Guide to GST Refund Claims

To request a GST refund, the taxpayer must submit the necessary paperwork and declarations to the GST authorities. The electronic cash ledger’s excess cash balance, unintentionally paid taxes, and accumulated Input Tax Credits (ITC) that cannot be applied to tax payments because of zero-rated sales or an inverted tax structure are examples of places where GST refunds may be made. The forms used to claim a GST refund differ depending on the type sought.

Steps to submit a refund pre-application form 

Taxpayers must fill out a form with details about their company, Aadhaar number, income tax information, export data, expenses and investment information, etc. Taxpayers must submit a pre-application for all types of GST refunds. No signature is required, and the form cannot be changed once submitted. As a result, the user must exercise caution when entering the information.

There are two steps to the pre-application form:

Step-1 

Log in to the GST portal, navigate to the ‘Services’ tab, then to ‘Refunds,’ and then to the ‘Refund pre-application form.’              

Step-2 

Fill in the details requested on the ‘Refund pre-application form’ page and click ‘Submit.’ A submission confirmation message will appear on the screen.

The following details are to be mentioned:

•  Nature of business: Manufacturer, merchant exporter, trader, and service provider
• Date of issue (of IEC): Those requesting a refund on account of exports (without paying tax) must provide the date the Import Export Certificate was issued.
• The aadhaar number of the primary authorized signatory is obligatory.
• Value of exports made during the 2019–2020 fiscal year (exclusively for exporters): The GSTIN level, not the PAN level, must be used to calculate this.
• The fiscal Year 2018–2019 income tax payments
• Tax advance for the 2019–2020 fiscal year.
• Invested in and made capital during the 2018–2019 fiscal year.

Refund process of IGST paid on export goods (with tax payment)

Exports are categorized as “zero-rated supplies” under the GST. As a result, the exporter is qualified for a tax refund (IGST and any cess, if any).

Because the volume of transactions in exporters can be large, the GST portal simplifies the GST refund process. In this case, no separate application in form RFD-01 is required.

For a GST refund, the exporter must meet certain conditions:

• Table 6A in GSTR-1 must be filled out with information about shipping bills for export transactions (including tax payment) and submitted by the deadline.
• The return must be filed by the GST deadline, the required tax must be paid, and the summary information must be included in item 3.1 (b) of Table 3.1 of GSTR-3B.
• The correct and complete shipping bill number, date, and port code details must be provided in the export invoice data in Table 6A of Form GSTR-1.
• Note that export transactions completed during a tax period must be reported on the GSTR-1 and GSTR-3B forms for the same tax period.
• In Table 3.1 of GSTR-3B rather than Tables 6A and 6B of GSTR-1, the sum of the IGST and cess should be recorded as a number that is equal to or higher.
• The shipping bill is treated as a refund application by the GST authority. According to GSTR-1, export information is sent from the GST portal to ICEGATE. Additionally sent is confirmation that GSTR-3B was submitted for the relevant tax period.
• The Customs system processes the refund after comparing the data on GSTR-1 to that on the customer’s shipping bill and Export General Manifest (EGM).
• When the taxpayers’ accounts have been credited with the refund, the ICEGATE system will send payment details to the GST portal.
• The GST portal will use SMS and email to reach out to taxpayers.

How to apply for most types of GST refunds using form RFD-01

RFD-01 should be submitted for the following kinds of GST refund claims:

