If any excess GST has been paid or there is any input tax credit which has not been utilised, a person can claim refund under Section 54 of the excess GST paid by filing an application for the same online. To ensure that the excess GST paid does not get blocked with the Govt., rules have been framed for quick release of the GST Refund.

Who can claim GST Refund?

A claim of GST Refund can be file under the following circumstances:-

  1. Excess GST paid due to mistake
  2. Export of Goods or Services
  3. Supplies to SEZ units and developers
  4. Deemed Exports
  5. Refund of pre-deposit
  6. Refund of accumulated Input Tax Credit on account of inverted duty structure
  7. Refund of taxes on purchase made by the UN or embassies etc.
  8. Finalisation of provisional assessment
  9. Refund arising on account of Judgement, Decree, Order or Direction of the Appellate Authority, Appellate Tribunal or any Court.
  10. Refund to International Tourists of GST paid on goods in India and carried abroad at the time of their departure from India.
  11. Refund on account of issuance of refund vouchers for taxes paid on advances against which, goods or services have not been supplied.
  12. Refund of CGST & SGST paid by treating the supply as intra-state supply which is subsequently held as Inter-state supply and vice-versa.

How to claim GST Refund?

An application for GST Refund shall be filed online in form GST RFD 01 and shall be filed within a maximum of 2 years from the relevant date.

Once an application has been filed, it would be forwarded to the GST officer who will within a period of 15 days of filing of the application scrutinise the application for its completeness and if the application is found to be complete in all aspects, an acknowledgement in Form GST RFD 02 shall be made available to the applicant through the GST Website i.e. gst.gov.in. The GST RFD 02 issued will clearly mention the date of filing of the claim for refund and the time period for refund shall be counted from this date.

In case any discrepancies are found in the GST Refund application, the GST officer shall communicate the deficiencies to the applicant in Form GST RFD 03 through the GST website.

Meaning of Relevant Date for filing GST RFD 01

The relevant date would be different in different cases and the same has been mentioned below

Reason for Claiming the GST Refund Relevant Date
Goods are exported through Air or Sea Date on which the Ship / Aircraft leaves India
Goods are exported by a land vehicle Date on which the Goods cross the land frontier of the country
Goods are exported through post Date of dispatch of goods from the Post Office
Supplies include services which are completed before the receipt of payment Payment Receipt Date
Services are performed after the receipt of advance Invoice Date
Refund claim made for excess Input Tax Credit unutilised End of the Financial Year for which the refund claim is being made
Goods are supplied for deemed exports i.e. supply to SEZ or 100% EOU Return filing date relating to such deemed exports
Refund arises due to an order passed in favour of the appellant Date of such order
Tax was paid based on provisional assessment and now refund arises Date on which such tax was adjusted
When the person claiming the refund is not the supplier Date on which the goods are received by such person
All other cases Date of Payment of Tax

Within how much time is GST Refund issued?

In case of Refund due to Zero Rated Supplies like Exports, the GST officer will sanction the 90% of the amount of GST Refund on provisional basis within 7 days.

The refund on provisional basis shall be issued in Form GST RFD 04 within 7 days from the date of acknowledgement. The acknowledgement is normally issued within 15 days but in case of refund of integrated tax paid on zero rated supplies, the acknowledgement would be issued within a period of 3 days.

The GST Officer will make a GST Refund payment advice in Form GST RFD 05 and the same shall be electronically credited to any of the bank accounts of the applicant mentioned in his registration particulars and as specified in the application for refund.

The provisional refund would not be granted to a person who was prosecuted during any period of previous 5 years preceding the refund period or under any existing law where the amount of tax evaded exceeds Rs. 2.5 Lakhs.

The balance refund shall be issued within 60 days. If the refund is not issued within 60 days, interest @6% p.a. under Section 56 would be payable from the 61st day. The order for refund would be made in GST RFD 06 and payment advice issued in GST RFD 05 specifying the amount of refund which is delayed, the period of delay and the amount of refund payable. The interest amount would be electronically credited to the bank account of the applicant.

In case the GST Officer is of the view that the whole or any part of the amount claimed as refund is not admissible or is not payable to the applicant, he shall issue a notice in Form GST RFD 08 to the applicant. The applicant would be required to reply to such a notice in Form RFD 09 within a period of 15 days of the receipt of such notice.

After receiving the response of the applicant, the GST Officer shall make an order in GST Form RFD 06 sanctioning the amount of refund in whole or in part, or rejecting the said refund claim. This order would be made available to the applicant electronically. No application for refund shall be rejected without giving the applicant an opportunity of being heard.

