Refund under GST
Characteristics of refund procedure under GST:
Under GST refund of excess GST paid or erroneously paid is time bound procedure led by a simplified and technology driven exercise with minimal human interface. An application has to make in FORM GST RFD – 01 online with requisite documents. However, refund claim arising from balance in Electronic Cash Register can be made through the filing of regular return.
When a claim of refund arises under GST:
Following are the few cases wherein refund claim might arise under GST:
- Mis-calculation or wrong calculation leading to excess payment of GST: The chances of such calculation are minimal as complete process of filing GST return is technology driven. However, such error may arise if wrong tax is selected at the filing of GST return.
- Export / deemed export of goods / services: GST being a destination based consumption tax and hence if any goods and / or services is not consumed within India and same can’t be taxed in India and hence supplies are Zero rated. Any tax, if any paid, may be refunded to taxpayer.
- SEZ supply: Supply of goods and / or services to units located in SEZ area are also termed zero rated supply and hence above consequences of export will also apply here.
- Refunds may arise due to judgment of appellate authority or court.
- Refund may arise at the time of finalization of provisional assessment
When a refund claim can be filed on GST portal:
Refund claim under GST can be filed within 2 years from relevant date. Relevant date depends on facts of each case and can be summarized as below:
| Case | Activity to be completed | Relevant date shall be counted from | Other |
| Export of goods – By sea or air |
Export manifest or export report is delivered u/s 41 of the customs act. | Ship or aircraft loaded with goods leaves India. | |
| Export of goods – By land |
Export manifest or export report is delivered u/s 41 of the customs act. | Goods passes the frontier | |
| Export of goods – By Post |
Postal receipt is received from post | The goods dispatch to outside India | |
| Export of services – Services completed prior to receipt of payment |
Actual supply of services completed and consideration in convertible foreign exchange is received | The date of receipt of payment in convertible foreign exchange. | |
| Export of services – Advance receipt of payment |
Invoice must be issued | The date of issue of invoice | |
| Supplies to SEZ unit or developer | Goods / services have been admitted in full by such SEZ or developer of such SEZ. | The date of payment of tax. | |
| Deemed Export | Return relating to such deemed export is furnished. | The date of filing of such return. | The application for refund of GST shall be filed by the recipient of deemed export. |
| Refund arising due to judgment, decree, order or direction of AA, AT or any court | Such judgment etc must be communicated to parties concern | The date of such communication | |
| Unutilized input tax credit in electronic credit ledger | The end of financial year in which such claim for refund arises | ||
| Provisional Payment of tax | Completion of final assessment | The date of adjustment of tax after the final assessment | |
| Other case | The date of payment of tax | ||
| Person other than supplier | The date of receipt of goods or services |
It is worth to note that acknowledgment of Refund application by the deportment in prescribed formant is mandatory within the prescribed time.
Manner of issue of refund:
| Refund type | Activity precedence | Time limit | Refund amount | Condition |
| Provisional Refund | The date of acknowledgment | 7 days | 90% | Person claiming refund has not been prosecuted earlier. |
| Delay in granting refund | Beyond 60 days | Interest @ 6% will be payable to assessee |