FAQs on Refund of ITC accumulated due to Inverted Tax Structure (RFD-01A)

Contents

Q.1 What is Inverted Tax Structure in the GST regime?

Ans: The term ‘Inverted Tax Structure’ refers to a situation where the rate of tax on inputs is more than the rate of tax on output supplies. As a result, the higher tax paid on input supplies gets accumulated in the Electronic Credit Ledger of the taxpayer. The taxpayer can claim the refund of ITC accumulated on account of Inverted Tax structure by filing the refund application form RFD-01A. (Refer Section 54(3) (ii) of the CGST Act 2017)

Q.2 What is needed to file for refund of accumulated ITC of IGST / CGST / SGST on account of Inverted Tax Structure?

Ans: You can file for refund of IGST / CGST / SGST on account of ITC accumulated due to Inverted Tax Structure, if you have filed GSTR1 and GSTR-3B of the relevant tax period, for which refund is to be claimed.

However, in case registered persons having aggregate turnover of up to Rs 1.5 crores in the preceding financial year or the current financial year opting to file FORM GSTR-1 quarterly (notification No. 57/2017-Central Tax dated 15.11.2017 refers), such persons shall apply for refund on a quarterly basis. Please note that such refund on account of inverted tax structure is not available in case of exempted or nil rated supplies.

Q.3 Is there any time limit to file for refund of ITC accumulated due to Inverted Tax Structure?

Ans: Yes, the refund application in form RFD-01A needs to be filed within 2 years from the end of financial year in which such claim for refund arises

Q.4 What are the relied upon documents which I have to upload with refund application of ITC accumulated due to Inverted Tax Structure?

Ans: You have to upload documents as are required to be filed along with Form RFD-01A, as notified under CGST Rules or Circulars issued in the matter and other such documents the refund sanctioning authority may require.

Statement 1A shall be uploaded mandatorily with the details of inward and outward invoices for which refund is to be claimed. Taxpayers have an option to upload 4 documents with the refund application, of size up to 5MB each. Therefore, any supporting document can be uploaded by the taxpayer, if required.

Q.5 To whom should I file my application with?

Ans: The taxpayer shall file the refund application in Form RFD-01A on GST portal. Taxpayer shall choose ground of refund as “Refund on account of ITC accumulated due to Inverted Tax Structure” for claiming refund. After filing, refund application shall be assigned to Refund Processing Officer and refund applicant can track the status of refund application.

Q.6 Can I file for multiple tax period in one refund application?

Ans: Yes, you can file for refund of multiple tax period in one refund application. E.g. If taxpayer wants to claim refund of Apr 2018, May 2018 and June 2018, then taxpayer can choose the period from Apr 2018 to June 2018 and file a single refund application.

Q.7 Can I file nil refund for multiple tax period in one refund application?

Ans: Yes, you can file for nil refund for multiple tax period in one refund application.

E.g. If taxpayer doesn’t want to claim refund of Apr 2018, May 2018 and June 2018 as he doesn’t have any invoices for this period, then taxpayer can choose the period from Apr 2018 to June 2018 and file a nil refund application for that period. After filing no refund application, taxpayer won’t be able to file refund application for that period in future.

Q.8 Can nil period of refund be combined with the period in which there is refund in one application?

Ans: Yes, nil period of refund can be combined with the period in which there is refund in one application.

Let us suppose you want to file tax refund from Apr-Sep month, where you want to file nil refund for May-Jun month. There are two ways in which you can file your refund application.

a. You can select Tax Period as Apr-Apr and file normal refund application. You can then select May-Jun and file Nil refund application. And, select Jul-Sep and file normal refund application.

b. You can select Tax Period as Apr-Sep and file normal refund application.

Q.9 Can I save the application for refund?

Ans: Application for refund can be saved at any stage of completion for a maximum time period of 15 days from the date of creation of refund application. If the same is not filed within 15 days, the saved draft will be purged from the GST database.

Note: To view your saved application, navigate to Services > Refunds > My Saved/Filed Applications option.

Q.10 Whether I would be able to file refund application without uploading statement of invoices?

Ans: No. Statement 1A for details of inward and outward invoices is mandatory for filing refund application.

The statement uploaded by taxpayer would be validated with the data already declared by the taxpayer while filing return GSTR-1 for outward supplies and details of inward supplies would be validated from supplier’s database. Only after this data is validated, the taxpayer would be able to file the refund application.

Q.11 From where can I download the utility to upload the statement?

Ans: Offline utility can be downloaded from the refund application page itself.

Navigate to Services > Refunds > Application for Refund > Select the refund type as “Refund on account of ITC accumulated due to Inverted Tax Structure > Refund Application > Download Offline Utility link.

Q.12 What is the purpose of Download Offline Utility to upload the statement?

Ans: Download Offline Utility (Statement 1A) is provided to enter and upload details of inward and outward invoices for which refund is being claimed.

