2. PRESENTATION PLAN
Legal Provisions
Refund of Tax
Refund Scenarios under GST
Refund Procedures
Time limit of Refund
Withholding of Refund
Provision of Interest on Delayed Refunds
Consumer Welfare Fund
3. Situations in which the refunds would arise:
A. Excess Payment of Tax due to mistake or inadvertence
B. Export (including deemed export) of goods/services under claim of rebate or refund of
accumulated credit of tax when goods/services are exported.
C. Finalization of Provisional Assessment
D. Refund of Pre-deposit for filing appeal including refund arising in pursuance of an
appellate authority's order
E. Payment of Duty/Tax during investigation, but no/less liability arises at the time of
finalization of investigation/ adjudication
4. Situations in which the refunds would arise:
F. Refund for Tax payment on Purchase by UN bodies, Supplies to CSD Canteens, Para-
military forces canteens, etc.
G. Refund of tax credit on inputs used for Manufacturing / Generation/ Production/ Creation
of Tax- free supplies or Non-GST Supplies i.e. credit accumulation due to output being tax
exempted or nil rated.
H. Refund of Carry Forward Input Tax Credit
I. Refund on account of year-end or volume based incentives provided by the supplier
through credit notes
J. Tax Refund for International Tourists.
5. Legal Provisions
CGST Act, 2017 Chapter – XI deals with Refund of Tax
Section 54 Refund of tax, interest on tax and other amount paid
Section 55 Refund in certain cases
Section 56 Interest payable on delayed Refunds
Section 57 Consumer welfare Fund
Section 58 Utilisation of Fund
Section 77 Tax wrongfully collected and paid to Central/State Govt.(Sec.19 of IGST Act)
6. Legal Provisions
IGST Act, 2017 Chapter – VI deals with Refund of Tax
Section 15 Refund of Integrated tax paid on supply of goods to tourist leaving
India
Section 16 Zero rated supply
Section 19 Tax wrongfully collected and paid to Central Govt. or State Govt. (Sec. 77 of
CGST Act)
7. What is Refund?
Refund refers to any amount that is due to the tax payer from the tax administration. The
refund may be on account of CGST, SGST/UTGST, CESS or IGST as the case may.
.
Refund of Tax includes the Tax paid, interest on such Tax paid and any other amount paid
by the claimant.
Refund includes Refund of
Tax paid on Zero-rated supplies of Goods & Services or both or on inputs or input services
used in making such Zero-rated supplies – Sec.54(1) of CGST Act
Tax on the supply of Goods & Services regarded as Deemed Exports - Sec.54(1) of CGST
Act.
Unutilised Input Tax Credit - Sec.54(3) of CGST Act
8. Situations where refund would arise
Excess payment due to mistake and inadvertence - Sec.54 (1) of CGST Act, 2017 r/w Sec.49(6)
and 39 of CGST Act
ITC accumulation due to Export (including deemed export) - Sec.16(2) of IGST Act,
2017 r/w Sec.54 (3) of CGST Act, 2017
Finalization of Provisional Assessment, Sec.60 (5) of CGST Act, 2017
Refund to be considered only in terms of Sec. 54(8) of CGST Act, 2017irrespective of anything
contrary contained in any order/decree/judgement etc issued by Court/Appellate Forums ,
Sec.54 (9) of CGST Act, 2017
Refund for Tax payment on transactions by UN bodies – Sec.54 (2) of CGST Act, 2017
CSD Canteens, Para-military forces canteens, etc. - Sec.54 (2) of CGST Act, 2017
Tax refunds for International Tourists Sec.15 of IGST Act, 2017
9. Refund Procedure – Time limit
Time limit: For claiming refund of any tax and interest may make an application before the
expiry of 2 years from the relevant date - Sec.54 (1) of CGST Act, 2017
Time limit for claiming refund by UN /MFI is 6 months from the last day of the quarter in
which supply was received - Sec.54 (2) of CGST Act, 2017
Relevant date
(a) Goods exported out of India:
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft leaves India; or
(ii) if the goods are exported by land, the date on which such goods pass the frontier; or
(iii) if the goods are exported by post, the date of despatch of goods by the Post Office
concerned to a place outside India;
(b) Deemed exports: the date on which the return relating to such deemed exports is furnished;
10. Refund Procedure – Time limit
(c) Services exported out of India, the date of––
(i) receipt of payment in convertible foreign exchange, where the supply of services had been completed
prior to the receipt of such payment; or
(ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue
of the invoice;
(d) Tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate
Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or
direction;
(e) Refund of unutilised input tax credit under sub-section (3), the end of the financial year in which such
claim for refund arises;
(f) Tax is paid provisionally under this Act or the rules made there under, the date of adjustment of tax
after the final assessment thereof;
(g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such
person; and
(h) in any other case, the date of payment of tax.
