GST Official Refund Procedure: All You Need to Know

There are various rules and regulations which have emerged in the GST refund process. The GST refund will be needed to maintain under the GST as even a slight delay in the refund process will impact the working capital and cash flow of the manufacturers and exporters. In the current scenario, there is a delay in refunds extending for months by making refunds available to the concerned manufacturers and exporters, and to get the refunds, it is a challenge as there are strict rules and regulations for the processing of refunds.

Latest Update

23rd December 2021

“CBIC has showcased an advisory related to the Aadhaar authentication for filing of GST refund/Revocation of cancelled applications of registration from 1st January 2022. Read more“

9th December 2021

The high court of Madras state prolonged time of limitation and relief to traders on goods and services tax refund claims. read order

18th May 2021

• “Seeks to prescribe Standard Operating Procedure (SOP) for implementation of the provision of extension of time limit to apply for revocation of cancellation of registration under section 30 of the CGST Act, 2017 and rule 23 of the CGST Rules.” Read Circular

Compulsory to Match Invoices for Exporters GST Refund Issues

Numerous exporters are facing problems in claiming ITC (Input Tax Credit) as the government made it compulsory to match GST Invoices for the claim. Experts say that the situation is the result of late fees waiver of certain forms for companies and suppliers. Under several cases, exporters were unable to claim ITC as forms were not submitted. A corresponding invoice is to be uploaded on the GST portal claiming ITC. All the invoices should be reflected in form GSTR- 2A Find out the full procedure and functionalities of GSTR 2A form with the help of Gen GST software version 2.0. The process is showcased by a simple PDF format. Read more

There are Various Situations for Refund under GST like:

• Excess amount payment of tax accumulated due to mistake or misinterpretation
• Export (also deemed export) of goods/services within the claim of rebate or Refund of collected input credit of duty/tax when goods/services are exported
• Finalization of provisional assessment
• Refund of Pre-deposit for filing appeal assimilating refund coming in pursuance of an appellate authority’s order
• Payment of duty/tax during the investigation but no/ less liability arises in the event of finalization of investigation/adjudication
• Refund of tax paid on purchases done by Embassies or UN bodies
• Credit collection due to output being tax exempt or nil-rated
• Credit collection due to inverted duty structure i.e. due to tax rate differential between output and inputs
• Year-end or volume based incentives provided by the supplier through credit notes
• Tax Refund Simple steps to claim and know the status of income tax return refund online on government income tax website. Find the full process enclosed with the article. Read more for Foreign Tourists

Read Also: How to File GST Refund Claims Manually? Step by Step Guide Know how to file GST refund claims manually by using GST refund form RFD-01A. We have explained step by step procedure in a brief manner. Read more

There is an Official Refund Process under the GST:

• An Application form to claim a refund can be filed through the GSTN portal
• An acknowledgement number will be given to the applicant by the means of SMS or email when the application is filed electronically
• The changes will be made to return and cash ledger and decrease the “carry-forward input tax credit” automatically
• Refund application and relevant documents presented must be scrutinized and adhered accordingly within a period of 30 days of filing the refund application
• The issue of “unjust enrichment” will be analyzed for reach refund application. In the case of non-qualification, the refund would be transferred to CWF (consumer welfare fund)
• If a refund amount stated crosses the predetermined amount of refund then the file will through the pre-audit process for sanctioning the refund
• Refund will be credited electronically to the account of an applicant via ECS, RTGS or NEFT
• The application for refund can be made after every quarter
• An amount less than 1000 is not eligible for the refund

Trending Topic: Do You Know about GST E-Way Bill and How it Will Generate? Get to know about GST E Way bill and its generating process through online and SMS in a simple manner. Also, we have attached original screenshots of official E way bill portal for better understanding. Read more

Delay in Refund and its Process

Subramanian committee suggested along with the defined GST laws and regulations, that the refund application must be entertained within the period of 90 days and must be processed in the same time period. If in any case the application could not be processed within the given time framework, there is a 6 percent of interest recommended along with the refund amount.

It was also mentioned by the Nirmala Sitharaman (finance minister) who cleared that the refund process will be done within the period of 7 days and if the process gets late for more than 2 weeks then the refund will be provided along with the interest.

It is speculated that the process of refund application will be fast and smooth due to its digital dependability. Also, the data will be uploaded electronically which depicts that the verification and the detailed analysis of the refund application will be quick.

Latest Updates and News on GST Refund Topic

GST Refund in Hilly Areas Under Scanner

Taxpayers in hill area and stations are set to approach the court against revenue department which has found a reversal of transitional credit benefited by them on account of cash balance available in the ledger ahead of GST implementation in the country.

The department has not distributed the available GST refunds to producers and manufacturers of hilly states. Previously before GST implementation, under the area-based exemption scheme, the manufacturers were provided with tax concessions.

The department now mentions that the transitioning provision available under newly implemented indirect tax regime was referred only to the excess credit available with the taxpayers, and it did not apply to the ledger for cash balance.

Furtherly, finance secretary also mentioned that the Cash credit can not undergo into GST as only Input Tax Credit can be accountable for transition under GST regime.

GSTN Intends to Launch Online Application for Refunds

The GSTN organization also under inclusion to launch an online application to process refunds. Chief Executive Officer Prakash Kumar stated that “A separate online app for claiming Integrated GST refunds for August and September would be made available on GSTN portal.” The application will be giving facilities like save and upload sales data of the GSTR 1.

The automated process will be also there to assist in which the data will be extracted and will be to the customs department after digital signature. The details will be validated by the department and further refund process will be initiated accordingly.

GST Refund Advice for Taxpayers

General Queries on GST Refund