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The GST refund process requires the taxpayer to follow elaborate steps, submit documents and declaration if required, to the GST authorities for claiming a GST refund. The refunds under GST can be the cash balance in the electronic cash ledger deposited in excess or tax paid by mistake or the accumulated Input Tax Credit (ITC) unable to be utilised for tax payments due to zero-rated sales or inverted tax structure.
The forms in which a GST refund is claimed varies according to the type of GST refund being claimed. For instance, the refund of IGST in exports (with tax payment) can be claimed by only reporting details in the GSTR-1 and GSTR-3B. Whereas the refund of cash paid in excess of the electronic cash ledger can be claimed by applying in form RFD-01. Therefore, the steps or the process differs with the type of GST refund.
05th July 2022
Taxpayers can exclude the COVID pandemic period (1st March 2020 and 28th February 2022) while calculating the time limit for filing GST refund applications under Sections 54 or 55 of the CGST Act.
1st February 2022
Budget 2022 update-
1. Section 54 is amended to provide that refund claim of any balance in the electronic cash ledger can be made in a particular form and manner prescribed.
2. The time limit to claim refund by UN agencies is now two years from last day of quarter when supply was received instead of six months.
3. The restriction to refund taxpayers for tax defaults, that earlier applied to unutilised ITC refund, is now extended to other types of refunds.
4. The relevant date to file refund claim application for supplies to SEZ is clarified in new sub-clause (ba) of clause (2) of the explanation.
1st May 2021
Where the time limit to pass orders for rejecting any refund claim fully or partly falls between 15th April 2021 and 30th May 2021, it is extended. The extended time limit shall be later of two dates:
(1) 15 days after reply to notice OR
(2) 31st May 2021
Refund pre-application is a form that taxpayers must fill out to offer information about their business, Aadhaar number, income tax details, export data, expenditure and investment, and so on. Taxpayers must file this pre-application form for all types of GST refund. This form need not be signed and cannot be edited once submitted. Hence, the user must be careful while entering the details.
The two steps involved in filing the GST refund pre-application form are as follows:
Step 1: Log in to the GST portal, go to the ‘Services’ tab, click on ‘Refunds’ and select the ‘Refund pre-application form’ option.
Step 2: On the page displayed called ‘Refund pre-application form’, fill in the details asked, and click on ‘Submit’. A confirmation of submission will be displayed on the screen.
The following details must be reported:
Exports are considered as ‘Zero-rated supplies’ under GST. Hence, the tax paid (IGST and cess, if any) is eligible for a refund by the exporter. Since the quantum of transactions can be huge in exporters, the GST portal facilitates a simpler process of GST refund. No separate application in form RFD-01 is required in this case. Certain conditions must be satisfied by the exporter for a GST refund.
Firstly, Table 6A in GSTR-1 must be filled up with Shipping bill details related to export transactions (with payment of tax) and filed by the due date. Secondly, the summary details must be reported in item 3.1 (b) of Table 3.1 of GSTR-3B, the corresponding tax must be paid, and the return should be filed by the due date prescribed by GST law.
In the export invoice data provided under Table 6A of Form GSTR-1, the correct and complete shipping bill number, shipping bill date, and port code details must be provided. It should be noted that export transactions carried out in a tax period must be filed in the GSTR-1 and GSTR-3B of the same relevant tax period. Care must be taken to report the total of IGST and cess as a figure equal to or higher in Table 3.1 of GSTR-3B than Table 6A and Table 6B of GSTR-1.
The GST authority considers the shipping bill as a refund application. The GST portal sends export details to the ICEGATE as disclosed on GSTR-1. Also, a confirmation that GSTR-3B was filed for the relevant tax period is sent. The Customs system compares the information on GSTR-1 to the information on their shipping bill and Export General Manifest (EGM) and then processes the refund.
The ICEGATE system will share payment information with the GST portal once the refund payment has been credited to the taxpayers’ accounts. The GST portal will share the information with the taxpayers by SMS and e-mail.
RFD-01 must be filed for the following types of GST refund claims:
Care must be taken to declare consistent information of the invoices in both GSTR-1, where it applies, and RFD-01. A certificate by a chartered accountant/cost accountant needs to be submitted along in certain cases.
