PROCEDURE AND CONDITIONS FOR FILING REFUND CLAIM - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

4. PROCEDURE AND CONDITIONS FOR FILING REFUND CLAIM 4.1 FORM GST RFD-01 shall be filled on the common portal by an applicant for the purpose of refund and uploaded with supporting documents, as provided in Annexure-A of CBIC Circular No. 125/44/2019 - GST dated 18.11.2019 read with Circular No. 197/09/2023-GST dated 17.07.2023. 4.2 In case a Deficiency Memo has been issued, the applicant has to file a fresh refund application as the refund application with deficiencies would not be processed. 4.3 Debit to Electronic Cash Ledger if refund claimed from Electronic Cash Ledger (i) If a person has claimed refund of any amount from the balance in Electronic Cash Ledger then the said amount shall be first debited in the Electronic Cash Ledger. (Rule 87(10) of CGST Rules, 2017) (ii) The debit in Electronic Cash Ledger is required as on sanction, the refund will be credited to the bank account of the applicant. (iii) Refund from balance in Electronic Cash Ledger can be made without limitation of time. (Section 54(1) of CGST Act, 2017) (iv) If the refund so claimed is rejected, either fully or partly, the amount equivalent to the amount rejected shall be credited, to the Electronic Cash Ledger by the Proper Officer by an order made in FORM GST PMT-03 . (Rule 87(11) of CGST Rules, 2017) 4.4 Debit to Electronic Credit Ledger if refund of Input Tax Credit (ITC) claimed under Section 54 of CGST Act, 2017 - (i) If a registered person has claimed refund of any unutilized ITC amount from the Electronic Credit Ledger in accordance with the provisions of Section 54 of CGST Act, 2017 (refund in case of zero rated supply or inverted tax structure), the amount to the extent of the claim shall be debited in the said ledger at the time of filing the refund claim. (Rule 86(3) of CGST Rules, 2017) (ii) In case of refund claim of ITC pertaining to export of goods or services or supplies to SEZ, the amount is required to be debited at the time of filing refund claim, as the amount will be refunded to the person by crediting his bank account. 4.5 Procedure for re-credit of amount erroneously refunded in Electronic Credit Ledger Procedure for re-credit of amount erroneously refunded has been specified in Circular No. 174/06/2022-GST dated 06.07.2022, which is as follows- (i) The taxpayer shall deposit the amount of erroneous refund along with applicable interest and penalty, wherever applicable, through FORM GST DRC-0 3 by debit of amount from Electronic Cash Ledger. While making the payment through FORM GST DRC-03 , the taxpayer should clearly mention the reason for making payment in the text box as deposit of erroneous refund of unutilised ITC , or deposit of erroneous refund of IGST obtained in contravention of Rule 96(10) of the CGST Rules, 2017. (ii) The taxpayer has to make a written request, in format prescribed, to jurisdictional Proper Officer to re-credit the amount equivalent to the amount of refund paid back in cash, to Electronic Credit Ledger. (iii) If the Proper Officer is satisfied that the full amount of erroneous refund along with applicable interest and penalty, has been paid by the taxpayer in FORM GST DRC-03 by way of debit in Electronic Cash Ledger, he shall re-credit the amount in Electronic Credit Ledger, equivalent to the amount of erroneous refund so deposited by the registered person. An order in FORM GST PMT-03A has to be passed, preferably within a period of 30 days from the date of receipt of request for re-credit of erroneous refund amount so deposited or from the date of payment of full amount of erroneous refund along with applicable interest, and penalty, whichever is later. 4.6 A refund claim for a particular tax period can be filed only after furnishing all the returns in FORM GSTR-1 and FORM GSTR-3B, which were due to be furnished on or before the date on which the refund application is being filed. However, in case of a claim for refund filed by a Composition taxpayer, a Non-Resident taxable person, or an Input Service Distributor (ISD), furnishing of returns in FORM GSTR-1 and FORM GSTR-3B is not required. Instead, the applicant should have furnished returns in FORM GSTR-4 (along with FORM GST CMP-08), FORM GSTR-5 or FORM GSTR-6, as the case may be, which were due to be furnished on or before the date on which the refund application is being filed. 4.7 Circular No. 188/20/2022-GST dated 27.12.2022, prescribes the manner of filing refund claim by unregistered persons in the following situations- (i) Unregistered buyers, who had entered into an agreement/contract with a builder for supply of services of construction of flats/building, etc. and had paid the amount towards consideration for such service, either fully or partially, along with applicable tax, had to get the said contract/agreement cancelled subsequently due to non-completion or delay in construction activity in time or any other reasons. (ii) Long-term insurance policies where premium for the entire period of term of policy is paid upfront along with applicable GST and the policy is subsequently required to be terminated prematurely due to some reasons. The application for refund is required to be filed in FORM GST RFD-01 on the common portal under the category Refund for unregistered person . The applicant is required to upload statement 8 (in pdf format) and all the requisite documents as per the provisions of sub-rule (2) of rule 89 of the CGST Rules, 2017. The applicant should also upload the certificate issued by the supplier in terms of clause (kb) of sub-rule (2) of rule 89 of the CGST Rules, 2017, and any other document(s) to support his claim that he has paid and borne the incidence of tax and that the said amount is refundable to him. 4.8 Functionality has been made available on the common portal, which allows unregistered persons to take a temporary registration and apply for refund under the category Refund for Unregistered person . Statement 8 has been inserted in FORM GST RFD-01 to provide for the documents required to be furnished along with the application of refund by the unregistered persons and the statement has to be uploaded along with the refund application. 4.9 In cases where the amount paid back by the supplier to the unregistered person on cancellation/termination of agreement/contract for supply of services is less than the amount paid by such unregistered person to the supplier, only the proportionate amount of tax involved in such amount paid back shall be refunded to the unregistered person. 4.10 The applicant can withdraw the application for refund filed in FORM GST RFD-01 , at any time before issuance of provisional refund sanction order in FORM GST RFD-04 or final refund sanction order in FORM GST RFD-06 or payment order in FORM GST RFD-05 or refund withhold order in FORM GST RFD-07 or notice in FORM GST RFD-08 , by filing an application in FORM GST RFD-01W (Rule 90(5) of CGST Rules, 2017). On submission of application for withdrawal of refund in FORM GST RFD-01W , any amount debited from Electronic Credit Ledger or Electronic Cash Ledger, as the case may be, while filing application for refund, shall be credited back to the ledger from which such debit was made.