Refund of Tax [ Section 54(1) read with rule 89 of CGST Rules ] - GST Ready Reckoner - GST

Refund u/s Section 54 Refund has been discussed in section 54 of the CGST/SGST Act. Refund includes (a) any balance amount in the electronic cash ledger so claimed in the returns, (b) any unutilized input tax credit in respect of (i) zero rated supplies made without payment of tax or, (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), (c) tax paid by specialized agency of United Nations or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries on any inward supply Time Limit for claiming refund As per section 54(1) of CGST Act Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. Exception:- Circular No. 166 / 22 / 2021 -GST DATED 17-11-2021 clarifies time limit provision for filing of application doesn t apply to refund of excess balance in electronic cash ledger. A registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of section 49(6) , may claim such refund in such form and manner as may be prescribed. Relevant date in case of export supply in respect of export supply S.No. Case Relevant date 1. In case Goods export out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the input or input services used in such goods and Goods are exported by sea or air Date on which ship or the aircraft in which such goods are loaded, leave 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 the post office concerned to a place outside India 2. In 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 services used in such services and The supply of services has been completed prior to the receipt of such payment Date of receipt of payment a) in convertible foreign exchange; or b) in Indian rupees wherever permitted by RBI of India Payment for the services has been received in advance prior to the date of issue of the invoice Date of issue of invoice Procedure For Refund Rule 89(1) provides for Application for refund of tax, interest, penalty, fees or any other amount Any person, claiming refund of any tax, interest, penalty, fees or any other amount paid by him, other than refund of integrated tax paid on goods exported out of India, may file an application electronically in FORM GST RFD-01 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner In case of Special Economic Zone, the application for refund shall be filed by (a) supplier of goods after such goods have been admitted in full in the Special Economic Zone for authorised operations, as endorsed by the specified officer of the Zone; (b) supplier of services along with such evidence regarding receipt of services for authorised operations as endorsed by the specified officer of the Zone In case of deemed export the application may be filed by, - (a) the recipient of deemed export supplies; or (b) the supplier of deemed export supplies in cases where the recipient does not avail of input tax credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund. Refund of any amount, after adjusting the tax payable by the applicant out of the advance tax deposited by him under section 27 at the time of registration, shall be claimed only after the last return required to be furnished by him has been so furnished. Such an application must be filed within two years from the date of payment of the tax on the inter-State supply The application shall be accompanied by (a) such documentary evidence [ rule 89(2) ] as may be prescribed (in Annexure 1 in Form GST RFD-01) to establish that a refund is due to the applicant; and (b) such documentary or other evidence as the applicant may furnish to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund is claimed was collected from , or paid by, him and the incidence of such tax and interest had not been passed on to any other person. where the amount claimed as refund is less than two lakh rupees , it shall not be necessary for the applicant to furnish any documentary and other evidences but he may file a declaration , based on the documentary or other evidences available with him, certifying that the incidence of such tax and interest had not been passed on to any other person. Rule 90 Acknowledgement An acknowledgement in FORM GST RFD-02 shall be made available to the applicant through the common portal electronically, clearly indicating the date of filing of the claim for refund Where any deficiencies are noticed , the proper officer shall communicate the deficiencies to the applicant in FORM GST RFD-03 through the common portal electronically, requiring him to file a fresh refund application after rectification of such deficiencies. The applicant may, at any time withdraw the said application for refund by filing an application in FORM GST RFD-01W. Rule 91 Grant Of provisional Refund The proper officer, after scrutiny of the claim and the evidence submitted in support thereof and on being prima facie satisfied that the amount claimed as refund is due to the applicant , shall make an order in FORM GST RFD-04 , sanctioning the amount of refund due to the said applicant on a provisional basis within a period not exceeding seven days from the date of the acknowledgement. Rule 92 Order sanctioning refund Where, upon examination of the application, the proper officer is satisfied that a refund is payable to the applicant he shall make an order in FORM RFD-06 sanctioning the amount of refund to be paid, in cash, proportionate to the amount debited in cash against the total amount paid for discharging tax liability for the relevant period; Where the proper officer or the Commissioner is of the opinion that the amount of refund is liable to be withheld , he shall pass an order in FORM GST RFD-07 informing him the reasons for withholding of such refund.