• Excess cash balance or extra tax payment from the electronic cash ledger.
• IGST paid on service exports (with payment of tax).
• ITC accumulated as a result of tax-free exports of goods and services.
• ITC accumulated due to supplies made to an SEZ unit/SEZ developer (without tax payment).
• ITC accumulated due to the inverted tax structure (a tax on inputs higher than a tax on outputs).
• Consider a situation where a recipient of presumed exports paid the tax on inward supplies that qualified as deemed exports and claimed ITC to pay taxes in their computerized credit ledger. These deemed export recipients are entitled to a reimbursement of the tax they paid (on the condition that the supplier of such deemed exports does not claim a refund).
• Taxed supplies made to SEZ units/developers (with payment of tax).
• Tax is paid on an intrastate supply that is later held as an interstate supply and vice versa.
• Suppose a provider of deemed exports did not charge and collect tax from the buyer of supposed exports but instead paid tax on regarded supplies. In that case, he could claim a refund (on a declaration that the recipient or buyer of such deemed exports does not claim a refund).
• Because of an assessment, a provisional assessment, an appeal, or any other order.
• There is a clause in RFD-01 that allows you to request a refund on “Any other ground.”

*It is critical to declare consistent invoice information in both GSTR-1, where applicable, and RFD-01. A certificate from a chartered accountant or cost accountant may occasionally be required.

Applying for a refund in RFD-01 requires the completion of the steps listed below:

Step-1 

Log in to the GST portal, select the ‘Services’ tab, then ‘Refunds,’ and finally, the ‘Application of refund’ option.

Step-2 

Select the reason for the refund or the type of refund, and then click ‘Create refund application’ on the next page.

Step-3 

If you want to file a nil refund, select the period and then select “Yes” or “No” in the dialogue box that appears.

In the event of a nil refund application, the taxpayer can check the declaration and file using either DSC or EVC.

Step-4 

Depending on the refund type you choose in the previous step, the appropriate page will display where you may enter the information.

Type-1: Excess cash balance in electronic cash ledger

Enter the amount of money to be refunded.

Type-2: Excess tax paid through GSTR-3B

Enter information from GSTR-3B for any cash tax payments.

Type-3: Accumulated ITC due to exports of goods and services (without payment of tax)

• Download Statement 3 and enter the information for the export invoice documents for which a refund is being claimed.
• Create the JSON file and submit it to the GST portal. Check for any errors.
• Submit total turnover, revised total turnover, and net input tax credit in the ‘Computation of Refund to be Claimed Statement-3A [rule 89(4)]’ column.
• Validations are carried out to establish the highest refund amount for which the taxpayer is qualified.

Type-4: ITC accumulated as a result of supplies given to SEZ developers and units (without tax payment)

The filing of GSTR-1 and GSTR-3B for the selected period is required. The steps are the same as those outlined above for the Type 3 refund. The statement, however, will be Statement 5. Instead of JSON, a CSV file can be uploaded.

Type-5: ITC accumulated due to an inverted tax structure

The tax rate and amounts paid for inputs are higher than what is spent on outputs under an inverted tax structure. The steps are the same as those outlined above for the Type 3 refund. The statement, however, will be Statement 1A. Afterwards, enter information such as inverted rated supply turnover, tax payable, adjusted total turnover, and net input tax credit.

Type-6: Refund by the recipient of deemed exports

The steps are the same as those outlined above for the Type 3 refund. The statement, however, will be Statement 5B. After that, provide details like the refund to be claimed and the net input tax credit for considered exports.

Type-7: Taxes paid on materials given to SEZ developers or units (with payment of tax)

The steps are the same as those outlined above for the Type 3 refund. The statement, however, will be Statement 4. The refund amount will be auto-populated based on the uploaded statement.

Type-8: Tax paid on an intrastate supply that was subsequently held to be an interstate supply, and vice versa

The steps are the same as those outlined above for the Type 3 refund. However, the statement will be Statement 6. The refund amount will be auto-populated based on the uploaded statement.

Type 9: Refund of deemed exports by the provider

The steps are the same as those outlined above for the Type 3 refund. The statement, however, will be Statement 5B, and the refund amount will be auto-populated based on the uploaded statement.

Type 10: Return of IGST paid on service exports

The procedures are the same as what was described for the Type 3 refund. The statement, however, will be Statement 2. The refund amount will be auto-populated based on the uploaded statement.

