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GST Payment and Refund

The Goods and Services Tax (GST) was introduced in 2017 and included all goods and services under its purview, replacing the previous service tax, VAT, excise duty etc. Now, for every purchase, GST is levied based on the categories or slabs defined by the central and state governments.
At the time of calculating GST paid by taxpayers, if it is discovered that the taxpayer has paid an amount excess to the actual tax to be paid, then the taxpayer is eligible to claim a refund before or on the GST return due date.

GST Refund Eligibility

GST is levied on the basis of invoices raised and has been introduced to ensure a smooth way of collecting taxes from the manufacturer and exporters. This system has not only reduced the burden on the taxation system but has also made it easier to get a GST refund.

There are multiple events where one can be eligible to get the GST refund. In such cases, they would need to download the right form and fill the details accordingly if the situation is any one of the following:

• When an extra amount has been paid as GST due to a mistake in the calculation, you can claim a GST refund.
• In case of an export transaction which involves a cumulative balance of input credits, a claim for a GST refund can be made. This is applicable also in case of a rebate claim by the exporter.
• If the provisional assessment indicates that you can claim a refund, you can claim a GST refund.
• If you have paid an amount as GST for articles that are exempted from tax, or a lower tax rate is levied, that results in input credit accumulation in GST leaders. This amount you can claim for GST refunds.
• On adjudication, if the officer points out an input credit in the GST claim, you are eligible for GST refund.
• If you have made a submission of a deposit against an appealing mail made by the respondent, you will get that refund after the appeal is dismissed or resolved.
• When a product is procured from the United Nation’s partners or a foreign embassy, they can claim a GST refund.

GST Refund Forms List

To file for a GST refund, forms are prescribed for every situation, which are listed here:

Form RFD-01 (Application Form)

For the purpose of filing the Form RFD-01, it has to be authorized by a chartered accountant, within two years from the relevant date of GST. The relevant date differs in different cases, so it cannot have a fixed definition. Therefore, one must be careful about noting down the relevant date for filing for the GST refund. In case one fails to file within the timeframe, it might lead to blocking credit.

Form RFD-02 (Acknowledgement Form)

After the assessee has filed an application for a GST refund, Form RFD-02 will be auto-generated. This bears the details and acknowledgement of the application filed. The assessee can receive Form RFD-02 via email or SMS.

Form RFD-03 (Deficiency Memo Form)

In case there is a mistake in Form RFD-01 at the time of filing the application for a GST refund, the applicant shall receive Form RFD-03 to make the corrections. This form should be sent back making after all the required corrections.

Form RFD-04 (Provisional Order)

In case of a zero-rated supply, the applicant can file for a GST refund in Form RFD-04. If the assessing officer is satisfied with the application he may, within seven days, sanction on a provisional basis 90% of the total refund amount.

Form RFD-05 (Payment Order)

On the amount being sanctioned, it will be notified on Form RFD-05. Be assured that the amount will be credited to your bank account.

Form RFD-06 (Refund Order)

If the assessing officer is under the impression that there is no more requirement for any enquiry, the refund order shall be issued through Form RFD-06.

Form RFD-07 (Adjustment Form)

If there is any outstanding demand which is to be adjusted with the GST refund, then Form RFD-07 is to be filed.

Form RFD-08 (Rejection Notice Form)

Where the assessing officer rejects a refund application or a part of the GST refund claim, then a notice is issued using Form RFD-08, asking the applicant to justify their claim.

Form RFD-09 (Justification Form)

Where the notice is received by the applicant through Form RFD-08, the answer justifying the claim is to be filed using the Form RFD-09

Form RFD-10

Where the applicant is a United Nation’s body, Consulate, or foreign embassy, They have to file a Form RFD-10 requesting a GST refund within 90 days from the end of the quarter.

Documents For GST refund Application

When filing the GST refund form, certain documents are required to be attached based on the amount of the GST refund claim.

If the GST refund claim is less than Rs. 5 lakhs, a declaration should be made by the assessee that the refund amount has not been transferred to someone else nor been used for any purpose.

In case the amount is more than Rs. 5 lakhs, along with the above-mentioned declaration, the applicant has to provide a document proving that the amount being claimed has actually been paid by the applicant.

Time Taken For Process

The processing of the refund application takes around 30 days from the date of filing.

The Subramanian Committee suggested that the application for GST refund must be processed within 90 days from the date of filing. In case the delay is on the authority’s side, 6% interest should be paid along with the GST refund amount.

The Finance Minister Nirmala Sitaraman declared that the refund procedure shall be done within 7 days and, in case there is a delay by 14 days from the day of filing, then the interest shall be paid too.