In this section, the refund process for certain specialized foreign agencies and organizations is discussed. Unlike the regular dealers or export dealers under GST regime, the Government provides distinct benefits and procedures for these agencies and organizations.
Organisations like Agencies of United Nations (UN), Multilateral Financial Institutions, Embassies of foreign countries, Foreign Diplomatic Missions and other similar bodies are kept under this ambit. The Government allows a refund of taxes paid on the goods and services availed by them after payment of taxes provided that the goods or services (or both) procured are utilized for their official use.
The supplies made to these agencies or organizations are exempt from tax by definition. The Government has prescribed a process through which this exemption is provided through a refund mechanism.
What can be claimed as a refund?
For any supplies made to the above-stated bodies or organizations (goods or services or both), the component of tax charged on such supplies can be claimed as a refund by these organizations.
The mechanism works in a way where the person making such supplies would charges taxes on the invoice and remit the same to the Government. At a later stage, these bodies and organizations can claim a refund of such taxes paid on the supplies.
The bodies (referred to here) are required to obtain a UIN (Unique Identification Number) in their name. This UIN is required to be quoted on the invoices while making the supplies and also on the GSTR-1 while filing the same by the supplier (dealer). Also, only the taxes on supplies for a value of Rs. 5,000 or above (without including the tax component) are eligible for the refund.
Time limit to claim a refund
All the claims for such refunds by these bodies and organizations shall be made within six months from the last day of the month in which such supply is received.
For example: Rahul supplies 3,000 pieces of latex gloves to World Health Organisation on 16th April, 2018 after charging applicable GST. He receives the payment for the same on 29th April, 2018. While filing the GSTR-1 for the month of April, 2018, he appropriately mentions WHO’s UIN and files his return.
In the given scenario, WHO can claim the refund of GST paid on latex gloves latest by 31st October 2018 (i.e. six months from the last date of April viz. 30th April 2018).
Procedure to claim the refund
For any refund claim to be made by these bodies, a refund application in Form GST RFD-10 has to be filed on the quarterly basis. The application can be filed either through the electronic GST portal or manually through a facilitation center.
Along with the refund application as stated above, a statement containing details of inward supply of goods and services (or both) in Form GSTR 11 is to be submitted. Please click here to know more about the procedure for filing Form GSTR-11.
On successful submission of the refund application, an acknowledgment will be made available in Form GST RFD-02.
The format of GST RFD-10
The form necessarily has 8 sections. We have explained each section below for the ease of understanding for the details to be filled in:
- UIN – This section requires the applicant to mention the Unique Identification Number allotted to such agency, body or organization by the authorities. The UIN is an exclusive number which would help in precise identification of the registered entity applying for the refund.
Name – The name of such body is to be mentioned which shall be the same as in the registration obtained with UIN and similar name should appear in the Invoice obtained for goods or services procured.
Address – Registered address of such organization which shall be same as the one mentioned while obtaining registration / UIN.
Tax period – The period for which refund application is being filed i.e. the Quarter for which application corresponds to. The date on which such quarter begins and date on which such quarter ends shall be mentioned in <DD/MM/YY> format.
Amount of refund claim – The total amount being claimed as a refund shall be mentioned first in numerics and then in words. The currency in which such refund is claimed shall always be INR (Indian Rupee). The breakup of such taxes paid which is being claimed as refund should also be mentioned i.e. paid as CGST, as SGST, as IGST, as Cess and the total of all the above.
Details of Bank account – The details of the bank account to which the refund shall be remitted have to be mentioned, the following details are required:
- Bank account number
- Bank account type - (for example savings, current, etc.)
- Name of the Bank
- Name of the account holder/operator – The name in which bank account is operated
- Address of Bank branch – The address of bank’s branch in which such account is maintained
- IFSC code
- MICR code
Reference no. and date for GSTR-11 – The reference number as in the acknowledgment for filing GSTR-11 and date on which it was filed is to be mentioned.
Verification – In the blank space, the name of the person acting as such organization’s representative is to be mentioned i.e. the person making such refund application. The name of such body or organization is also to be mentioned in this section’s first sentence. In the second paragraph of this section, the agency/ body/organization which is applicable shall be marked.
After filing all the above-stated details, the form should be dated and signed by the authorized signatory along with his / her designation and place of filing shall be mentioned.
Processing of refund
On the successful filing of refund application and submission of GSTR-11 appropriately the authorities would verify the details furnished in these forms. If everything is in order and appropriate, the refund will be processed and remitted directly to the bank account mentioned in the refund application (GST RFD-10).