1. Refund Process E-course on GST
Goods & Services Tax
Refund Process
E-course on GST

2. CA. RAJAT MOHAN
F.C.A., A.C.S., D.I.S.A. Certificate Course on Indirect Taxes Certificate Course on Forensic Accounting and Fraud Prevention Past- Deputy Convener for GST Research Study Group of NIRC of ICAI Past-Member of Study Material Research Group of NIRC of ICAI. Awarded upcoming speaker of the year by NIRC of ICAI in April, Written many books including a book on GST(4th edition) published by Bharat Law house. Over 100 articles published on tax matters(including GST) by TAXMANN, STR, VSTC, Indraprashtha Vyapar, Suchita times, Service Tax Review NIRC Newsletter, The Chartered Accountant Journal etc. Conducted seminar/workshops for professionals and students on ‘GST’ for Study circles, Nirc of ICAI, NIRC of ICSI, Young member committee of ICAI, Department of Commerce (Kurukshetra University), VIPS college.

3. Introduction
August, (a)Committee on Business processes for GST came out with a detailed report on Refund under GST regime. (b)Based upon this report and documents available in public domain, I have drafted this PPT.

4. Situations under refund
(a) Excess payment of GST due to mistake or inadvertence. (b) Export (including deemed export). (c) Finalization of provisional assessment. (d) Refund of Pre – deposit for filing appeal. (e) Payment of advance GST during investigation but lesser liability arose at the time of finalization. (f) UN Bodies, CSD canteens, para military forces canteens, etc. (g) Refund of carry forward input tax credit. (h) Incentives provided by the supplier through credit notes. (i) Tax refund for international tourists.

5. Excess payment of GST due to mistake or inadvertence
Wrong mention of nature of tax (CGST/SGST/IGST)
Taxpayer to file a refund application within a prescribed period.
b. Wrong mention of GSTIN
c. Wrong mention of tax amount.
Option of the taxpayer, to carried forward for adjustment against future tax liabilities or be refunded on submission of application.

6. Export of Goods Two Options:
Obtain GST paid inputs. Claim refund of GST paid on such inputs at the time of export of the finished goods. No GST will be applicable on finished Goods.
Obtain GST paid inputs and avail ITC. Export finished goods after payment of duty (after utilizing such input tax credit) and thereafter claim refund of the GST paid on exported goods.

7. Refund Process in case of Export of Goods
(a) Submit Online Refund application. (b) Time limit for filing of refund application - One year from the date of export. (c) ICEGATE linked to GSTN - Exports need to be verified online so as to minimize cases of erroneous/fraudulent claims of refund/rebate. This will be done with the help of linkage between ICEGATE of Customs administration and the proposed GSTN of GST administration. (d) Online Bank Realization Certificate (BRC). - Exporter has a time period of one year from the date of export for realization. This will be checked online.

8. Export of services
(a) Export of services cannot be verified online through ICEGATE. (b) Invoice and Bank Realization Certificate (BRC) are the only documents that can substantiate the occurrence of event of exports. Therefore, BRC would be required before sanction of the refund of GST.

9. All Exports - Other Points
(a) 90% of the refund claimed by the taxpayer may be sanctioned automatically by the system. The balance amount to be granted after completion of verification of documents at the end of the financial year and to be completed within a period of 3 months. (b) Exports to be treated as inter-state supplies and therefore IGST would be paid(if applicable). Refund of IGST would be paid by the Central Government. (c) In case of refund of GST paid on inputs and input services used for exported goods, refund of CGST, SGST or IGST will paid by the respective tax administration. (d) Principle of unjust enrichment is not applicable in case of actual export of goods or services as the recipient is located outside the taxable territory.

10. Finalization of provisional assessment.
(a) In GST return there will be a field for indicating whether the tax being paid is provisional or final. (b) Return may be taken up for finalization and speaking order should be passed in 90 days. (c) The refund would be granted only if the incidence of GST paid by him has not been passed on to the consumer (the concept of unjust enrichment). This issue would be examined by the assessing officer at the time of finalization of assessment.

11. Refund of Pre – deposit for filing appeal.
(a) Refund of Tax paid will given which is arising in pursuance of an appellate authority’s order (when the appeal is decided in favor of the appellant). (b) Simple refund application. (c) Powers to hold the refund will be given at a senior level, so that it may not misutilized.

