Article contains relevant sections, rules, circulars and gist of Circular No. 135/05/2020-GST Dated 31/03/2020 issued in regard of filing and processing of refund electronically.

Refund is very important term under the GST for the person who is eligible to claim the refund and for the GST Authority who issues the refund order. Both persons i.e. who claim the refund and who issues refund should have fully conversant with the provisions and law in regard of Refund under the GST.

A. Allowable Refunds

1. Refund of unutilized input tax credit (ITC) on account of exports without payment of tax;

2. Refund of tax paid on export of services with payment of tax;

3. Refund of unutilized ITC on account of supplies made to SEZ Unit/SEZ Developer without payment of tax;

4. Refund of tax paid on supplies made to SEZ Unit/SEZ Developer with payment of tax;

5. Refund of unutilized ITC on account of accumulation due to inverted tax structure;

6. Refund to supplier of tax paid on deemed export supplies;

7. Refund to recipient of tax paid on deemed export supplies;

8. Refund of excess balance in the electronic cash ledger;

9. Refund of excess payment of tax;

10. Refund of tax paid on intra-State supply which is subsequently held to be inter-State supply and vice versa;

11. Refund on account of assessment/provisional assessment/appeal/any other order;

12. Refund on account of “any other” ground or reason; and

13. Refund, as per section 54 (2) of the CGST Act, of tax paid on inward supplies of goods or services or both by UNO etc. notified under section 55.

Refund under GST

B. Exceptions, Withholding and Non-Payment of Refund

Exceptions according to provisos to Section 54 (3) of the CGST Act –

> No refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:

> No refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.

Withholding of Refund under section Section 54 (10) of the CGST Act –

> Defaulted in furnishing any return;

> Defaulted in payment of any tax, interest or penalty and

> The Proper Officer is authorised to deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law.

Withholding of Refund under section Section 54 (11) of the CGST Act –

> Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine.

Withholding of Refund Casual Taxable Person or Non-Resident Taxable Person – Section 54 (13) of the CGST Act

> The amount of advance tax deposited by a casual taxable person or a non-resident taxable person under sub-section (2) of section 27, shall not be refunded unless such person has, in respect of the entire period for which the certificate of registration granted to him had remained in force, furnished all the returns required under section 39.

Non Payment of Refund – Section 54 (14) of the CGST Act

> No refund under sub-section (5) or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees. Sub-sections 5 and 6 are about application of refund claiming refund amount less than one thousand rupees. It is clarified vide circular 125/44/2019 that the limit of rupees one thousand shall be applied for each tax head separately and not cumulatively.

C. Time Period and GST Form for apply of refund by the person other than the person ( UNO etc. ) notified under section 55

> GST Form – GST Form GST RFD-01

> Time Period – Before the exipry of Two Years from the Relevant Date

> Relevant Date – Such date explained vide Para 2 of the Explanation to the Section 54 of the CGST Act. The same is reproduced as under:

(a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,—

(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or

(ii) if the goods are exported by land, the date on which such goods pass the frontier; or

(iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India;

(b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished;

(c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of—

(i) receipt of payment in convertible foreign exchange 55[or in Indian rupees wherever permitted by the Reserve Bank of India], where the supply of services had been completed prior to the receipt of such payment; or

(ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice;

(d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction;

(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3) ( accumulation of tax due to inverted tax structure ) , the due date for furnishing of return under section 39 for the period in which such claim for refund arises;

(f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof;

(g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and

(h) in any other case, the date of payment of tax.

D. Time Period and GST Form for apply of refund by the person ( UNO etc. ) notified under section 55.

According to Section 54 (2) of the CGST Act the person ( UNO etc. ) notified under section 55 shall apply the refund through GST Form GST RFD-10 before the expiry of six months from the last day of the quarter in which such supply was received. Such supply means inward supply on which the tax has been paid.

E. Procedure, Processing and Sanction of Refund – Application Filed Online

At present i.e. with effect from 26-09-2019 refund procedure is fully electronic. All steps of submission and processing in regard of refund shall be undertaken electronically. The GST Policy Wing issues a circular 125/44/2019 by which detail set of guidelines and processing of refund to be done electronically have been laid down.

Gist of the circular 125/44/2019 is given as under:

> Form GST RFD-01 and Documents-

a) The application shall be, inter alia, filled with statements/ declarations/undertakings.

b) Documents/tax invoices shall be required for processing of the refund application be uploaded with the form.

c) A comprehensive list of documents is provided at Annexure-A ( given below at para J ) of the Circular.

d) No other document needs to be provided at the stage of filing of the refund application except which are required and stated in Annexure-A.

e) Four Attachments maximum size of 5 MB may be uploaded with the Refund Application.

f) Neither the refund application in FORM GST RFD-01 nor any of the supporting documents shall be required to be physically submitted to the office of the jurisdictional proper officer.

