How to Claim GST? GST Refund Process

Any taxpayer who makes an extra GST payment in the form of penalty, fees, interest, tax or any other form has the right to claim a GST refund. In order to claim GST refund, the taxpayer has to file the FORM GST RFD-01. In order to file this form, the taxpayer has to login to the GST common portal or a registered organisation or a GST facilitation centre. In this blog, we will learn about the process to claim a GST refund.

When can you claim a GST refund?

According to Section 54 of the GST Act, a GST refund application can be filed by a taxpayer under the following situations:

1. When tax is paid on zero rated supplies of services and goods.
2. When there is an export of goods and services.
3. When supplies are made to special economic zone units or special economic zone developers.
4. A refund of tax when the supply of goods is counted as exports.
5. When there is a refund of taxes on the purchases that are made by the UN or embassies.
6. When refund is provided on the basis of judgement, order or decree of the Appellate Authority/ Tribunal/ court.
7. When there is a finalisation of provisional assessment.
8. When there is a refund of the pre-deposit.
9. When there is excess payment.
10. When refunds are made to international tourists for GST, they pay on the goods in India and carry with them.
11. Refund on the basis of issuing of refund vouchers for taxes that are paid in advance for the goods and services that have not been supplied.
12. Refund of CGST and SGST that is paid by considering the supply as intrastate which is later held as interstate or vice-versa.

Process for GST refund

The process to claim GST refund has been standardised by the GST laws across India. It is must for a taxpayer to file GST refund applications online on the GST Common Portal in a standardised form. The individual should also file returns monthly in order to claim the GST refund amount in the credit balance. Once the individual has filed a refund application, he/she will receive an acknowledgement for the application within 14 days of its acceptance.

When the refund request is received, the concerned officer will have to transfer the status of application under 14 days. In case there are some deficiencies or errors in the application, then the request for GST refund will be sent back to the taxpayer along with the list of errors. The applicant can refile the refund application afterwards. In case there are no deficiencies, then the GST refund claims will be sanctioned within 60 days from the date of  the claim receipt.

Payable Interest

In case the applicant exceeds the time limits mentioned above, then the taxpayer will be liable to pay an interest in addition to the amount of refund from the end of the 60 days limit until the payment is made. The recommended interest rates are 6% and 9% as per the GST council meetings. If under some situations, the application has made a pre-deposit for the GST refund claim, then the interest will be payable from the date on which such a payment was made to the appellate authority.

The process to file a GST Refund Claim

The GST refund can be claimed by any taxpayer by filing an application online in FORM GST RFD-01 via the GST Common Portal or via a GST Facilitation Centre. The refund can be made of any sort of taxes, interests, fees, penalties of any other amount that has been paid by the taxpayer. But in case the refund is related to balance in the electronic cash ledger, then the applicant can claim the GST refund by providing the returns for the relative tax periods in FORMs GSTR-3, GSTR-4 or GSTR-7.

Required Documents

The following documents are required to file an application for GST Refund Claim:

• Relevant invoice statement

In order to claim a GST refund, the taxpayer needs to maintain and file adequate documentation. In addition to all the GST refund requests the taxpayer must possess relevant invoices which are related to the claim should also be filed. According to the GST rules, the applicants should maintain the invoices filed by them  for a period of 7 years at a minimum.

• In order to export services

In order to get a GST refund for export of services, the applicant needs to provide relevant realisation certificates from banks which prove the receipt of payment abroad.

• For the supplies that are made to the SEZ units

In case a supplier wishes to make a claim for GST refund to an SEZ, then the concerned taxpayer needs to provide an endorsement from the Proper Officer which proves that the receipt of those goods and services is related to SEZ. The taxpayer also needs a declaration from the SEZ unit which states that the input tax credit that has been paid by the supplier has not been claimed.

• Refund on the basis of Judgement

When a claim of GST return is done on the basis of  any sort of judgement or order from any appellate authority or court, then the reference number of  the order that gave rise to the refund needs to be submitted in addition to the GST refund request.

• To Claim refund due to Unjust Enrichment

In order to claim a GST refund request for less than Rs. 2 Lakhs for unjust enrichment, the applicant needs to submit a self-declaration which states that the incidence of tax remains unpassed/ passed to some other individual.

• The Chartered Accountant Certificate

In order to claim GST refunds of more than Rs. 2 Lakhs, the taxpayer has to acquire a certificate from the CA (Chartered Accountant) or a Cost Accountant. But these certificates are not required if the claim of GST refund is filed on the basis of zer0-rated supplies or claims of accumulated input tax credit or wrong tax payments or when a refund voucher has been issued.

Conclusion

In this blog, we got to know about the GST refunds and how to claim GST refunds. The process for claiming a GST refund and the documents that may be required by a taxpayer in order to file a claim for GST refund.