Type 11: Choose the type of order and input the relevant information on account of assessment, provisional assessment, appeal, or any other order.

Type-12: Refund on ‘any other ground.’

Excess interest paid via GSTR-3B could be one of the reasons. Mention the reason for the refund in 200 characters or less, along with the amount.

Step-5 

In refund types that require it, enter the bank account details for the refund and upload the supporting documents and declaration.

Up to ten supporting documents can be uploaded, each with a file size limit of 5 MB.

Click ‘Save’ after previewing the Application. The saved Application is available for action by the taxpayer for 15 days. After checking the boxes for undertaking and self-declaration, click the ‘Proceed’ button.

Step-6 

File RFD-01 using EVC or DSC.

The application reference number, the ARN, is generated and displayed on the screen. This number can be used to track taxpayers. Additionally, the email and mobile phone numbers receive the ARN. Following that, the refund application is assigned to the refund processing officer. The refund status will be updated once it has been processed.

GST refund process for embassies and international organizations

There are two methods for requesting refunds:

• Use GSTR-11 to generate a refund application in form RFD-10.
• Once you’ve logged into the GST portal, you may find the RFD-10 form.

If it’s the first scenario, choose the tax period or quarter to navigate to the GSTR-11 that was previously filed. Select the ‘Generate RFD-10’ option.

Click the ‘Create’ button after selecting the embassy or organization radio button. The figures in the editable “Details of the tax paid on purchases as reported under GSTR-11” table will be automatically filled in using data from the return for the relevant period.

Preview and submit using DSC or EVC.

After logging into the GST site in the second instance, go to the dashboard and choose Refunds from the Services menu. After that, select the ‘Application for refund’ option.

Choose ‘Embassy/International Organization’ as the option and click ‘Create’ on the page that appears.

The details of taxes paid that are eligible for a refund are auto-populated from the previously filed GSTR-11.

Verify and edit the refund amount, or enter it manually.

The remaining stages mirror those in the first scenario.

What happens after the GST refund is applied?

The Application filed by taxpayers or refund petitioners will display as a separate work item on the dashboard of the tax officer or refund processing officer. They will verify and scrutinize the Application and the supporting documents.

Field applications can be tracked by selecting “Track Application Status” from the Refunds menu. Following an inspection by a GST official, the refund amount will be credited to the applicant’s bank account.

The officer will take the following actions:

• For certain types of refunds, a provisional refund can be granted using form RFD-04. At least 90% of the amount requested must be approved and provided within seventy-seven days of the acceptance date.
• Within 15 days of submitting the reimbursement request, if the Application is complete in all material respects, an acknowledgement in form RFD-02 is sent.
• The applicant can now withdraw their request for a refund on form RFD-01W. The repayment initially deducted from the taxpayer’s electronic credit or cash register will be restored to the relevant register when the withdrawal application has been submitted.
• If not, the officer may, within the same time frame, issue a deficiencies memo in form RFD-03 to address any errors made by the applicant. An automatic re-credit of the claimed refund amount would take place at this point if the ledger were debited when the refund request was filed. A new application should be submitted in such circumstances.
• The officer may reject the Application or seek to reclaim a refund that was mistakenly granted by issuing a notification to seek clarification in form RFD-08. In these situations, the applicant has 15 days to respond to form RFD-09.
• On form RFD-06, an officer shall provide a sanction or refusal order. Payment order in the form RFD-05 is after that issued in cases of sanction. In rare cases, RFD-04 is followed by RFD-05.
• The officer may occasionally enforce a withholding order authorized under form RFD-07 (part-B). In this nation, RFD-05 is never distributed.
• In situations where the reimbursement was declined or the provisional refund was approved on form PMT-03. Re-credit the repayment from the taxpayer’s electronic cash or credit ledger.

Other articles related to GST Refunds and payments 

TDS and TCS under GST

Guide to GST Refund claims