GST Refund Procedure Online – Step by Step Procedure

If you are thinking that GST refund procedure is very complicated then you are thinking wrong.

The GST refund procedure is very simple and fast. We are giving here the step by step procedure to apply GST refund.

The GST refund process has been made with the objective of processing refund in minimum time and with least number of required documents.

This will not only improve the refunds process, but will also enhance the overall efficiency of the backend IT systems backing the GST. It will also help in increasing the average number of refunds processed under GST.

There are various situations in which individuals or entities can claim refunds. These are:

  • Excess tax payment due to inadvertence or mistake
  • Export of services/goods under rebate or refund claim of the accumulated tax credit when these services/goods are exported
  • Provisional Assessment finalization
  • Pre-deposit refund for filing of appeal. This includes refund from pursuing an authority’s order
  • Tax/duty payment done during an investigation, but less or no liability arises during finalization of the investigation/adjudication
  • Tax refunds on purchase made by UN establishments, CSD Canteen supplies, PFCs (Paramilitary Force Canteens) etc.
  • Tax credit refund on inputs for generation, manufacturing or production
  • Tax credit accumulated when output tax is exempted
  • Refund of taxes for the International Tourists
  • Carry forward refund of Input tax-credit

Detailed Refund Procedure under GST

The form for refund process is available online, which needs to be duly filled and submitted. The time limit for filing the refund application is one year from relevant date. It should be filled with supporting documents such as return copy with evidences of payment, invoice copy, CA certificated for any unjust enrichment as well as any other prescribed document.

  1. The application for filing refund can be done via GSTN portal.
  2. Once the application is filed electronically, an acknowledgement number will be received as a confirmation receipt. This will be either received via email or SMS and should be kept by the applicant for further references.
  3. This will automatically reduce the ‘carry-forward input tax credit’ across the return & cash ledger
  4. The application form and documents submitted will be scrutinized within 30 working days of the application filing process. If the applicant does not receive any confirmation after 30 days, he/she can communicate the same to the tax portal
  5. Each refund application form will be examined against ‘unjust enrichment’. If the application for refund does not qualify this principle test, the amount claimed for refund will be credited to CWF (Consumer Welfare Fund).
  6. An amount lower than INR 1000 will not be accepted for tax refund.
  7. Sanctioning of the refund will only be made to the applicant via ECS, RTGS or NEFT, electronically
  8. Verification and control process will be applied for refund amounts that have exceeded the pre-determined amount. The application will go through a pre-audit process for sanctioning the refund.
  9. The refund has to be paid within ninety days from application submission.
  10. The ROI (rate of interest) charged will be around 6 percent. In payment default cases, the ROI will be around 18 percent.
  11. With respect to unpaid tax demands, GST law may provision adjustment of the refund claims.

Document Required to Claim Refund under GST

Although the procedure to apply of refund under GST is online but there are some documents which are mandatory to attach along with refund form GST RFD-1 as follow:

In the case of export of goods and services

  • Statement showing the number and date of shipping bills
  • Statement showing the number and date of bill of exports
  • Statement showing the number and date of invoices and the relevant bank Realisation Certificates or Foreign Inward Remittance Certificates

In the case of spply to/from Special Economic Zone (SEZ)

  • Statement showing the number and date of invoices.
  • Declaration to the effect that the SEZ units or the SEZ developer has not availed of the input tax credit.

In the case of deemed exports

  • Statement showing the number and date of invoices.

In the case of where output tax is lower than input tax result into more ITC

  • Statement in Annex 1 of Form RFD–01 showing the number and date of invoices received and issued during a tax period.

In the case of where refund is less than Rs. 5 Lakh

  • If the refund is less than Rs. 2 lakh then only self declaration shall be required.

Important Points to Remember for GST Refund Procedure

  • You can apply refund only of last 2 years.
  • There is only one way to apply refund and that is only by online mode. There is no other way to apply GST refund.
  • You will get refund within 60 days from the date of receipt of complete application. If the refund will not be granted within 60 days by the official then you have right to claim interest on refund amount form government.
  • The interest of delaying refund by the government is @6%
  • You can get 80% of the claimed refund immediately without verification of any documents in the case of exports.

GST Provisions Related to GST Refund Procedure

Interest on Delayed GST Refunds Section 56 of CGST Act
Interest on Refund of Amount Paid for Admission of Appeal Section 115 of CGST Act
Refund of GST Section 54 of CGST Act
GST Refund Procedure Rules Download Here
GST Refund Procedure Forms Download Here

We have covered here all important provisions related to GST refund procedure in a very simple manner so that every layman can understand.

If you found any difficulty to apply for GST refund and having any queries related to GST refund procedure then you can ask us via comment form given below.

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