1. In the Following Situations, Refund can be claimed in Goods and Services Tax (GST):

  • Export of Goods or Services ( Including Deemed Export)
  • Refund of Unutilized Input Tax Credit
  • Refund from Manufacturing / Generation/ Production – tax free supplies
  • Excess payment due to mistake and inadvertence
  • Finalization of Provisional Assessment
  • Refund for Tax payment on transactions by UN bodies,CSD Canteens, Para-military forces canteens, etc
  • Refund of pre deposit in case of Appeal.

1.1 Export of Goods or Services (Including Deemed Export)

A. In case of exports of goods and! or services out of India on which export duty is not payable then tax paid inputs and claiming refund of the paid taxes at the time of export.

B. In case of exports of goods and! or services out of India on which export duty is payable then availing the input tax credit of duty paid inputs and exporting finished goods after payment of duty (after utilizing such input tax credit) and thereafter claiming the rebate of the duty paid on export. Refund of the unutilized input tax credit can’t be claimed.

1.2 Refund of Unutilized Input Tax Credit

Refund of the unutilized input tax credit can be claimed at the end of any tax period If rate of tax on inputs is higher than the rate of tax on outputs.

1.3 Refund from Manufacturing / Generation/ Production/creation of tax free supplies Refund of tax paid on inputs used for the Manufacturing ! Generation! Production!creation of tax free supplies.

1.4 Excess payment due to mistake and inadvertence

Refund of Excess payment of tax either by mistake or by inadvertence resulting in more payment of tax than due to the Government.

1.5 Finalization of Provisional Assessment

When assesse will be entitled to Refund in the consequent to the order for finalAssessment.

1.6 Refund for Tax payment on transactions by UN bodies, CSD Canteens, Para-military forces canteens etc.

Supply to UN Bodies, Embassies, CSD Canteens and Para-military forces canteen will be taxed, which later on can be claimed as refund by them.

UN Bodies, Embassies, CSD Canteens and Para-military forces canteen will be required to take a Unique Identity Number and purchases made by them will be reflected in the return of outward supplies of the supplier and refunds of taxes can be granted.

1.7 Refund of pre deposit in case of Appeal

Where an amount deposited by the appellant for appeal is required to be refunded consequent to any order of the First Appellate Authority or of the Appellate Tribunal.

2. Relevant Date for Claiming Refund

For claiming refund, application shall be made within 2 years from the relevant date. If refund of tax and interest has been paid under protest then the limitation of 2 years shall not be apply.

Relevant Date means:-

Situation Relevant Date
Goods are exported by sea or air Date on which the Ship or the Aircraft in which such goods are loaded, leaves India
Goods are exported by land Date on which such goods pass the frontier
Goods are exported by post Date of dispatch of goods by Post Office concerned
Goods regarded as deemed exports Date on which the return relating to such deemed exports is filled.
Services exported out + supply of service had been completed prior to the receipt of payment Date of Receipt of payment
Services exported out + payment received in advance prior to the date of issue of the invoice Date of Issue of invoice
Tax refundable in consequence of judgment, decree, order or direction of Appellate Authority, Appellate Tribunal or any Court Date of communication of such judgment, decree, order or direction
Unutilized input tax credit End day of the financial year in which such claim for refund arises
Tax is paid provisionally under this Act Date of adjustment of tax after the final assessment

3. Eligibility for getting Refund by Applicant

Refund shall be paid to the applicant, if such amount is relatable to –

A) Refund of tax and interest or any other amount paid by the applicant + he had not passed such tax and interest to any other person

B) Tax or interest borne by such other class of applicants notified by as the Central or State Government on the recommendation of the Council.

On receipt of any application, if proper officer is satisfied that the whole or part of the amount claimed as refund is not eligible for refund then he may make an order accordingly and amount so determined shall be credited to the Consumer Welfare Fund.

4. Time Limit for Granting Refund

Refund order will be sanctioned within ninety days from the date of receipt of complete application.

If any refund amount is not refunded within three months from the date of receipt of application then interest at such rate as may be specified in the notification issued by the Central or a State Government on the recommendation of the Council shall be payable in respect of such refund from the date immediately after the expiry of the due date till the date of refund of such tax.

5. Other Important Provisions

  • If refund amount is less than Rs. 1,000/- then no refund shall be paid.
  • where an order giving rise to a refund is the subject matter of an appeal or further proceeding or where any other proceeding under this Act is pending and the Commissioner / Board is of the opinion that grant of such refund is likely to adversely affect the revenue then after giving an opportunity of being heard to assessee withhold the refund till such time as it will determine in appeal or proceeding as the case may be.
  • Where a refund is withheld in previous provision and assessee shall be entitled to interest on such refund, if result of the appeal or proceeding will be in favour of
  • The applicant must submit documentary evidences including invoice or similar document which are issued by him to establish the fact that incidence of tax/interest/amount paid was not passed on by the applicant to any other person.

If the amount of refund claim is less than Rs.5 lakhs, there is no need of filing such documentary evidence instead, a self-declaration based on the documentary and other evidences by the applicant certifying that he has not passed on the incidence of such tax and interest is sufficient to claim refund.

  • It is also provided that in case of refund claim by notified registered taxable person where refund is on account of export of goods and/or services, refund will be limited to 80% of the total amount claimed (excluding input tax credit not yet finalized).

This refund of 80% will be on a provisional basis, and will be subject to certain conditions. Remaining 20% may be refunded after due verification of documents furnished by the applicant.

(Author- CA Rishi Goyal , Mobile-+91-9827647654, Email-carishi.rg@gmail.Com)

Input Credit Scheme Under GST

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