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GST Refund: Detailed Provisions & Step-wise Procedures

Introduction to GST Refunds:

The word refund, in simple terms, means an amount of money that is given back to a person upon happening or occurring of some event. In taxation parlance, refund refers to any amount that is due to the taxpayer from the tax administration due to excess payment of taxes or any other reason.

1. REFUNDS under GST are nowadays an open issue which is a problem for almost all class of taxpayers, majorly exporters which is directly impacting their working capital.

2. There are several types of GST refunds namely refunds on account of: 

  • Excess payment of tax due to mistake or inadvertence

  • Excess balance in Electronic Cash Ledger

  • Export with payment of IGST or under Bond/LUT

  • Supplies made to SEZ unit/developer on payment of IGST or under Bond/LUT

  • Inverted duty structure

  • Deemed Exports

  • Persons holding UIN

  • Miscellaneous refunds

3. Technical mistakes made by the taxpayers in filing of returns, lack of clarity on procedure to file the refund form, online filing or manual filing, which proper officer to be interacted with, validations placed on the GST common portal, etc. are some of the prime reasons. Further, the problem seems to be compounded when the numerous clarifications, notifications, press release, forms, documents, etc. has been issued. 

GST Refunds 2019

Scope of Refund in GST Law:

Explanation to section 54 defines the term “refund” which includes:

i) Refund of tax (output tax) paid on zero-rated supplies of goods and/or services, or

ii) Refund of tax (input tax) on inputs or input services used in making zero-rated supplies, or

iii) Refund of tax on the supply of goods regarded as deemed exports, or

iv) Refund of unutilized input tax credit as provided under section 54(3) i.e. due to inverted duty structure.

The aforesaid explanation prescribes the situations in which the refund can be granted as the term used in the aforesaid explanation is that refund ‘includes’. It clearly means that there can be various other situations wherein refund can be granted to the person and/or the registered persons as per the provisions of refund. However, before dealing with all the aforesaid specific situations in which refund can be granted, let us obtain an understanding about the general or basic provisions of refund in GST.

Action by the Government – SPECIAL REFUND FORTNIGHT for 15 days till 14th June, 2018:

• Looking at the difficulty, in order to liquidate the pendency of about INR 14,000 crores, Government is starting a Special drive Refund Fortnight from 31st May, 2018 to 14th June, 2018

• All types of Refund claims pending shall be voluntarily addressed in which Customs, Central and State GST officers will strive to clear all GST refund applications received on or before 30thApril, 2018

• It is clearly a MEGA OPPORTUNITY for the taxpayers of India to get their refunds released which are pending since July, 2017

Solution by Taxmann – A comprehensive book on GST Refunds:

In support of the Special drive Refund Fortnight for 15 days till 14th June, 2018, TAXMANN has come up with the SPECIAL EDITION on GST REFUNDS book which envisages to serve as a ready reckoner on GST Refunds for all the taxpayers, tax-practitioners, CAs, CWAs, CSs, Lawyers, GST Practitioners, etc. and aims to help the nation get benefited from this book by helping them getting their refunds during Special Refund Fortnight.

Disclaimer: This information is updated till 04 June 2018.

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