11. Refund Procedure – Time limit
Time limit for sanction of Refund is 60 days from the date of receipt of the application -
Sec.54 (7) of CGST Act, 2017
Any claim for refund on account of zero-rated supply, Provisional Refund (90%) excluding
the amount of ITC accepted provisionally shall be granted within 7 days from the date of
acknowledgement.
Condition:
The person claiming refund has, during any period of five years immediately preceding the
tax period to which the claim for refund relates, not been prosecuted for any offence under
the Act or under an existing law where the amount of tax evaded exceeds Rs.250 lakh rupees.
- Sec.54 (6) of CGST Act, 2017 r.w Rule 91 (1) of CGST Rules, 2017
If the Proper Officer is satisfied after examination of the claim, he shall make final order for
sanction of refund - Rule 92 (1) of CGST Rules, 2017
12. Refund – Basic Features
Interest:
If refund not sanctioned within the time limit, interest is payable @ 6%, and proviso to Section 56 @
9%(consequential relief to an Order) - Sec.56 of CGST Act, 2017 & Notification No.14/2017-CT dated 28-
06-2017
Adjustment against demand:
The refund sanctioning Officer empowered to adjust the amount sanctioned against outstanding
demand under GST Act or any earlier law, if any - Rule 91 (1) of CGST Rules, 2017
Withholding of Refund:
The Proper Officer may withhold payment of refund for not furnishing returns / not paying tax ,
interest or penalty which is required to be paid, if not stayed. (Refund may be withheld till furnishing
return / payment ) - Section 54 (10) of CGST Act, 2017
The Commissioner may withhold, if he is of the opinion that where an order giving rise to a refund is
the subject matter of an appeal or further proceedings or where any other proceedings under this Act is
pending and grant of such refund is likely to adversely affect the revenue in the said appeal or other
proceedings on account of malfeasance or fraud committed. (He may withhold till such time as he
determines) - Section 54 (11) of CGST Act, 2017
13. Refund – Basic Features
Unjust enrichment: Refund sanctioned shall be credited to the “Consumer Welfare Fund”, if
the claimant fails to prove that incidence of tax not passed on to other persons -
Sec.54 (5) of CGST Act, 2017
Unjust enrichment not applicable in respect of refund on account of Export / Excess balance
in Electronic Cash Leger
No refund - if supply is exempted or nil rated – First proviso to Sec.54 (3) of CGST Act, 2017
No refund of unutilised ITC, if export goods is subject to Export duty – Second proviso to
Sec.54 (3) of CGST Act, 2017
14. Refund – Basic Features
No refund of ITC shall be allowed, if the supplier avails of drawback of central tax or claims
refund of IGST paid on such supplies – Third proviso to Sec.54 (3) of CGST Act, 2017
No refund , if the amount is less than one thousand rupees., Sec.54 (14) of CGST Act, 2017
Authority for sanction: Deputy/ Asst. Commissioner- Circular No.3/3/2017 dated 5-7-2017
Both Centre and State Tax Officers are empowered to grant refunds under Sec.54 and 55 of
CGST Act, 2017 – Notification No.39/2017-CT and Notification No.11/2017-IT both dated
13-10-2017
Issue of Deficiency Memo: Any deficiencies are noticed, the proper officer shall communicate
the deficiencies to the applicant in FORM GST RFD-03 (through the common portal
Electronically ), requiring him to file a fresh refund application after rectification of such
deficiencies – Rule 90(3) of CGST Rules, 2017
15. Refund – Basic Features
Documents to be filed with Refund claim:
A statement containing the number and date of shipping bills or bills of export and the
number and the date of the relevant export invoices, in a case where the refund is on account of
export of goods- Rule 89 (2) (b) of CGST Rules, 2017
A statement containing the number and date of invoices and the relevant Bank Realisation
Certificates or Foreign Inward Remittance Certificates, as the case may be, in a case where the
refund is on account of the export of services - Rule 89 (2) (c) of CGST Rules, 2017
A statement containing the number and date of invoices along with the evidence regarding the
endorsement by the specified Officer of the Zone as the goods are for authorised
operations in the case of the supply of goods made to a Special Economic Zone unit or a Special
Economic Zone developer - Rule 89 (2) (d & e) of CGST Rules, 2017