What are the Documents to be submitted for GST Refund

The GST RFD 01 shall be accompanied by the following documentary evidences, as applicable, in Annexure 1:-

  1. The reference number of the order and a copy of the order passed by the proper officer or an appellate authority or appellate tribunal or court resulting in such refund or reference number of the payment of the amount claimed as refund, or
  2. A statement containing the number and date of shipping bill or bills of export and the number and the date of relevant export invoices, in a case where the refund is on account of export of goods, or
  3. A statement containing the number and date of invoices and the relevant bank realisation certificates or foreign inward remittance certificates, as the case may be, in a case where the refund is on account of export of services, or
  4. A statement containing the number and date of invoices along with the evidence regarding the endorsement in the case of supply of goods made to a SEZ unit or a SEZ developer.
  5. A statement containing the number and date of invoices, the evidence regarding the endorsement specified and the details of payment, along with the proofs thereof, in a case where the refund is on account on account of supply of services made to a SEZ unit or a SEZ developer.
  6. A declaration to the effect that the SEZ unit or the SEZ developer has not availed the input tax credit of the tax paid by the supplier of goods or services or both, in a case where the refund is on account of supply of goods or services made to a SEZ or a SEZ developer.
  7. A statement containing the number and date of invoices along with such other evidence as may be notified in this behalf, in a case where the refund is on account of deemed exports, or
  8. A statement containing the number and the date of the invoices received and issued during a tax period in a case where the claim pertains to refund of any unutilised input tax credit where the credit has accumulated on account of the rate of tax on the inputs being higher than the rate of tax on output supplies, other than nil rated or fully exempt supplies, or
  9. The reference number of the final assessment order and a copy of the said order in a case where the refund arises on account of finalisation of provisional assessment, or
  10. A statement showing the details of transaction considered as intra-state supply but which is subsequently considered as inter-state supply, or
  11. A statement showing the details of the amount of claim on account of excess payment of tax

Certificate from Chartered Accountant/ Cost Accountant

In case the GST Refund claimed exceeds Rs. 2 Lakhs – A certificate in Annexure 2 of Form GST RFD 01 issued by a chartered accountant or a cost accountant to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund exceeds Rs. 2 Lakhs shall also be submitted. For the purpose of this rule, where the amount of tax has been recovered from the recipient, it shall be deemed that the incidence of tax has been passed on to the ultimate consumer.

In case the GST Refund claimed does not exceed Rs. 2 Lakhs – a declaration to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person shall also be furnished.

GST Refund in case of Exports

90% Refund of Integrated GST paid on Exports would be granted within 7 days and the balance within 60 days.

The GST refund would always arise in case Export of Goods/Services is done without submission of Bond/LUT and IGST has been paid on such exports.

In case the exports are done after the submission of Bond/LUT, no IGST would be applicable. In such cases, refund of accumulated Input Tax Credit on expenses may arise.

The procedure and rules to be followed in case of GST Refund on account of Export would remain the same as explained above. Certain other points are also required to be kept in mind as discussed below.

GST Refund in case of Exports without payment of IGST

In the case of exports of goods or services or both without the payment of tax on submission of Bond/LUT, the refund of input tax credit shall be granted as per the following formula:-

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

Where,

  1. “Refund amount” means the maximum refund that is admissible;
  2. “Net ITC means input tax credit availed on inputs and input services during the relevant period;
  3. “Turnover of zero rated supply of services” means the value of zero rated supply of services made without payment of tax under bond or LUT
  4. “Turnover of zero rated supply of services” means the value of zero rated supply of services
  5. “Adjusted total turnover” means the turnover excluding the value of exempt supplies other than zero rated supplies, during the relevant period
  6. Relevant period means the period for which the application for refund has been filed

GST Refund of Input Tax Credit

GST Refund of Input Tax Credit arises in the following 3 circumstances:-

  1. Input Tax Credit unutilised when the goods/services supplied are zero rated or exempted from GST.
  2. Where the input goods/services have a higher tax rate and output goods/services have a lower tax rate.
  3. In case of partial reverse charge, where the input tax credit cannot be used completely against the output tax.

The refund of input tax credit in such cases shall be granted as per the following formula:-

Maximum Refund Amount = {(Turnover of inverted rate of supply of goods) x (Net ITC ÷Adjusted Total turnover} – Tax payable on such inverted rated supply of goods

Other Relevant Points

  1. No refund shall be issued in case the amount of refund is less than Rs. 1,000
  2. In cases where the application for GST Refund relates to refund of Input Tax Credit, the electronic ledger shall be debited by the applicant by an amount equal to the refund so claimed.
  3. Any claim for GST Refund relating to balance in the Electronic Cash Ledger may be made through the return furnished for the relevant tax period in Form GSTR 3 or Form GSTR 4 or Form GSTR 7.
  4. In case of Refund due to Casual Taxable Person or to a non-resident taxable person on account of advance tax deposited, such refund shall not be granted unless such person has filed all returns for the entire period for which the certificate of registration was granted to him.
  5. UN Bodies and embassies can claim refund of the GST paid by them on their expenses within a period of 6 months from the end of the quarter in which such supply was received.
  6. Tourists can also claim a refund of the GST paid by them during their stay in India. The term “tourist” has been defined and refers to any person who is not normally a resident of India and who enters India for a stay of not more than 6 months for legitimate non-immigrant purposes.