1. Refunds under GST Arun Kumar Mishra Joint Secretary, Finance Bihar GST Refund Process-A K Mishra, Kolkata, 11.12.2015

2. Refund of taxes Paying back to the taxpayer any sum not due yet deposited by him “Re”fund of “fund” i.e. no refund until money has gone into Government Account Refund of taxes always a vexed issue More so in GST/VAT as money may have ben deposited by a person other than the person claiming refund “ICT”—the only way to ensure proper and efficient refund GST Refund Process-A K Mishra, Kolkata, 11.12.2015

3. Refunds under GST Excess payment by mistake ITC on account of exports In pursuance of Appeal/Court order Excess payment during enforcement proceedings Purchases by UN bodies/embassies/international tourists Inverted tax structure Period-end incentives through credit notes Inputs used in “nil” rated/exempt supplies All refunds— – on application – only if burden of tax not passed on (CGST/SGST collected instead of IGST or vice-versa not to be deemed as “unjust enrichment”; only differential tax to be demanded in such cases) GST Refund Process-A K Mishra, Kolkata, 11.12.2015

4. Excess payment by mistake Excess payment may be on account of— – Wrong head (IGST/CGST/SGST) – Wrong GSTIN – Wrong amount Application within one/two year of date of payment Preliminary scrutiny to be made within 30 common working days and communicated Verified on the basis of return filed by applicant Automatic carry forward in case excess payment not linked to difference of opinion mooted (being debated) To be transferred to taxpayers’ account if passes the test of “unjust enrichment” or else to the consumer welfare fund To be decided within 90 days of acknowledgement of application GST Refund Process-A K Mishra, Kolkata, 11.12.2015

5. Exports Exports to zero-rated GSTN, ICEGATE and DGFT databases to be linked for cross verifying IEC and documents for export alongwith the return and application Event of export to be verified DGFT prescribes only three mandatory documents for exports: – Bill of lading/Airway Bill – Commercial invoice-cum-packing list – Shipping Bill/Bill of export All these will be available online on ICEGATE and can be verified with the invoice filed on GSTN and the event of export can be established Post-facto verification of BRC GST Refund Process-A K Mishra, Kolkata, 11.12.2015

6. Exports….contd. Upon event of export being established, GST paid on inputs can be verified by— – Matching details of inward supplies with corresponding outward supplies, and – Input output-ratios to ascertain the input forming part of export output In case of domestic, inter-state and export supplies, need for refund may not arise Refund will arise in case of EOUs/export houses or predominant exporters To be decided within 90 days of acknowledgement of application ITC claimed as refund may be blocked at time of application and in case of rejection amount to be restored to ITC ledger No refund in case of goods on which Customs Export Duty leviable (to discourage export of such goods) GST Refund Process-A K Mishra, Kolkata, 11.12.2015

7. Exports….contd. Services Exports of services (intangibles) has to be verified on the basis of BRC and invoices since no customs documents are available Application within one year of date of invoice or date of BRC, whichever is later RBI norms prescribe payments can be received within one year of export hence BRC may be received within 1 year To be decided within 90 days of acknowledgement of application ITC claimed as refund may be blocked at time of application and in case of rejection amount to be restored to ITC ledger GST Refund Process-A K Mishra, Kolkata, 11.12.2015

8. Deemed exports Domestic supplies to EOUs/SEZs/Mega power plants/EAPs may be “deemed” to be exports Output tax will charged and paid on such supplies and refund can be claimed only if output tax not collected from the recipient (unjust enrichment) ITC in respect of such supplies to be available like normal cases GST burden not being passed on has to be certified by CA (self-certification mooted in cases below a certain threshold) Recipient eligible for refund of ITC only it has actually paid it to supplier, in which case, supplier would not be entitled to refund ITC claimed as refund may be blocked at time of application and in case of rejection amount to be restored to ITC ledger Period of determination of application 90 days GST Refund Process-A K Mishra, Kolkata, 11.12.2015

9. Refunds pursuant to Court order Application alongwith certificate for non-passing of tax Power to withhold refund to lie with Commissioner in case it is deemed ‘prejudicial’ to revenue and interest to be paid on such refund if it is held as refundable by higher Court/Authority To be transferred to taxpayers’ account if passes the test of “unjust enrichment” or else to the consumer welfare fund To be decided within 90 days of acknowledgement of application GST Refund Process-A K Mishra, Kolkata, 11.12.2015