> Application Reference Number (ARN) and Acknowledgement –

a) The Application Reference Number (ARN) will be generated only after the applicant has completed the process of filing the refund application in FORM GST RFD-01, and has completed uploading of all the supporting documents/ undertaking.

b) The application shall be deemed to have been filed under sub-rule (2) of rule 90 of the CGST Rules on the date of generation of the said ARN.

c) The time limit of 15 days to issue an acknowledgement or a deficiency memo, as the case may be, shall be counted from the date of ARN.

d) The acknowledgement (FORM GST RFD-02) for the complete application or deficiency memo (FORM GST RFD-03), as the case may be, would be issued electronically.

> Refund Application for a tax period or by clubbing successive tax periods-

Refund application may be filed for a tax period either monthly or quarterly. Quarterly return filers can only file refund application quarterly. The applicant may club successive tax periods with the refund application but he cannot club tax period of different financial years. For example refund application pertaining to 2018-19 can not be clubbed with refund pertaining to 2019-20.

But vide Circular No.135/05/2020 dated 31-03-2020 the restriction on bunching of refund claims across financial years shall not apply. For example Refund Application can be filed by clubbing of months of March 2019 and April 2019 and for two quarters 4th quarter of 2018-19 and 1st quarter 2019-20.

> Deficiency Memos

a) A Deficiency Memo shall be issued within 15 days from the date of generation of ARN.

b) Once an acknowledgement has been issued in relation to a refund application, no deficiency memo, on any ground, may be subsequently issued for the said application.

c) A fresh application would be filed after correction/rectification of deficiencies as pointed out.

d) Once an application has been submitted afresh, pursuant to a deficiency memo, the proper officer will not serve another deficiency memo with respect to the application for the same period, unless the deficiencies pointed out in the original deficiency memo remain un-rectified, either wholly or partly, or any other substantive deficiency is noticed subsequently.

e) A rectified refund application, submitted after correction of deficiencies, shall also have to be submitted within 2 years of the relevant date, as defined in the explanation after sub-section (14) of section 54 of the CGST Act.

> Provisional Refund

a) Ninety percent of provisional refund may be granted against claim for refund on account of zero rated supply of goods or services or both.

b) The provisional refund shall be issued within seven days from the date of acknowledgement through GST form GST RFD-04.

c) The proper officer may issue final order for total refund in place of provisional refund within seven days from the date of acknowledgement through GST form GST RFD-06 if the proper officer is fully satisfied about the eligibility of a refund claim on account of zero-rated supplies, and is of the opinion that no further scrutiny is required.

> Provisional Refund amount is higher than the Final Refund Amount

a) For example, consider a situation where an applicant files a refund claim of Rs.100/- on account of zero-rated supplies. The proper officer, after prima-facie examination of the application, sanctions Rs. 90 as provisional refund through FORM GST RFD-04 and the same is electronically credited to his bank account. However, on detailed examination, it appears to the proper officer that only an amount of Rs. 70 is admissible as refund to the applicant. In such cases, the proper officer shall have to issue a show cause notice to the applicant, in FORM GST RFD-08, under section 54 of the CGST Act, read with section 73 or 74 of the CGST Act, requiring the applicant to show cause as to why:

(a) the amount claimed of Rs. 30/- should not be rejected as per the relevant provisions of the law; and

(b) the amount of Rs. 20/- erroneously refunded should not be recovered under section 73 or section 74 of the CGST Act, as the case may be, along with interest and penalty, if any.

b) If the adjudicating authority decides against the applicant in respect of both points (a) and (b) above, then an amount of Rs. 70/- will have to be sanctioned in FORM GST RFD-06, and an amount of Rs. 20/-, along with interest and penalty, if any, shall be entered by the officer in the electronic liability register of the applicant through issuance of FORM GST DRC-07. Further, if the application pertains to refund of unutilized/accumulated ITC, then Rs. 30/-, i.e. the amount rejected, shall have to be re-credited to the electronic credit ledger of the applicant through FORM GST PMT-03 subject to undertaking received from the applicant to the effect that he shall not file an appeal or in case he files an appeal, the same has been finally decided against the applicant.

> No adjustment or withholding of refund

No adjustment or withholding of refund, as provided under subsections (10) and (11) of section 54 of the CGST Act, shall be allowed in respect of the amount of refund which has been provisionally sanctioned. In cases where there is an outstanding recoverable amount due from the applicant, the proper officer, instead of granting refund on provisional basis, may process and sanction refund on final basis at the earliest and recover the amount from the amount so sanctioned.

> Disbursal of Refunds by the same Jurisdiction who sanctions the Refund and interest on Refund amount

a) The Government has now decided that that for a refund application assigned to a Central tax officer, both the sanction order (FORM GST RFD-04/06) and the corresponding payment order (FORM GST RFD-05) for the sanctioned refund amount, under all tax heads, shall be issued by the Central tax officer only. Similarly, for refund applications assigned to a State/UT tax officer, both the sanction order (FORM GST RFD-04/06) and the corresponding payment order (FORM GST RFD-05) for the sanctioned refund amount, under all tax heads, shall be issued by the State/UT tax officer only.

b) If the refund amount would have not been credited to the bank account of the Applicant within sixty days from date of receipt of application (ARN), interest @ 6% shall have to pay on the refund amount starting from the date immediately after the expiry of sixty days from the date of receipt of application (ARN) till the date of refund of such tax.