16. Refund – Basic Features
Documents to be filed with Refund claim:
A declaration that the SEZ unit or the SEZ developer has not availed the input tax credit of the
tax paid by the supplier of goods or services or both, in a case where the refund is on account of
supply of goods or services made to a SEZ unit or a SEZ developer - Rule 89 (2) (f) of CGST Rules,
2017
Reference number of the order and a copy of the order passed by the proper officer or an
appellate authority or Appellate Tribunal or court resulting in such refund or reference number
of the payment of the amount specified in subsection (6) of section 107 and sub-section (8) of
section 112 claimed as refund - Rule 89 (2) (a) of CGST Rules, 2017
A Certificate in Annexure 2 of FORM GST RFD-01 issued by a chartered accountant or a cost
accountant to the effect that the incidence of tax, interest or any other amount claimed as
refund has not been passed on to any other person, in a case where the amount of refund
claimed exceeds two lakh rupees - Rule 89 (2) (l) of CGST Rules, 2017
17. Refund – Basic Features
Documents to be filed with Refund claim:
Reference number of the final assessment order and a copy of the said order in a case where
the refund arises on account of the finalisation of provisional assessment - Rule 89 (2) (i) of CGST
Rules, 2017
Self declaration is sufficient that incidence of tax not passed on to other persons if refund
claimed is less than Rs.2 lakh - Sec.54 (4) of CGST Act, 2017
A Certificate in Annexure 2 of FORM GST RFD-01 issued by a chartered accountant or a cost
accountant to the effect that the incidence of tax, interest or any other amount claimed as
refund has not been passed on to any other person, in a case where the amount of refund
claimed exceeds Rs.2 lakh - Rule 89 (2) (l) of CGST Rules, 2017
18. Refund Procedures
Presently Refund module is not available in ACES GST for GST Officers to process the claim.
Hence, it is being manually processed as per Board’s Circular No.17/17/2017-GST
dated 15-11-2017.
The taxable person has following option:
(1). Export of goods on payment of IGST and claim refund - Custom House of the port of export
(2). Export of services on payment of IGST and claim refund – Jurisdictional GST Office
(3). Export of goods / services without payment of IGST (under LUT) and claim refund of ITC –
Jurisdictional GST Office
20. Refund Procedures
Refund Forms
GST RFD-01 Refund Application form
GST RFD-1A Refund Application form (Manual)
GST RFD-02 Acknowledgement of Refund Applications
GST RFD-03 Notice of Deficiency on Application for Refund
GST RFD-04 Provisional Refund Sanction Order
GST RFD-05 Payment Advice
GST RFD-06 Refund Sanction/Rejection Order
GST RFD-07 A Order for Complete adjustment of claimed Refund
GST RFD-07 B Order for withholding of Refund
GST RFD-08 Issue notice for rejection of refund application
GST RFD-09 Furnish a reply against Issued Notice
GST RFD-10 Refund application form for Embassy/International Organisations
GST RFD-11 Furnishing of bond or Letter of Undertaking for export of goods or services
21. Refund Procedures – Export on payment of IGST
The SB filed by
an exporter shall
be deemed to
be an
application for
refund
Filing of correct
EGM or Export
Report
Filing of details
of the relevant
export invoices
contained in
Table 6A of
GSTR-1
Filing of a valid
return in GSTR-3
or GSTR- 3B
Sec.16(2) of IGST Act, 2017 r.w Sec.54 (3) of CGST Act, 2017
Rule 96 of CGST Rules, 2017
Board’s Circular No.17/17/2017-GST dated 15-11-2017
Board’s Instruction No.15/2017 dated 9-10-2017
22. Refund Procedures – Export on payment of IGST
By following the above said procedures, the system designated by the Customs shall process the
claim and the amount equal to the IGST paid in respect of such export shall be electronically
credited to the Bank account of the Applicant – Rule 96 (3) of CGST Rules, 2017
28. Refund Procedures – Export on payment of IGST
Refund for Export of Services:
A Statement containing the number and date of invoices and the relevant Bank Realisation Certificates or
Foreign Inward Remittance Certificates - Rule 89 (2(c)) of CGST Rules, 2017
29. Refund Procedures – Export on payment of IGST
Supplies (Good) to SEZ or SEZ Developer:
An application shall be filed by the Supplier of Goods after such goods have been
admitted in full in the SEZ.