10. Refund of excess payment during enforcement Refund will arise if the tax levied is found not payable after inspection or adjudication post-inspection Refund only after time for appeal against adjudication order giving rise to refund Power to withhold refund in this case too Application to be disposed off within 90 days of acknowledgement GST Refund Process-A K Mishra, Kolkata, 11.12.2015

11. Refund to UN Bodies/Embassies, etc. From a single office in one State Such entities may be assigned a unique ID with structure uniform across States Such bodies to file refund application in prescribed form containing details of invoice wise purchases Such details to be matched with corresponding details of outward supplies furnished by supplier No refund in case of supplies below a threshold Matched claims to be verified manually to ensure that no ineligible refund is granted Same procedure for refund to para-military/CSD canteen stores/mega power plants/EAPs GST Refund Process-A K Mishra, Kolkata, 11.12.2015

12. Refund in case of inverted tax structure No refund of excess ITC will arise since “gross tax” concept alongwith a system of PLAs is followed Refund in case of inverted tax structure to be allowed: – On application – After due audit in this behalf – After cross verification of inward and outward supplies ITC claimed as refund may be blocked at time of application and in case of rejection amount to be restored to ITC ledger Same process to be followed for refund on account of partial reverse charge mechanism GST Refund Process-A K Mishra, Kolkata, 11.12.2015

13. Refund in case of year-end incentives Application alongwith certification of non-passing of tax burden Credit notes issued by supplier to be matched with corresponding entries by recipient ( outward-inward matching ) To be allowed only if the reduction in tax liability of supplier is accompanied by reversal of ITC by recipient To be processed within 90 days of application GST Refund Process-A K Mishra, Kolkata, 11.12.2015

14. Refund to international tourists To be permitted only in case of purchases from especially designated retailers who are registered in this behalf only Allowed from designated airports/ports only Mechanism for verification and payment of tax by supplier to be worked out GST Refund Process-A K Mishra, Kolkata, 11.12.2015

15. Time period for application One year from “relevant date”, which is: – Date of tax payment in case of mistake in TIN, Nature of tax, amount – Date of “Let Export Order” in case of exports of goods – Date of BRC in case of export of services – Date of communication of Court’s order in case of refund in pursuance thereof – Date of communication of adjudication order/completion of investigation in case of excess payment during investigation – Date of rendering of service in case of partial reverse charge – Date of payment of tax in case of claims by UN bodies/embassies etc. – Last day of financial year in case of inverted duty structure GST Refund Process-A K Mishra, Kolkata, 11.12.2015

16. Documentation Almost all of the evidence required for verification of a claim available either on GSTN itself or on ICEGATE/DGFT portal to which GSTN will be linked Hence minimum documentation required to be uploaded Application for refund alongwith certification of non-passing of tax burden to be uploaded Date of communication of Court order to be provided Application may be filed on GSTN or the concerned departmental portal (preferably GSTN) Acknowledgement to be generated by system and communicated through SMS/email Preliminary scrutiny to be done preferably within 30 working days and deficiency communicated online Piecemeal queries to be avoided and reply to be filed on portal Application complete in all respects to be considered and date of mail to this effect be the relevant date No refund if claim less than a threshold GST Refund Process-A K Mishra, Kolkata, 11.12.2015

17. Verification and controls Every refund sanctioned to be reviewed pre or post sanction but May be dispensed with in case of refunds upto a certain limit in view of ICT based verification built in the system In case of refunds exceeding the prescribed limit, pre-audit of the refund may be mandatory Task should be migrated to the audit/higher authority for review of the refund which is to b done in a time-bound manner prescribed under law Application to be disposed off in 90 days from date of acknowledgement and interest from such date till date of payment to be made in case of delayed refunds 30 days suggested for raising queries on refund application Refund to be applied first towards any un-stayed/confirmed arrears GST Refund Process-A K Mishra, Kolkata, 11.12.2015

18. THANK YOU GST Refund Process-A K Mishra, Kolkata, 11.12.2015