F. Guidelines for GST Refunds

> For refunds of unutilized Input Tax Credit pertaining to exports without payment of tax, supplies made to SEZ Unit/SEZ Developer without payment of tax and accumulation due to inverted tax structure.

a) Form GSTR-2A shall have to be uploaded with refund application for the period for which the refund is claimed.

b) The Applicant shall also upload the details of all the invoices on the basis of which input tax credit has been availed during the relevant period for which the refund is being claimed, in the format enclosed as Annexure-B ( given below at para J ).

c) Self-certified copies of invoices which are declared as eligible for ITC in Annexure – B, but which are not populated in FORM GSTR-2A, shall be uploaded by the applicant along with the refund application. I feel this requirement to upload invoices which are not found in 2A, has become infructuous because refund shall be granted only against those invoices which had been available in 2A as per clarification in circular 135/5/2020 but till date this requirement has not been modified/deleted.

d) Valuation of Turnover of Zero Rated Supply of Goods has been restricted to maximum up to 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier. Vide Notification No.16/2020 clause (C) of rule 89 (4) has been replaced with followings:

“(C) “Turnover of zero-rated supply of goods” means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking or the value which is 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier, whichever is less, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both;‟.

e) The proper officer shall not insist on the submission of an invoice (either original or duplicate) the details of which are available in FORM GSTR-2A.

> For refund of tax paid on deemed exports

a) The third proviso to rule 89(1) of the CGST Rules allows either the recipient or the supplier to apply for refund of tax paid on such deemed export supplies.

Notification 49/2017 requires following evidences in the case of refund pertaining to Deemed Exports

b) Acknowledgment by the jurisdictional Tax officer of the Advance Authorisation holder or Export Promotion Capital Goods Authorisation holder, as the case may be, that the said deemed export supplies have been received by the said Advance Authorisation or Export Promotion Capital Goods Authorisation holder, or a copy of the tax invoice under which such supplies have been made by the supplier, duly signed by the recipient Export Oriented Unit that said deemed export supplies have been received by it.

c) An undertaking by the recipient of deemed export supplies that no input tax credit on such supplies has been availed of by him and he shall not claim the refund in respect of such supplies and the supplier may claim the refund.

d) In case the refund is filed by the recipient of deemed export supplies, an undertaking shall have to be furnished by him stating that refund has been claimed only for those invoices which have been detailed in statement 5B of GST RFD-01 for the tax period for which refund is being claimed and that he has not availed input tax credit on such invoices. The recipient shall also be required to declare that the supplier has not claimed refund with respect to the said supplies.

> Refund of TDS/TCS deposited in excess

a) Where tax so deducted or collected is deposited under the wrong head (e.g. an amount deducted as Central tax is deposited as Integrated tax/State tax), thereby creating excess balance in the cash ledger of the deductor or the collector as the case may be. It is clarified that such excess balance may be claimed by the tax deductor or the collector as the excess balance in electronic cash ledger.

b) In case where tax deducted or collected in excess is also paid while discharging the liability in FORM GSTR 7 or FORM GSTR 8, as the case may be, and the said amount has been credited to the electronic cash ledger of the deductee, the deductee can adjust the same while discharging his output liability or he can claim refund of the same under the category “refund of excess balance in the electronic cash ledger.

> Refund of Integrated Tax paid on Exports

The refund of Integrated tax paid on goods exported out of India is governed by rule 96 of the CGST Rules. The shipping bill filed by an exporter is deemed to be an application for refund in such cases, but the same is deemed to have been filed only when the export manifest or export report is filed and the applicant has filed the return in FORM GSTR-3B for the relevant period duly indicating the integrated tax paid on goods exported in Table 3.1(b) of FORM-GSTR-3B. In addition, the exporter is expected to furnish the details of the exported goods in Table 6A of FORM GSTR-1 of the relevant period. Only where the common portal is able to validate the consistency of the details so entered by the applicant, the relevant information regarding the refund claim is forwarded to Customs Systems. Upon receipt of the information from the common portal regarding furnishing of these details, the Customs Systems processes the claim for refund and an amount equal to the Integrated tax paid in respect of such export is electronically credited to the bank account of the applicant.

G. Clarifications on issues related to making zero-rated supplies

a) Export of goods have been made before furnishing of LUT Bond. In such cases the delay in furnishing of LUT may be condoned and the facility for export under LUT may be allowed on ex post facto basis taking into account the facts and circumstances of each case.

b) The Exporter would be liable to pay the tax due along with the interest as applicable within a period of fifteen days after the expiry of three months or such further period as may be allowed by the Commissioner from the date of issue of the invoice for export, if the goods are not exported out of India. The time period in case of services is fifteen days after the expiry of one year or such further period as may be allowed by the Commissioner from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.

