Refund Under GST Law

1. Compiled By –
Mohd Faraz | Executive | Indirect Tax Vertical
Asija & Associates LLP | Chartered Accountants
gst@asija.in
Chapter XI of CGST Act
Read with Refund Rules prescribed

2. WHAT IS REFUNDABLE
In which cases Refund shall be allowed?
■ Refund shall be allowed :
 On Tax paid, on a supply which is not provided and for which Invoice has not
been issued or where a refund voucher has been issued.
 Tax or Interest or any other amount paid, provided the incidence of such tax and
interest has not been passed on to any other person.
 Refund of Unutilised Input Tax Credit.
 Where the person paid tax as Intra-State but subsequently, the supply is to be held
as Inter-State and vice-versa. The additional amount of tax paid shall be refunded.
 On Tax paid on Zero-Rated supplies of Goods or Services or both or
 On Inputs or Input Services used in making such zero-rated supplies.
 Integrated Tax paid on goods exported out of India*.
 Any Specialised Agency of UNO or any Multilateral Financial Institution and
Organisation which are notified*.
gst@asija.inGST Wing | Asija & Associates LLP

3. Refund of Unutilised Input Tax Credit.
■ A registered person may claim refund of any Unutilised Input Tax Credit at the
end of any tax period.
■ Unutilised ITC shall be allowed only in the case of :-
 Zero-Rated supplies made without payment of tax.
 Where the Credit has accumulated on account of rate of tax on Inputs being
higher than the rate of tax on Output Supplies except:-
 For Notified goods or services by the government or
 Output supplies of Nil Rated or fully exempt supplies.
■ Unutilised ITC shall Not be allowed in cases where:
 The goods exported out of India are subjected to Export Duty.
 The supplier of goods or services or both avails of drawback in respect of CGST
or claims refund of the IGST paid on such supply.
gst@asija.inGST Wing | Asija & Associates LLP

4. How To Claim Refund
■ Any Person can make application for claiming refund, but is should be:-
 Filed in FORM GST RFD-01
 It shall be e-filed on the GST portal (gst.gov.in)
 Should be filed with 2 years from the relevant date*
■ A registered Person can claim refund of balance in Electronic Cash Ledger:-
 By furnishing information in PART B of Form GSTR – 3, (Monthly Return)
 Such Return shall be deemed to be application for Refund
gst@asija.inGST Wing | Asija & Associates LLP

5. Documents for Claiming Refund
■ The Application for claim of Refund shall be accompanied by:-
 Where the amount claimed as refund is less than 2 Lakhs:-
 No documents shall be required to be filed, but
 Will file a declaration, certifying, that the incidence of tax and interest has not
been passed on to any other person.
 Where the amount claimed as refund is 2 Lakhs or above the Application shall be
accompanied by following documents :-
 Statement showing details of amount of claim is due to excess payment of tax.
 Statement containing number and date of Invoices received and issued during a tax
period, in case of refund of unutilised ITC (Due to rate of tax on the inputs being
higher than the rate of tax on output supplies).
gst@asija.inGST Wing | Asija & Associates LLP

6. Documents for Claiming Refund
 A statement showing details of transactions considered as Intra-State supply
but which is subsequently held to be Inter-State Supply.
 A Certificate in Annexure-2 of FORM GST RFD-01 issued by a Chartered
Accountant or a Cost Accountant to the effect that the Incidence of Tax,
interest or any other amount claimed as refund has not been passed on to any
other person, in a case where the amount of refund claimed exceeds ₹2 Lakhs.
 The reference number and a copy of the of the final assessment order. In case
where refund arise on account of Finalisation of provisional assessment.
 Reference No. of order and copy of Order passed by the Proper Officer/Appellate
Tribunal/Court.
 Statement containing number and date of shipping bills / bills of export &
number and date of relevant export invoices. (Export of Goods).
 Statement containing number and date of invoices & Bank Realisation
Certificates or Foreign Inward Remittance Certificate. (Export of Services)
gst@asija.inGST Wing | Asija & Associates LLP

7. PROCEDURE FOR GRANTING REFUND
 After filing of Application of Refund in FORM GST RFD-01, an acknowledgement in
FORM GST RFD-02 shall be granted.
 If the GST officer is satisfied that a refund is payable to an applicant, he shall make
an order sanctioning refund in FORM GST RFD-06.
 Order in Form GST RFD-06 shall be made within 60 days from the date of receipt of
application complete in all respect.
 The GST officer shall issue a payment advice in Form GST RFD-05 for the amount
of Refund Due.
 The refund shall be electronically credited to the bank A/c furnished at the time of
registration and as specified in the application of refund.
 In case refund is not made within 60 days from the date of receipt of application
complete in all respect, then:-
 Interest @ 6% p.a. shall be paid to applicant by department from the date of expire
of 60 days till the date of payment.
 Interest @ 9% p.a. shall be paid to applicant by department from the date of expire
of 60 days till the date of payment, if the same is payable due to order passed by
adjudicating authority , tribunal or court
gst@asija.inGST Wing | Asija & Associates LLP

