HELPING CLIENTS KEEP MORE OF WHAT THEY EARN GOODS AND SERVICES TAX REFUND PROCESS 1
SALIENT FEATURES OF REFUND The refund claim relates to : tax relating to goods and/or services exported out of India; tax on inputs or input services “used” in the goods and/or services exported out of India including zero rated supply; tax on the supply of goods regarded as deemed exports; unutilized input tax credit at the end of tax period in cases of : exports and input tax rate being higher than output tax rate. 1 Section 48 of Central /State Goods & Service Tax Act 2016
PROVISIONS RELATING TO REFUND Any person shall file an application in FORM GST RFD- 01 for refund of any tax and interest paid to the proper officer of IGST/CGST/SGST within two years from the relevant date in the prescribed manner. Following persons are entitled to a refund of IGST/CGST/SGST paid by it/him on inward supplies of goods and/or services – A specialized agency of the United Nations Organization or Any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries or Any other person or class of persons as notified under section 49 Those agencies may make an application for such refund to the proper officer, In specified form and manner within six months from the end of the month in which such supply was received. 2 Section 48 of Central /State Goods & Service Tax Act 2016
PROVISIONS RELATING TO REFUND Refund of the unutilized input tax credit can be claimed at the end of any tax period in the following cases: Refund of Unutilized input tax credit will be available In case of exports of goods If rate of tax on inputs is and/ or services out of India on higher than the rate of tax which export duty is not on outputs. payable; or Zero rated supplies. However, the refund is not eligible in the following cases as well: If the goods exported out of India are subjected to export duty; or If the goods exported out of India are exempted or nil rated; If supplier claims refund of the output tax paid under IGST Act. 3 Section 48 of Central /State Goods & Service Tax Act 2016
PROVISIONS RELATING TO REFUND The refund relating to an application if found in order, will be sanctioned within sixty days from the date of receipt of application containing all the prescribed information. The refund will be directly paid to the claimant in the following cases: Refund of tax on goods and/or services exported out of India; Refund of tax on inputs or input services used in the goods and/or services which are exported out of India; Refund of unutilized input tax credit as indicated earlier; The tax / interest / other amounts paid by the applicant, if he had not passed on the incidence to any other person; or The tax or interest borne by notified (by Central/State Government on the recommendation of the council) class of applicant: Refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued; Refund of tax in case it is wrongly collected or deposited with the government. 4 Section 48 of Central /State Goods & Service Tax Act 2016
PROVISIONS RELATING TO REFUND In case of claim of refund of accumulated input tax credit , the refund due will be either withheld or deducted in cases where – A person defaults in furnishing any return; A person is required to pay any tax, interest or penalty ordered, which is not stayed by Court or appellate Authority within (a) 30 days from the date of filing the appeal under this Act, where an appeal is filed; and (b) In case where appeal is not filed, on the last date of the due date for filing appeal. In case where the refund is an consequence of an order and such order is in appeals, further proceedings, or any other proceeding under this Act the commissioner is of the opinion that granting of refund would affect the revenue adversely the commissioner may withhold the refund till such time as it may determine. The advance tax deposited by a casual taxable person or a non-resident taxable person at the time of taking registration would be refunded only after the completion of entire period for which the certificate of registration is granted and all the returns required are furnished. 5 Section 48 of Central /State Goods & Service Tax Act 2016
MISCELLANEOUS PROVISION Refund of GST paid on export of goods or services then 90% of the total amount so claimed, excluding the amount of input tax credit provisionally accepted to be refunded within 7 days of acknowledgement in FORM GST RFD-04 . Balance 10% to be paid after verification of documents. Provisional refund shall not be issued when: Person who has been prosecuted in last 5 years with tax involvement of 2.5 Crores and above. Compliance rate is not less than 5 on a scale of 10. The refund application has to be supported by prescribed documents evidencing facts that the refund is due to the applicants and the incidence of tax/ interest/ amount paid was not passed on by the claimant to any other person. If the amount of the refund claim is less than Rs. 5 lakhs there is no need of filling such documentary evidence instead a self declaration stating that the benefit of tax/ interest is not passed on to any other person is sufficient. No refund shall be paid to the applicant is the amount of refund is less than rupees thousand 6 Section 48 and Refund Rules of Central /State Goods & Service Tax 2016
RELEVANT DATE Situation Relevant date Refund is in respect of goods exported (or on inputs/ input services used in such goods) i. By sea Date on which the ship or the aircraft in which such goods are loaded, leaves India ii. By Air iii. By land Date on which such goods pass the frontier iv. By post Date of dispatch of goods by the concerned Post Office to a place outside India Refund in respect of deemed exports Date on which the return relating to such deemed exports is filed. Where supply of service completed prior to Date of receipt of payment in convertible Refund is in respect of services exported (or on inputs/ receipt of payment foreign exchange input services used in such services) Where payment for service received in Date of issue of Invoice advance Tax becomes refundable as a consequence of: (i)Judgment (ii)Decree Date of communication of such judgment, decree, order or direction (iii)Order (iv)Direction of Appellate Authority, AppellateTribunal or any Court Refund of unutilized input tax credit End of the financial year in which such claim for refund arises Tax is paid provisionally under this Act or the rules made Date of adjustment of tax after the final assessment thereof. there under In case of a person other than the supplier Date of receipt of goods or services by such person In any other case Date of payment of GST 7 Section 48 of Central /State Goods & Service Tax 2016
PROCESS FOR REFUND Refund application to be filed incase of Export of Goods Untilised input tax /service credit Apply in GST RFD-01 within 2 years Acknowledgement in GST RFD-02 made available to the applicant Deficiencies to be Not rectified notified in GST RFD-03 Notice Rectified served for refund not admissible GST RFD-07 A 8 Refund Rules of Central /State Goods & Service Tax 2016
PROCESS FOR REFUND A No Application rejected in Proper officer GST RFD-05 satisfied Yes Provisional refund -90% Refund allowed in 7 days in GST RFD-04 Yes Adjustment of Any other refund in GST RFD- demand 06 outstanding No Final refund order GST Refund Delayed Interest to be paid in RFD-05 GST RFD-09 Amount payable to applicant 9 Refund Rules of Central /State Goods & Service Tax 2016
INTEREST ACCURED AND CONSUMER WELFARE FUND Interest on Refund Refund application to be processed within 60 days from the date of application For refunds made after 60 days from date of application – interest at the rate as may be recommended by the GST Council Consumer Welfare Fund If the applicant is unable to prove that the incidence was not actually passed onto any other person then the refund amount is credited to the Consumer Welfare fund. It should be ensured that the monies credited to the fund shall be utilized to provide assistance to protect the welfare of the consumers, as per the Rules made by the Government. The Central or the State Government shall maintain proper and separate records in relation to the Fund in consultation with the Comptroller and Auditor-General of India. 10 Section 51 and 52 of Central /State Goods & Service Tax 2016
Recommend
More recommend