It is emphasized that exports have been zero rated under the IGST Act and as long as goods have actually been exported even after a period of three months, payment of Integrated tax first and claiming refund at a subsequent date should not be insisted upon. In such cases, the jurisdictional Commissioner may consider granting extension of time limit for export as provided in the said sub-rule on post facto basis keeping in view the facts and circumstances of each case.

c) Where the value declared in the tax invoice is different from the export value declared in the corresponding shipping bill under the Customs Act, the lower of the two values should be taken into account while calculating the eligible amount of refund.

d) It is clarified that insistence on proof of realization of export proceeds for processing of refund claims related to export of goods has not been envisaged in the law and should not be insisted upon.

e) It is clarified that in respect of refund claims on account of export of non-GST and exempted goods without payment of Integrated tax; LUT/bond is not required.

f) Rule 96B of CGST Rules has been inserted vide notification no.16/2020 –GST dated 23-03-2020 to recover the refund where export proceeds not realised within stipulated time.

H. Clarification on calculation of refund amount for claims of refund of accumulated ITC on account of inverted tax structure

It is clarified that while processing the refund of unutilized ITC on account of inverted tax structure the Tax Authorities cannot deny refund of ITC of GST paid on those inputs which are procured at equal or lower rate of GST than the rate of GST on outward supply. For example multiple inputs such as inputs @ 5% and inputs @ 18% are used for outward supply which gst rate is 12%. While computing the refund both inputs i.e. rate of 5% and rate of 18% will be considered.

Vide Circular 135/05/2020 dated 31-03-2020 has been clarified that refund shall not be allowed where supplies of inward and outward are same. This is the case where rate of GST for item X was 18% but the rate on such item has been reduced to 12%. On such case refund can not be claimed.

I. Clarifications in regard of Input Tax Credit

a) Supplies for export at concessional rate 0.5% and 0.1% respectively. It is clarified that the exporter will be eligible to take credit of the tax @ 0.05% / 0.1% paid by him. The supplier who supplies goods at the concessional rate is also eligible for refund on account of inverted tax structure.

b) It is clarified that the input tax credit of invoices issued in August, 2019, “availed” in September, 2019 cannot be excluded from the calculation of the refund amount for the month of September, 2019.

c) It is clarified that the ITC of the GST paid on inputs, including inward supplies of stores and spares, packing materials etc., shall be available as ITC as long as these inputs are used for the purpose of the business and/or for effecting taxable supplies, including zero-rated supplies, and the ITC for such inputs is not restricted under section 17(5) of the CGST Act. Further, capital goods have been clearly defined in section 2(19) of the CGST Act as goods whose value has been capitalized in the books of account and which are used or intended to be used in the course or furtherance of business. Stores and spares, the expenditure on which has been charged as a revenue expense in the books of account, cannot be held to be capital goods.

J. Clarifications vide Circular 135/05/2020 dated 31-03-2020

1. Refund pertaining to period of different financial yearsRestriction on bunching of refund claims across financial years shall not apply. For example Refund Application can be filed by clubbing of months of March 2019 and April 2019 and for two difference quarters of different years say 4th quarter of 2018-19 and 1st quarter 2019-20.

2. Refund of accumulated input tax credit (ITC) on account of reduction in GST Rate – It is clarified that refund of accumulated ITC under clause (ii) of sub-section (3) of section 54 of the CGST Act would not be applicable in cases where the input and the output supplies are the same. For example An applicant trading in goods has purchased, say goods “X” attracting 18% GST. However, subsequently, the rate of GST on “X” has been reduced to, say 12%. Accumulation of ITC on such case shall not be applicable for the purpose of refund because of the input and output supplies are same.

3. Change in manner of refund of tax paid on supplies other than zero rated supplies – Mode of refund in following cases shall be the same in which the same had been paid. If payment of tax had been made through after adjustment of input tax credit then refund if granted, shall be paid by re-credited to the electronic credit ledger. If the amount to be refunded had been paid in cash then same shall be refunded in cash form. If the amount to be refunded partly in cash and partly by adjusted input tax credit then the same shall be refunded proportionately in cash and re-credited to the credit ledger. Such types of refunds are as under:

3.1 Refund of excess payment of tax

3.2 Refund of tax paid on intra-State supply which is subsequently held to be inter-State supply and vice versa;

3.3 Refund on account of assessment/provisional assessment/appeal/any other order;

3.4 Refund on account of “any other” ground or reason.

4. Guidelines for refunds of Input Tax Credit under Section 54(3)While consider rule 36(4) inserted vide notification 49/2019-GST dated 09-10-2019, the refund of accumulated ITC shall be restricted to the ITC as per those invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant. Accordingly, para 36 of the circular No. 125/44/2019-GST, dated 18.11.2019 stands modified to that extent.

