Refund of GST

Situations when the GST REFUND CAN BE MADE:
1. Wrong GST Head- (Refund of wrongly paid GST) If you pay the tax under the wrong
GST heads- CGST, SGST, IGST you can claim a refund of the tax & repay them
under the correct GST head, by filing the relevant GST Returns.
2. Erroneous calculation of tax amount- Accountants may calculate incorrect tax
amounts while filing Form GSTR-3B which may lead to excess tax payment.
3. Incorrect GSTIN- Business Owners having multiple Businesses under one PAN, can
erroneously enter incorrect GSTIN while GST filing & paying taxes. This can result
in the payment of the wrong GST refund amount.
4. Advance tax payment- In the case where a taxpayer pays GST on an advance that he
received for a transaction that subsequently got canceled, the supplier can claim a
refund for it under 'Excess Tax Paid'
5. Refund for Casual Tax Payers- Casual taxpayers are dealers who do not have a
specific place of supply & who supply taxable goods & services occasionally only.
CTPs make temporary registrations & are obliged to pay advance tax at the time of
registration. After the payment of all the GST of the registration period, if there is any
excess tax left then the CTP can claim it under 'Excess Tax Paid'.
6. You can claim a refund of an unutilized ITC at the end of a tax period only for zero-
rated supplies made without paying GST or when ITC accumulates due to higher tax
rates on input supplies as compared to output supplies (other than Nil-rated or exempt
supplies). Further, a refund is not allowed for exported goods subject to export duty or
if the supplier avails of a drawback or claims a refund of the IGST paid on such
supplies.
Refund of Late fees, interests & penalties- You can also claim a refund of erroneously paid
Late fees, interests & penalties under the 'Excess Tax Paid' header.
SECTION 54 OF CGST,2017
1. HOW TO APPLY?
- A person can apply for a refund of taxes, interest, or any other amount paid, within
two years from the relevant date in the prescribed form (GST RFD-01) and
manner. Rule 89 of the CGST Rules, provides that the person applying for the
refund of excess payment of tax is required to furnish a statement providing the
details of the payment of tax paid. Registered persons claiming a refund of any
balance in the electronic cash ledger can claim such refund in the prescribed form
and manner under Section 49(6).
- PRODUCTION OF EVIDENCE: To claim a tax refund, an applicant must
provide prescribed documentary evidence to prove that they are eligible for the
refund. They must also provide evidence that the incidence of tax or interest paid
by them in relation to such refund has been not passed on to another person if the
refund amount is less than Rs.2 lakh, a declaration certifying that the incidence of
tax and interest paid was not passed on is sufficient based on other available
evidence. In case, the amount is more than Rs. 2 lakh then, as per Rule 89 of the
Rules, shall submit a certificate in Annexure 2 issued by a Chartered Accountant
regarding incidence of tax claimed as refund has not been passed on to any other
person.
- VERIFICATION BY PO: Upon receiving the refund application, if the proper
officer verifies and approves that a refund is due, they will make an order for the
refund and credit the amount to the Fund mentioned in section 57, i.e. the
Consumer Welfare Fund.
- REFUND: The officer must issue the refund order within 60 days of receiving a
complete refund application. GST refunds are processed normally within a period
of 30 days from filing a GST refund forms. This period may alter in some cases
depending on the amount of GST refunds to be processed. The GST claim
application shall undergo a scrutiny or audit as maybe applicable and the said
amount shall be processed to taxpayer’s account when found eligible. In case the
adjudicating body finds that taxpayer comes under the category of being “unjustly
enriching” then the GST refunds amount shall be transferred to Consumer Welfare
Fund.
- When the GST refunds arise out of an export of goods or services then authorized
officer can issue a provisional refund order through GST Form RFD-04 of ninety
percent of the GST refunds claim.
-
Tagros Chemicals India (P.) Ltd. v. Union of India - [2023] 152 taxmann.com 570 (Gujarat)
HELD: The Gujarat High Court has directed the refund of the Integrated Goods and Service
Tax (IGST) amount, along with applicable interest, to a petitioner. if the assessee paid duties
by mistake on the goods which were exempted from payment would not mean that the goods
would become liable for the duty. Therefore, it was held that the authority should refund
amount along with interest.
Section 54 of the CGST Act provides provisions for claiming refunds of excess GST paid by
a registered person. It sets out various conditions and time limits for claiming such refunds,
along with the relevant dates for determining the eligibility for refunds.Taxpayers can claim
refunds of taxes paid on inputs, input services, and capital goods that are used for business
purposes, as well as for exports and zero-rated supplies.

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Refund of GST

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Situations when the GST REFUND CAN BE MADE:

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