Q.13 What is the significance of VALIDATE STATEMENT button?

Ans: Validate Statement button is used to validate invoice data provided by the taxpayer. The details of outward invoices would be validated from the details provided by taxpayer while filing GSTR-1 and details of inward supplies would be validated from supplier’s database.

Q.14 Can I update/ edit data after clicking the VALIDATE STATEMENT button?

Ans: Yes, you can update/ edit data even after you have validated the uploaded statement. If you want to update/delete the statement, then you would have to first delete the whole statement by clicking the DELETE STATEMENT button and upload a new statement of invoices again if needed.

Q.15 What is the purpose of Download Unique Invoices?

Ans: To download the invoices that have been uploaded successfully on the GST Portal, you can click on the hyperlink “Download Unique Invoices”.

Q.16 What is the purpose of Download Invalid Invoices?

Ans: To download the invoices that have not been uploaded due to some error while uploading invoice details on the GST Portal, you can click on the hyperlink “Download Invalid Invoices”.

Q.17 I am getting a message “validated with error” while uploading statement on the GST Portal. What do I do?

Ans: In case any statement is validated with error, click the Download Invalid Invoice link. Open the invalid invoice excel sheet. Error details are displayed. You can only rectify the error details in the JSON file and upload on the GST Portal again by clicking the CLICK HERE TO UPLOAD button.

Q.18 I have uploaded statement which has been validated on the GST Portal. I need to upload a new statement of invoices again. What do I do?

Ans: If you don’t have any error and statement has been validated, and then you want to update/delete the statement, then you would have to first delete the whole statement by clicking the DELETE STATEMENT button and upload a new statement of invoices again if needed.

Q.19 Can I preview the refund application before filing?

Ans: Yes, you can preview the refund application in PDF format to check for any inconsistency or discrepancy before filing on the GST Portal.

Q.20 In which bank account will the refund amount be credited? Is it one of the accounts that I registered in GST Portal?

Ans: Yes, the refund amount will be credited to one of the bank accounts that you have added while filing your registration application on the GST Portal. At the time of filling out form RFD-01A, you will be required to select a bank account from the list of your linked / registered accounts in the GST Portal for crediting refund to that account, from the dropdown available in refund application. In case you want refund in another preferred bank account which is not appearing in the drop down list, you will have to add that bank account by filing amendment of registered (non-core) form. The bank account added by amendment form will get added to the drop-down list.

Q.21 How can I track the status of application for refund?

Ans: To track your filed application, navigate to Services > Refunds > Track Application Status option.

Q.22 What is ARN?

Ans: Once the refund application is filed, Application Reference Number (ARN) receipt would be generated and ARN would be sent to your registered e-mail address and mobile number.

Q.23 Where can I download my filed refund application?

Ans: Navigate to Services > User Services > My Applications link to download your filed refund application.

Q.24 What happens when refund application is filed?

Ans:

  • GST Portal generates an ARN and displays it in a confirmation message, indicating that the refund application has been successfully filed.
  • GST Portal sends the ARN to registered e-mail ID and mobile number of the registered taxpayer.

Q.25 Whether there is any ledger entry on filing refund application?

Ans: A debit entry shall be made in the Electronic Credit Ledger for the amount claimed as Refund on filing of refund application form by clicking on “File” button. On click of File, ARN is generated on filing of the refund application.

Q.26 When / how will the refund Form RFD-01A be processed?

Ans: Once the ARN is generated on filing of refund application in Form RFD-01A, the refund application along with the documents attached while filing the form would be assigned to Refund Processing Officer for processing the refund. Tax payer can track the status of refund application using track status functionality.

The application will be processed and refund will be disbursed by the Jurisdictional Authority after scrutiny.Also Read-

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6 responses to “FAQs: Refund of ITC accumulated due to Inverted Tax Structure (RFD-01A)”

  1. naveen says:

    What should i do in case of B2B invoices in offline utility

  2. Raghav Bansal says:

    Please let us know if refund is allowed in case of excess ITC accumulated due to high tariff in case of import. Please note both input and output are same rate supplies i.e. 18%.

  3. Jayakar Poojari says:

    We are exporter of Fabrics & opted Tax with payment of Exports & in Electronic credit ledger there is credit balance of un-utilized ITC for the period July-17 To March-18. How to apply to get refund of ITC for the above period.

  4. RAm says:

    what excess input tax allow for refund of duty scrip under the ITC accumulated due to inverted tax structure ??

  5. V Shankar says:

    Whether EGM No. and date is must for the refund.
    Statement- 3A [rule 89(4)]
    Refund Type: Export without payment of tax (accumulated ITC) – calculation of refund
    amount.
    Please do confirm

  6. GHANSHYAM VAISHNAV says:

    I think refund in such cases can be made only after the end of financial year.

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