What is GST Refund Process?

  • Blog|GST & Customs|
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  • By Taxmann
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  • Last Updated on 3 February, 2021

Filing for GST Refunds:

Once you have identified that you have a GST claim for refund then you need to file your claim through GST Refund Form RFD-01. This form preferably should be prepared by a certified Chartered Accountant and this GST claim need to be made within 2 years of “relevant date” of the GST refunds application. The different “relevant date” is defined for different GST Refund scenarios, which one can check on online tax site or with the Chartered accountant who is preparing your GST refund.
 
In case you fail to file your GST claim within mentioned timelines then you may never get your GST refunds and your credits may be blocked forever. When the assesse submits his GST Refund form he gets an acknowledgement form GST RFD-02 which is auto-generated. This GST Refund form RFD-02 helps the assesse for any future reference for his GST claim and is sent to taxpayer’s email or phone number as an SMS. 
Once the GST claim by assesse is found to have any deficiencies then a Form RFD-03 is generated and sent to the taxpayer asking him to correct his application.
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While filing GST refunds, the taxpayer must submit a declaration that the GST refund amount will not be utilized or transferred to any third person or entity. In case the GST refunds is of more than five lakhs then the taxpayers filing for the GST refunds must provide additional document as an evidence that the said amount is paid by the taxpayer.
The duration of filing for GST refunds by United Nation, consulate or foreign embassy is only 90 days from the quarter end when they have procured the goods or services. Also, they must make their GST claim through a different GST Form – RFD-10.

Processing of GST Refunds:

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 processes. 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. This kind of provision can only be made if the taxpayer has never been found guilty of evading taxes for amounts more than two hundred and fifty lakh rupees over a period of past five years and his GST compliance rating is five or more out of the score of ten and he do not have any appeal pending in respect to his GST refunds.
 
The new GST Refund process is thorough and effective. It follows the trail of invoices to process the GST claim and is designed by keeping in mind the ease for manufacturers and exporters. Previously which tax refunds use to take years to pass is now being processed within not more than sixty days.

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