8. Provisional Granting of Refund
 The GST officer may, refund on a provisional basis,
 90% of the total amount claimed,
 In the case of any claim for refund on account of zero-rated supply of goods or
services or both made by registered persons,
 Excluding the amount of input tax credit provisionally accepted,
 Thereafter GST officer shall make a the final settlement order in Form GST RFD – 06
after due verification of documents furnished by the applicant.
 The provisional refund shall be granted subject to the condition that the
 person claiming refund has, during any period of 5 years immediately preceding the
tax period to which the claim for refund relates, not been prosecuted for any offence
under the Act or under an existing law where the amount of tax evaded exceeds
2,50,000/-
 The provisional refund order shall be made in FORM GST RFD-04,
 The said order shall be made within a period not exceeding 7 days from the date
issuance of Acknowledgment in Form GST RFD-02 issued on Filing of Refund Form.
gst@asija.inGST Wing | Asija & Associates LLP

9. FAQ’S ON REFUND
 Can the Refund be Withheld by the GST Department ?
■ GST officer may withhold payment of refund due , in case
 Where any person, who has claimed refund of any unutilized input tax
credit, has defaulted in furnishing any return. Or
 A person who is required to pay any tax, interest or penalty, which has not
been stayed by any court, Tribunal or Appellate Authority.
 The said refund shall be withheld, until
 the said person has furnished the return or
 Has paid the tax, interest or penalty, as the case may be;
■ Where an order giving rise to a refund is the subject matter of an appeal or
further proceedings is pending and
 The Commissioner is of the opinion that grant of such refund is likely to
adversely affect the revenue in the said case
 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.
gst@asija.inGST Wing | Asija & Associates LLP

10. FAQ’S ON REFUND
 Can the Refund due be adjusted against any outstanding dues ?
■ GST officer shall 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 previous law
■ He shall pass an order in Part-B of FORM GST RFD-07.
 Is there a lower cap below which refund shall not be granted ?
 Yes, No refund shall be granted, if the amount of refund claimed is less than
`1,000/-
gst@asija.inGST Wing | Asija & Associates LLP

11. THANK YOU
FOR ANY QUERIES KINDLY CONTACT OUR GST TEAM :
CA Rahul Mishra
Partner
(rahul.mishra@asija.in)
CA Amber Agrawal
Associate Director
(amber.agrawal@asija.in)
CA Prakhar Gupta
Associate Director
(prakhar.gupta@asija.in)
ASIJA & ASSOCIATES LLP
CHARTERED ACCOUNTANTS
H.O. : 34/5 , GOKHALE MARG, LUCKNOW
PH. NO. : 0522-4004652,2205072
gst@asija.in

12. This presentation has been prepared to provide a gist of the applicable law
pertaining to GST as issued till date. (06/07/2017)
We have not covered these two topics related to Refund in this Presentation:
 Refund on IGST paid on goods exported out of India
 Refund to Specialized Agency of UNO or Multilateral Financial Institution
For detailed insight and for better understanding of the various provision of the
law, the said presentation should be read along with related provision of CGST Act,
IGST Act, SGST Act & related rules.
We shall not be responsible for any decision taken on the basis of the said
presentation, without obtaining our professional guidance or consultation on the
matter for which reliance was made on this presentation.”
DISCLAIMER
gst@asija.inGST Wing | Asija & Associates LLP

13. • Date of communication of such
judgement, decree, order or direction
Refund in case of
judgement, decree or
order of Court
• The end of Financial Year in which
such claim for refund arises
Refund of Unutilized
ITC
• Date of Adjustment of tax after the
final assessment
Refund of tax
Provisionally Paid
RELEVANT DATE
gst@asija.inGST Wing | Asija & Associates LLP

14. • By Sea/Air, the date on which Ship/Aircraft leaves India.
• By Land, the date on which such goods pass the frontier.
• By Post, the date of dispatch of goods by Post Office.
Refund in case of
Export of goods
outside India
• Date on which the Return relating to such deemed
exports is furnished.
Refund of goods
regarded as Deemed
Exports
• Date Receipt of Payment in Convertible Foreign Exchange,
if supply of service completed before receipt of Payment.
• Date of Issue of Invoice, if payment had been received in
advance before the date of Issue of Invoice.
Refund of tax in case
of Export of Services
outside India
RELEVANT DATE
Other Cases:
 In the case goods/services received by a Person who is not a supplier, the date shall be the
Date of Goods/Services received by such person.
 For any other case, the relevant date shall be the date of payment of tax.
gst@asija.inGST Wing | Asija & Associates LLP