5. New Requirement to mention HSN/SAC in Annexure ‘B’The Refund Applicant shall be required to mention HSN/SAC code which is mentioned on the inward invoices. In cases where supplier is not mandated to mention HSN/SAC code on invoice, the applicant need not mention HSN/SAC code in respect of such an inward supply.

Modified format of Annexure “B” has been provided as below.

K. Tracking GST Refund Application Status on the GST Portal

The Government has issued Advisory: Tracking GST Refund Application Status on the GST Portal and PFMS portal. To read this advisory you may click on following link.

https://taxguru.in/goods-and-service-tax/tracking-gst-refund-application-status-gst-portal- pfms-portal.html

L. Annexures “A” and “B” appended to Circular 125/44/2019

Annexure-A

List of all statements/declarations/undertakings/certificates and other supporting documents to be provided along with the refund application

S.No. Type of Refund Declaration/ Statement/ Undertaking/ Certificates to be filled online Supporting documents to be additionally uploaded
1 Refund of unutilized ITC on account of exports without payment of tax Declaration under second and third proviso to section 54(3) Copy of GSTR-2A of the relevant period
Undertaking in relation to sections 16(2)(c) and section 42(2) Statement of invoices (Annexure-B)
Statement 3 under rule 89(2)(b) and rule 89(2)(c) Self-certified copies of invoices entered in Annexure-B whose details are not found in GSTR-2A of the relevant period.

I feel this requirement to upload invoices which are not found in 2A, has become infructuous because refund shall be granted only against those invoices which had been available in 2A as per clarification in circular 135/5/2020 but till date this requirement has not been modified /deleted.

Statement 3A under rule 89(4) BRC/FIRC in case of export of services and shipping bill (only in case of exports made through non-EDI ports) in case of goods
2 Refund of tax paid on export of services made with payment of tax Declaration under second and third proviso to section 54(3) BRC/FIRC /any other document indicating the receipt of sale proceeds of services
Undertaking in relation to sections 16(2)(c) and section 42(2) Copy of GSTR-2A of the relevant period
Statement 2 under rule 89(2)(c) Statement of invoices (Annexure-B)
Self-certified copies of invoices entered in Annexure-A whose details are not found in GSTR-2A of the relevant period
Self-declaration regarding non-prosecution under sub-rule (1) of rule 91 of the CGST Rules for availing provisional refund
3 Refund of Unutilized ITC on account of Supplies made to SEZ units/ developer without payment of tax Declaration under third proviso to section 54(3) Copy of GSTR-2A of the relevant period
Statement 5 under rule 89(2)(d) and rule 89(2)(e) Statement of invoices (Annexure-B)
Statement 5A under rule 89(4) Self-certified copies of invoices entered in Annexure-B whose details are not found in GSTR-2A of the relevant period
Declaration under rule 89(2)(f) Endorsement(s) from the specified officer of the SEZ regarding receipt of goods/ services for authorized operations under second proviso to ule 89(1)
Undertaking in relation to sections 16(2)(c) and section 42(2)
Self-declaration under rule 89(2)(l) if amount claimed does not exceed two lakh rupees, certification under rule 89(2)(m) otherwise
4 Refund of tax paid on supplies made to SEZ units/ developer with payment of tax Declaration under second and third proviso to section 54(3) Endorsement(s) from the specified officer of the SEZ regarding receipt of goods/ services for uthorized operations under second proviso to rule 89(1)
Declaration under rule 89(2)(f) Self-certified copies of invoices entered in Annexure-A whose details are not found in GSTR-2A of the relevant period
Statement 4 under rule 89(2)(d) and rule 89(2)(e) Self-declaration regarding non-prosecution under sub-rule (1) of rule 91 of the CGST Rules for availing provisional refund
Undertaking in relation to sections 16(2)(c) and section 42(2)
Self-declaration under rule 89(2)(l) if amount claimed does not exceed two lakh rupees, certification under rule 89(2)(m) otherwise
5 Refund of ITC unutilized on account of accumulation due to inverted tax structure Declaration under second and third proviso to section 54(3) Copy of GSTR-2A of the relevant period
Declaration under section 54(3)(ii) Statement of invoices (Annexure-B)
Undertaking in relation to sections

16(2)(c) and section 42(2)

Self-certified copies of invoices entered in Annexure-B whose details are not found in GSTR-2A of the relevant period
Statement 1 under rule 89(5)
Statement 1A under rule 89(2)(h)
Self-declaration under rule 89(2)(l) if amount claimed does not exceed two lakh rupees, certification under rule 89(2)(m) otherwise
6 Refund to supplier of tax paid on deemed export supplies Statement 5(B) under rule 89(2)(g) Documents required under Notification No. 49/2017-Central Tax dated 18.10.2017 and Circular No. 14/14/2017-GST dated 06.11.2017
Declaration under rule 89(2)(g)  

 