Follow the below steps to file a refund application in RFD-01:
Step 1: Log in to the GST portal and go to the ‘Services’ tab, click on ‘Refunds’ and select the ‘Application of refund’ option.
Step 2: In the page that appears, select the reason for refund or the type of refund and click on ‘Create refund application’.
Step 3: Select the period for which a refund is to be applied and select ‘Yes’ or ‘No’ on the dialogue box- ‘If you want to file a nil refund’.
In case of nil refund application, the taxpayer can checkmark the declaration and proceed to file using either DSC or EVC.
This step is not applicable in types of refunds such as excess cash balance in the ledger, intrastate supply later held as interstate supply and vice versa, assessment or provisional assessment or appeal or any other order.
Step 4: Enter the details on the relevant page that gets displayed, based on the type of refund selected in the previous step.
Enter the amount of cash to be claimed as a refund.
Enter details of the GSTR-3B in which such tax payment was done in cash.
Download Statement 3 and enter the details of export invoice documents on which refund is claimed.
Generate the JSON file and upload it on the GST portal. Validate errors, if any.
In the column, ‘Computation of Refund to be claimed Statement-3A [rule 89(4)]’, enter aggregate turnover, adjusted total turnover and net input tax credit.
Validations take place to compute the maximum amount of refund that the taxpayer is eligible for.
There is a prerequisite that GSTR-1 and GSTR-3B of the selected period must be filed. The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 5. A CSV file can be uploaded instead of JSON.
Inverted tax structure means the tax rate and amount paid on inputs are higher than the outputs. The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 1A. Thereafter, enter details such as turnover of inverted rated supply, tax payable, adjusted total turnover and net input tax credit.
The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 5B. Thereafter, enter details such as net input tax credit of deemed exports and the refund to be claimed.
The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 4. The refund amount will get auto-populated based on the statement uploaded.
The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 6. The refund amount will get auto-populated based on the statement uploaded.
The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 5B. The refund amount will get auto-populated based on the statement uploaded.
The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 2. The refund amount will get auto-populated based on the statement uploaded.
Make the selection of the type of order and enter details of the same, as per the screenshot given below.
Reasons could be excess interest paid via GSTR-3B. Mention the reason for refund specifically in 200 characters along with the amount.
Step 5: Enter bank account details for the refund, upload the supporting documents and declaration, in refund types that mandate it.
Up to 10 supporting documents can be uploaded, with file size limited to 5 MB each.
Preview the application and click on ‘Save’. The saved application remains for 15 days for the taxpayer’s action. Click on the ‘Proceed’ button after checking the boxes against undertaking and self-declaration.
Step 6: File RFD-01 using EVC or DSC.
Application reference number or ARN gets generated and displayed on the screen. Taxpayers can track using this number. The ARN is also sent to the email address and mobile number.
The refund application is thereafter assigned to the refund processing officer. It will be processed, and the refund status gets updated.
There are two ways in which refunds can be claimed:
In the first case, go to GSTR-11 already filed by selecting the tax period/quarter. Click on the ‘Generate RFD-10’ button.
Select the embassy or organisation radio button and click on the ‘Create’ button. Table ‘Details of the tax paid on purchases as reported under GSTR-11’ will have amounts as auto-populated from the return of the respective period, editable as well.
Preview and submit using DSC or EVC.
In the second case, on the dashboard after logging in to the GST portal, go to the services tab and select refunds. Thereafter, choose the ‘Application for refund’ option.
On the page that gets displayed, choose ‘Embassy/International Organisation’ as the option and click on ‘Create’.
The details of tax paid eligible for refund get auto-populated from GSTR-11, already filed.
Verify and edit or enter the refund amount.
The rest of the steps remain the same as the first case.
The application filed by a refund applicant or taxpayer will appear on the dashboard of the tax officer or refund processing officer as a pending work item. He or she will verify and scrutinise the application along with the documents.
Filed applications can be tracked using the “Track Application Status” under Refunds. After inspection by a GST authorities refund amount will be credited to the applicant bank account.
Following will be the officer’s actions: