deemed export supplies, the documentary evidences required to be furnished are as follows -
- Acknowledgment by the jurisdictional Tax officer of the Advance Authorisation holder or Export Promotion Capital Goods Authorisation holder, because the case could also be, that the said deemed export supplies are received by the said Advance Authorisation or Export Promotion Capital Goods Authorisation holder, or a replica of the tax invoice under which such supplies are made by the supplier, duly signed by the recipient Export Oriented Unit that said deemed export supplies are received by it.
- An undertaking by the recipient of deemed export supplies that no input step-down on such supplies has been availed of by him.
- An undertaking by the recipient of deemed export supplies that he shall not claim the refund in respect of such supplies and therefore the supplier may claim the refund.
The procedure regarding procurement of supplies of products from DTA by Export Oriented Unit (EOU)/Electronic Hardware Technology Park (EHTP) Unit / Software Technology Park (STP) Unit / Bio-Technology Parks (BTP) Unit regarded as deemed export, shall be complied with.
Q.73 What are the documents to be filed together with the claim of refund on account of deemed exports, if the claim is to be filed by the recipient?
Ans. just in case the refund is filed by the recipient of deemed export supplies, an undertaking by the supplier of deemed export supplies that he shall not claim the refund in respect of such supplies is additionally required to be furnished manually.
The procedure regarding procurement of supplies of products from DTA by Export Oriented Unit (EOU) / Electronic Hardware Technology Park (EHTP) Unit / Software Technology Park (STP) Unit / Bio-Technology Parks (BTP) Unit regarded as deemed export as, shall be complied with.
Q.74 what's going to be the eligible amounts for refund just in case of deemed exports?
Ans. While filing RFD-01A (recipient of deemed exports), taxpayers have to enter the quantity that they need to urge as refund. very cheap of the subsequent three categories are eligible for refund.
- Balance within the Electronic Credit Ledger
- ITC availed for the actual tax period
- Amount as provided by the taxpayer under the refund claim matrix.
Q.75 just in case the supplier claims refund on account of deemed export supplies, will the recipient be eligible for refund of ITC in respect of other inputs/input services which are utilized in making zero rated supply?
Ans. Yes. As per Rule 89(4A) within the case of supplies received on which the supplier has availed the advantage of notification No. 48/2017-Central Tax dated the 18th October, 2017, refund of input reduction, availed in respect of other inputs or input services utilized in making zero-rated supply of products or services or both, shall be granted.
Q.76 what's the Procedure to be followed just in case of Deemed Exports?
Ans. As per the Rule 89 of the CGST Rules, 2017, either the recipient or supplier of such supplies are allowed for refund of tax paid thereon.
In respect of supplies made to EOU / EHTP / STP / BTP units, the subsequent procedure and safeguards are prescribed –
- The r