Undertaking in relation to sections 16(2)(c) and section 42(2)
Self-declaration under rule 89(2)(l) if amount claimed does not exceed two lakh rupees, certification under rule 89(2)(m) otherwise
7 Refund to recipient of tax paid on deemed export supplies Statement 5(B) under rule 89(2)(g) Documents required under Circular No. 14/14/2017-GST dated 06.11.2017
Declaration under rule 89(2)(g)
Undertaking in relation to sections 16(2)(c) and section 42(2)
Self-declaration under rule 89(2)(l) if amount claimed does not exceed two lakh rupees, certification under rule 89(2)(m) otherwise
8 Refund of Excess payment of tax Statement 7 under rule 89(2)(k)
Undertaking in relation to sections 16(2)(c) and section 42(2)
Self-declaration under rule 89(2)(l) if amount claimed does not exceed two lakh rupees, certification under rule 89(2)(m) otherwise
9 Refund of tax paid on intra-state supply which is subsequently held to be an inter-state supply and vice versa Statement 6 under rule 89(2)(j)
Undertaking in relation to sections 16(2)(c) and section 42(2)
10 Refund on account of assessment /provisional assessment/ appeal/any other order Undertaking in relation to sections 16(2)(c) and section 42(2) Reference number of the order and a copy of the Assessment / Provisional Assessment/ Appeal/ Any other Order
Self-declaration under rule 89(2)(l) if amount claimed does not exceed two lakh rupees, certification under rule 89(2)(m) otherwise Reference number/ proof of payment of pre-deposit made earlier for which refund is being claimed
11 Refund on account of any other ground or reason Undertaking in relation to sections 16(2)(c) and section 42(2) Documents in support of the claim
Self-declaration under rule 89(2)(l) if amount claimed does not exceed two lakh rupees, certification under rule 89(2)(m) otherwise

Annexure-B

Statement of invoices to be submitted with application for refund of unutilized ITC

Sr. No.
GSTIN of the Sup-plier
Name of the Sup-plier
Invoice Details
Category of input supplies
Central Tax
State Tax/ Union Terri-tory Tax
Integrated Tax
Cess
Eligible for ITC
Amount of Eligible ITC
Invoice No.
Date
Value
Inputs/ Input Servi-ces/ Capital Goods
HSN/ SAC
Yes/ N0/ Parti-ally
1
2
3
4
5
6
7
8
9
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M. Relevant Sections and Rules in regard of Refund

S.No. Sections/ Rules Sub-Sections/ Sub-Rules Particulars
1 54  (1) Refund Procedure and limitation period to apply for refund
(2) Refund in regard of UNO etc.. persons notified under section 55
(3) Mention type of persons who can claim refund of any unutilised input tax credit
(4) Documents prescribed to be accompanied with Refund Application
(5) Order for Refund and credited to the Fund referred to in section 57
(6) Provisional Refund on refund application on account of zero-rated supply of goods or services or both
(7) Limitation period of sixty days to make an order for refund
(8) List of refund which shall be paid to the Applicant instead of being credited to the Fund
( 8A ) Disburse the refund of the State Tax
( 9 ) Refund shall be made only in accordance of the provisions of the sub-section 8. No other matter whatsoever shall be considered.
( 10 ) Withhold payment of Refund
( 11 ) Withhold the Refund
( 12 ) Entitlement of interest on payment of Refund
( 13 ) Withholding of Refund in regard of Casual Taxable Person or Non-Resident Taxable Person
( 14 ) Non-Payment of Refund if amount of refund less than Rs.1000/=
Explanation Of Refund and of Relevant Date
2 55 Notify persons such as UNO etc.. for entitlement for claim of refund subject to conditions prescribed
3 56 Interest on Delayed Refunds
Rules
S.No. Sections/ Rules Sub-Sections/ Sub-Rules Particulars
1 89

Application for Refund

( 1 ) Procedure to file refund application and mention form nos.
( 2 ) Prescribed documents to be accompanied with refund application
( 3 ) Refund amount debit to the Electronic Credit Ledger
( 4 ) Formula for grant of refund of input tax credit in the case of zero-rated supply without payment of tax
( 4A ) Allow Refund on supplies received on which the supplier has availed the benefit of the Government of India
( 4B ) Allow Refund on supplies received on which the supplier has availed the benefit of the Government of India
( 5 ) Formula for grant of refund on account of inverted duty structure
2 90

Acknowledgement

( 1 ) Acknowledgement in form GST RFD-02 made available for application relates to claim for refund from the electronic cash ledger
( 2 ) Acknowledgement in form GST RFD-02 made available for application for refund other than claim for refund from the electronic cash ledger
( 3 ) Deficiency Memo in Form GST RFD-03
( 4 ) Deficiency communicated under one Act shall be deemed to be communicated in other Act
3 91

Provisional Refund

( 1 ) Conditions before granting Provisional Refund
( 2 ) Seven days period to make an order for Provisional Refund in form GST RFD-04
( 3 ) Payment order in Form GST RFD-05
( 4 ) Central Govt.shall disburse the refund
4 92

Order Sanctioning Refund

( 1 ) Order for sanctioning the amount of Refund in form GST RFD-06
( 1A ) About adjustment of outstanding liabilities against refund granted and balance re-crediting to the electronic ledger
( 2 ) Order for withholding the refund in GST RFD-07
( 3 ) Issue a notice in form GST RFD-08 in regard of refund is not admissible or not payable.

Requiring reply in form GST RFD-09 within 15 days of the receipt of such notice

( 4 ) Payment Order in form GST RFD-05
( 4A ) Central Govt.shall disburse the refund
( 5 ) Amount Refundable not payable to the Applicant, credited to the Consumer Welfare Fund
5 93

Credit of the amount of rejected Refund claim

( 1 ) Re-credited in case of deficiency communicated under rule 90 (3) or amount debited under rule 89 (3)
( 2 ) Re-credited refund is rejected under rule 92
Explanation About Refund deemed to be rejected
6 94

Order sanctioning interest

Order for sanctioning the interest
7 95

Refund of tax to certain persons

( 1 ) Refund Application in Form GST RFD-10 and detail of inward supplies in Form GST RFD-11 by the person (UNO etc.) notified under section 55
( 2 ) Acknowledgement towards refund application in GST RFD-02
( 3 ) Restrictions and conditions to be fulfilled before made available of refund
( 4 ) Provisions of rule 92 shall ,mutatis mutandis, apply for sanctioning the refund
( 5 ) About Treaty or International Agreement
8 96. Refund of IGST paid on goods or services exported out of India ( 1 ) Conditions for Application deemed to be filed
( 2 ) Transmission of Export Invoices to the system designated by the custom for confirmation that goods covered by the invoices have been exported out of India.
( 3 ) Process the refund application and refund amount credited to the bank account of the Applicant
( 4 ) Withholding of the Refund
( 5 ) Intimation of withholding of the Refund
( 6 ) Order passed by the Proper Officer in form GST RFD-07 in regard of withholding of the refund
( 7 ) Proceed to the withholding refund after entitlement
( 8 ) Refund of IGST to the Bhutan Government. Such refund shall not be paid to the Exporter
( 9 ) Refund Application for IGST paid on services exported out of India be filed in form GST RFD-01
( 10 ) Restricted exporters from availing the facility of claiming refund of Integrated tax paid on exports in certain scenarios
9 96A

Export of Goods or services under Bond or Letter of Undertaking

( 1 ) Export of Goods or Services without payment of IGST subject to furnish of Bond or LUT in form GST RFD-11 with condition to pay the tax with interest if goods or services are not exported out of India within stipulated time.
( 2 ) Details of Export Invoices contained in GSTR-1 electronically transmitted to the system designated by the custom to verify goods covered under invoices have been exported out of India.
( 3 ) Withdrawn of Bond or LUT in case of non-payment of tax with interest if export had not been done within stipulated time.
( 4 ) Restoration of Bond or LUT immediate after payment of tax with interest
( 5 ) Conditions and safeguards may be notified for furnish of Bond or LUT
( 6 ) Provisions of Bond or LUT shall be mutatis mutandis apply in respect of supply to SEZ or SEZU.
10 96B

Recovery of refund of unutilised input tax credit or integrated tax paid on export of goods where export proceeds not realised

( 1 ) Refund has been paid s in respect of such export goods have not been realised, in full or in part, in India within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), including any extension of such period, the person to whom the refund has been made shall deposit the amount so refunded, to the extent of non realisation of sale proceeds, along with applicable interest within thirty days of the expiry of the said period or, as the case may be, the extended period, failing which the amount refunded shall be recovered in accordance with the provisions of section 73 or 74 of the Act, as the case may be, as is applicable for recovery of erroneous refund, along with interest.
Proviso to sub rule ( 1) Where sale proceeds, or any part thereof, in respect of such export goods are not realised by the applicant within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), but the Reserve Bank of India writes off the requirement of realisation of sale proceeds on merits, the refund paid to the applicant shall not be recovered.
( 2 ) Where the sale proceeds are realised by the applicant, in full or part, after the amount of refund has been recovered from him under sub-rule (1) and the applicant produces evidence about such realisation within a period of three months from the date of realisation of sale proceeds, the amount so recovered shall be refunded by the proper officer, to the applicant to the extent of realisation of sale proceeds, provided the sale proceeds have been realised within such extended period as permitted by the Reserve Bank of India

N. List of Circulars issued till date in regard of Refund Issues

S.No. Date of Circular Circular No. Subject Particulars
1 15/03/2018 37/2018 Rescinded by circular 125/2019 Export related refund issues
2 03/05/2018 45/2018 Rescinded by circular 125/2019 Refund related issues
3 04/09/2018 59/2018 Rescinded by circular 125/2019 Refund related issues
4 14/09/2018 63/2018 Refund Processing of refund claims filed by UIN entities
5 05/10/2018 68/2018 Refund Refund of compensation cess to UN
6 26/10/2018 70/2018 Rescinded by circular 125/2019 Refund related issues
7 27/12/2018 75/2018 Refund Financial assistance by Refund of GST to Gurdwara, Temples etc.providing free food to devotees
8 31/12/2018 79/2018 Rescinded by circular 125/2019 Refund related issues
9 28/03/2019 94/2019 Rescinded by circular 125/2019 Refund related issues
10 03/10/2019 110/2019 Refund Eligibility to file a refund application in FORM GST RFD-01 for a period and category under which a NIL refund application has already been filed
11 16/11/2017 18/2017 Refund Exporters of Fabrics
12 14/06/2018 48/2018 Refund Independent fabric processors (job workers) in the textile sector supplying job work services
13 24/08/2018 56/2018 Refund Clarification on removal of restriction on refund of accumulated Input Tax Credit on fabrics
14 29/06/2019 106/2019 Refund Refund of taxes paid on inward supply of indigenous goods by retail outlets established at departure area of the international airport beyond immigration counters when supplied to outgoing international tourist against foreign exchange.
15 03/10/2019 111/2019 Refund Procedure to claim refund in FORM GST RFD-01 subsequent to favourable order in appeal or any other forum
16 31/03/2020 135/2020 Refund Clarification on various issues.
17 15/11/2017 17/2017 Rescinded by circular 125/2019 Manual Filing and processing in respect of Zero Rated Supplies
18 21/12/2017 24/2017 Rescinded by circular 125/2019 Manual filing and processing on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger
19 13/03/2018 36/2018 Refund Application UIN entities
20 13/04/2018 43/2018 Refund Application UIN entities
21 04/09/2018 60/2018 Refund Application Canteen Stores Department (CSD)
22 28/06/2019 104/2019 Refund Application Processing of refund applications in FORM GST RFD-01A submitted by taxpayers wrongly mapped on the common portal
23 18-11-2019 125/2019 Refund Application Electronic Clarify the fully electronic refund process through FORM GST RFD-01 and single disbursement.
24 04/10/2017 8/2017 LUT Bond Detailed clarifications on LUT Bond. Amended by circular 88/2019.
25 06/04/2018 40/2018 LUT Bond Clarification on issues related to furnishing of Bond/Letter of Undertaking for exports
26 01/08/2019 88/2019 LUT Bond Amending Circular 8/2017

To reach to me for any suggestion, rectification, amendment and/or further clarification in regard of this article my email address is pkmgstupdate@gmail.com.

Republished with Amendments.

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13 Comments

  1. Rohan Trivedi says:

    Sir, while filling GSTR-3B client have shown export sales in 3.1(a) instead of 3.1(b) but details have been correctly shown in tabel 6A of GSTR-1. How to rectify the mistake in GSTR-3B?

  2. VISHAL TANWAR says:

    Sir, while receiving refund on account of ITC of export, the ITC which was rejected by the department, do we need to pay it via DRC-03 , as ITC amount already debited in our credit ledger???

  3. Santhakumar says:

    Sir when I filed the GSTR 3B return for the month of Feb 2020, wrongly entered some IGST amount instead of zero and this tax amount was paid through electronic CREDIT ledger (we have only sales within the state) how can I rectify this mistake with March GST return…now effectively electronic credit ledger balance was reduced with this wrong IGST payment. In this case can I apply for refund, please give me an answer.

  4. CA LOCHAN says:

    Hello Sir, Thanks for sharing such a informative article.
    I have a querry…While Filling Refund application under inverted tax structure, we need to upload Annexture-2A and Statement 1A. Do we need to give details of all the Purchase invoices during the tax period. Do invoices of Purchase of Capital Goods also need to be given as the same are also reflected in 2A.?

  5. JITENDRA says:

    80% of our sales Exports& Sez Sales agains LUT. In 17-18 our t.o.below 1 Cr. but, in 18-19 we filed monthly GSTR1 , ( Q1 ) can we Apply Refund Quarterly Apr-June-18 (Q2) can we Apply Refund Monthly as we filed monthly GSTR1 (Q3) Can we file Apply Refund Apr-Sept-18 as June-18 Pur are reflicting in Sept-18 2A.

    1. PARVEENMAHAJAN says:

      The person filing monthly returns, can apply refund monthly or quarterly or clubbing with months as he wishes for example he can file one refund application for months aug, sept, oct and nov but the quarterly filing returns can file quarterly only or clubbing with quarters for example that person may file one refund application for quarter 1 and quarter 2 of 2019-20.

  6. Jitin Sachdeva says:

    Hello, while filing gst refund application. I could see, that drop down menu, has fy July 2017, fy 2017-18 too. My query is, will there be a limitation of 2 years from payment date or not since portal is allowing me to file refund claims for July 17 too. Pls respond.

    Article is good, and covers nearly everything

    1. PARVEENMAHAJAN says:

      Limitation period to file the refund application has been specified in the article. Check limitation period according to the facts and file the same in the portal. If the portal is accepted I advise file it.

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