Changes in GST Refund Rules:

Recently CBIC has issued Notification No. 15/2021–Central Tax dated 18th May 2021 specifying changes in the CSGT Rules, which has brought changes in GST refund procedure (e.g. withdrawal of refund application, adjustment of refund amount against pending demand, extension of time period for computation of period of limitation, etc.). Same has been discussed herein below –

A. Exclusion of time from the date of filing refund claim to the time of communication of deficiencies for period of two year – Insertion of new provision to Rule 90 (3) of the CGST Rules, 2017

The time period, from the date of filing of the refund claim in FORM GST RFD-01 till the date of communication of the deficiencies in FORM GST RFD-03, shall be excluded from the period of two years, for any fresh refund claim filed after rectification of the deficiencies.

TaxMarvel Comments – This is a welcome move brought in by CBIC. Earlier the period of filing of GST refund and date of communication of deficiencies was included in the time limit of 2 years. Hence, in case at the time of communication of deficiency, the 2 year period gets over, the claim was rejected.

B. Withdrawal of refund application – Insertion of sub rule 5 in Rule 90 of the CGST Rules, 2017 –

The refund applicant which is filed (in FORM GST RFD-01) be withdrawn at any time before –

a. issuance of provisional refund sanction order (in FORM GST RFD-04); or

b. final refund sanction order (in FORM GST RFD-06); or

c. payment order (in FORM GST RFD-05); or

d. refund withhold order (in FORM GST RFD-07); or

e. notice (in FORM GST RFD-08)

by filing an application in FORM GST RFD-01W.

C. Recredit of the amount debited from Electronic Credit/Cash Ledger – Insertion of sub rule 6 in Rule 90 of the CGST Rules, 2017 –

Once the application for withdrawal of refund in FORM GST RFD-01W is submitted, any amount debited from electronic credit ledger or electronic cash ledger, shall be credited back to the Electronic Credit/Cash ledger

D. Order for Release of Refund Amount withheld – Insertion of new provision to Rule 92 (2) of the CGST Rules, 2017 –

If the proper officer or the Commissioner is satisfied that the refund is no longer liable to be withheld, he may pass an order for release of withheld refund in Part B of FORM GST RFD- 07.

E. Substitution of refund FORM GST RFD – 07 –

If the proper officer or the Commissioner is satisfied that the refund is no longer liable to be withheld, he may pass an order for release of withheld refund in Part B of FORM GST RFD- 07.

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Disclaimer: The content of this document is for general information purpose only. TaxMarvel shall not accept any liability for any decision taken based on the advice. You should carefully study the situation before taking any decision.

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