Refunds process under GST... (Part I)

Hello everyone,

As we all know refunds are the crucial part of maintaining Working Capital intact, under current tax regime refund process is very complex and it may take years to get refund. So, to promote "Make in India" programme and encourage Manufacturers & Exporters, Government has made simple & easy procedures of Refund with 90% of refund to exporters within 7 days under GST.

So, let us learn about Refunds under GST  in Two Parts-

Part - I - Deals with Types of Refund, Eligibility Criteria for claiming Unutilised ITC & Forms required for Refund

Part - II - Deals with Relevant Date Meaning, Forms for claiming Refund of Unutilized ITC, and Different forms prescribed under Refund Ruls & their description, Interest on delay of Refund, Transfer of Refund to Consumer Welfare Fund.

Refunds under GST are divided in to 4 major Categories:

  1. Unutilized Input Tax Credit.
  2. Balance in Electronic Cash Ledger.
  3. Refund by persons specified under Sec.55 ( embassy's, Agencies of UNO etc.,) 
  4. Advance Tax paid by Casual Tax Payer or Non Resident Tax Payer.
Following are different situations where refund can be claimed (Which may fall under aforementioned 4 Categories)


(A) Excess payment of tax due to mistake or inadvertence.
(B) Export (including deemed export) of goods / services under claim of rebate or Refund of accumulated input credit of duty / tax when goods / services are exported.
(C) Finalization of provisional assessment.
(D) Refund of Pre – deposit for filing appeal including refund arising in pursuance of an appellate authority’s order (when the appeal is decided in favor of the appellant).
(E) Payment of duty / tax during investigation but no/ less liability arises at the time of finalization of investigation / adjudication.
(F) Refund of tax payment on purchases made by Embassies or UN bodies.
(G) Credit accumulation due to output being tax exempt or nil-rated.
(H) Credit accumulation due to inverted duty structure i.e. due to tax rate differential between output and inputs.
(I) Year-end or volume based incentives provided by the supplier through credit notes.

(J) Tax Refund for International Tourists. 


Eligibility & ineligibility criteria for Refund under GST:


Important Notes:

Note 1:
 “refund” includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zerorated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3) 

Note 2:
 If the person has defaulted in furnishing return or if the person is required to pay any taxes, then proper officer may withhold the refund or may deduct tax payable from the refund amount

Note 3: 
If refund is on account of export or supply to SEZ, then 90% amount shall be refunded on provisional basis. 


Details of forms required and time limit for claiming these refunds are hereunder:


I will be posting Part -II in next two days.

Regards 
Kumara Swamy A




  

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