12. Payment of advance GST during investigation
In some cases at the time of investigation payment of advance GST will required by the investigating teams, and in case final liability is less at the time of finalization. (a) Simple refund application. (b) Chartered Accountant’s Certificate certifying the fact of non-passing of the GST burden by him.

13. UN Bodies, CSD canteens, para military forces canteens, etc.
(a) Unique identification number (ID) will be allotted to these bodies , as these bodies do not have PAN.
(b) While making supplies to such bodies, the suppliers must indicate the Unique ID on the invoices.
(c) Such Bodies may file their purchase statements (without purchase invoices) along with their claim for refund
The IT system will carry out the matching with the sales statements of suppliers.
After which the refund will be granted for the matched transactions.

14. Refund of carry forward input tax credit:
(a) Inverted Duty Structure i.e. GST on output supplies is less than the GST on the input supplies - Cash refund may be granted after due audit. (b) Stock accumulation - Refund of carried forward ITC may not be allowed and such amount would be carried forward to the next tax period. (c) Capital goods - Refund will not be allowed and such amount would be carried forward to the next tax period. (d) Partial Reverse charge mechanism for certain services - Refund may be granted.

15. Incentives provided by the supplier through credit notes.
(a) Submit a simple refund application. (b) Chartered Accountant’s Certificate certifying the fact of non-passing of the GST burden by the taxpayer (c) ITC at the buyer’s end and the output liability at the supplier’s end will get simultaneously adjusted on the basis of credit notes issued by the supplier(or debit notes issued by the buyers).

16. Tax refund for International tourists
Foreign tourists to purchase goods during their stay in any country on payment of GST and obtain refund of the GST so paid, at the time of exit from the country.

17. Time period for filing of refund
One year from the relevant date may be allowed for filing of refund application

18. Relevant dates
(a) Mistake - Date of payment of excess payment of GST due to mistake or inadvertence.
Export of Goods - Date on which proper officer under the Custom Act gives an order for export known as “LET EXPORT ORDER”.
Export of services - Date of BRC.
Provisional assessment - Date of the finalization order.

19. Relevant dates
Appellate authority’s order - Date of communication of the appellate authority’s order.
Investigation - Date of communication of adjudication order or order relating to completion of investigation.
Partial reverse charge cases - Date of providing of service (normally the date of invoice).
Embassies or UN bodies or to CSD canteens - Date of payment of GST.
Inverted duty structure - Last day of the financial year.

20. Process of refund
Applicant may be given the option of filing refund application either through the GSTN portal or through the respective State/Central Tax portal. Filing through GSTN portal may be beneficial for those applicants whose refund relates to CGST/IGST as well as SGST.
Acknowledgement number may be generated and communicated to the applicant via SMS and
After the receipt of the application in the jurisdictional officer’s menu, the same should be examined for deficiency(30 days to check). Such errors will be sent online to applicant, who will then given an online reply to the same.

21. Process of refund
Once the refund application is found to be complete and the fact of completeness has been intimated to the applicant, the jurisdictional tax authority should examine the same in the light of the provisions of the GST Law relating to refund. Important parameters include the timeliness of refund application, tax payment, date of export (if relating to export), reasons for refund etc.
Chartered Accountant’s Certificate certifying the fact of non-passing of the GST burden by the taxpayer shall also be submitted.
Once everything is correct, refund can be transferred to the applicant electronically through NEFT/RTGS/ECS.

22. Minimum amount below which No refund
Amount in the range of Rs /- may be fixed below which refund shall not be granted.

23. Pre- audit
Pre-Audit would be required in case Refund amount exceeds a pre-determined amount (expected Rs. 1 Crores). Only after this audit such big refunds would be granted.

24. Post-audit
Post audit of refund application (and not of the accounts of the taxpayer)can be dispensed with if so decided by the respective Tax Jurisdiction for refunds upto Rs. One lakh for normal taxpayers and for refund upto Rs. 2 lakhs for certain prescribed categories of applicants (like public sector undertakings, applicants having the AEO Status, etc.).

25. Interest:
Refund shall be paid within 90 days of refund application or interest shall be paid on the same.
The Committee recommends that rate of interest in case of refund may be around 6% and that in case of default in payment of interest may be around 18%.

26. THANK YOU CA Rajat Mohan Website: www.gstsms.in
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