Endorsement by the specified Officer of the Zone as the goods are for authorised
operations.
- Second proviso (a) to Rule 89 (1) of CGST Rules, 2017
Supplies (Services) to SEZ or SEZ Developer:
An application shall be filed by the Supplier of Services along with such evidence
regarding receipt of Services in the SEZ.
Endorsement by the specified Officer of the Zone as the Services are for authorised
operations.
- Second proviso (b) to Rule 89 (1) of CGST Rules, 2017
30. Refund Procedures – Export on payment of IGST
Deemed Export:
An application may be filed by
The recipient of Deemed Export Supplies
The Supplier of Deemed Export supplies
An undertaking by the recipient that no ITC on such supplies have been availed by him.
An undertaking by the recipient that he shall not claim refund in respect of such supplies and the supplier
may claim refund.
Acknowledgement by the jurisdictional Tax Officer of the Advance Authorisation holder or EPCG
Authorisation holder that the deemed export have been received by the Advance Authorisation holder or
EPCG Authorisation holder or a copy of the tax invoice under which such supplies have been made by the
supplier, duly singed by the recipient EOU.
- Third proviso to Rule 89 (1) of CGST Rules, 2017
Board’s Notification No.48/2017-CT dated 18-10-2017
31. Refund Procedures – Supplies to SEZ on payment of IGST
Board’s Notification No.55/2017-CT dated 15-11-2017
Board’s Circular No.17/17/2017-GST dated 15-11-2017
An application shall be filed in Form GST RFD-01A by the Supplier in the common
portal and a print out of the said form to the Jurisdictional Tax Officer assigned to him.
In case, not assigned to any Authority, the tax payer can file with any one of the authority with
an undertaking that claim has been made to only one of the authorities.
Documentary evidences as per statement 2 or 4 of Annexure to Form GST RFD-01 (i.e.
Filing of details of the relevant export invoices contained in Table 6B and Table 9
(amendments to earlier return w.r.t. Table 6B) of GSTR-1
32. Refund Procedures – Export without payment of IGST
Form GST RFD-
01A filed in the
common portal
and the amount
claimed get
debited in
Electronic Credit
Ledger
Generation of
ARN Number for
proof of debit .
An application
shall be filed
manually with
the jurisdictional
Tax Officer along
with the print
out of Form GST
RFD-01A
Filing of a
Statement 3 or 5
of Annexure to
GST RFD-01
Rule 86(3) of CGST Rules, 2017
Board’s Circular No.17/17/2017-GST dated 15-11-2017
Board’s Notification No.55/2017-CT dated 15-11-2017
38. Refund Procedure
Sec.89(4): Refund of unutilised credit in case of zero rated supplies of Goods/Services under LUT (Sec. 16(3) of IGST Act,
2017) would be determined as per the formula:
Refund Amount = (Turnover of Zero rated supply of goods + Turnover of Zero rated supply of services) x Net ITC / Adjusted
Total Turnover.
(A) "Refund amount" means the maximum refund that is admissible;
(B) "Net ITC" means input tax credit availed on inputs and input services during the relevant period;
(C) "Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during the relevant
period without payment of tax under bond or letter of undertaking;
(D) "Turnover of zero-rated supply of services" means the value of zero-rated supply of services made without payment of
tax under bond or letter of undertaking, calculated in the following manner, namely:-
Zero-rated supply of services is the aggregate of the payments received during the relevant period for zero-rated supply of
services and zero-rated supply of services where supply has been completed for which payment had been received in
advance in any period prior to the relevant period reduced by advances received for zero-rated supply of services for
which the supply of services has not been completed during the relevant period;
39. Refund Procedure
(E) "Adjusted Total turnover" means the turnover in a State or a Union territory, as defined under clause (112) of section 2,
excluding the value of exempt supplies other than zero-rated supplies, during the relevant period;
Sec.89(5) In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the
following formula :-
Maximum Refund Amount = {(Turnover of inverted rated supply of goods) x Net ITC ÷ Adjusted Total Turnover} - tax
payable on such inverted rated supply of goods
40. Refund Procedure
Turnover
of ZRSS
═
Turnover of ZRSS
Payments received
during the relevant
period
(e.g. Aug.2017) for
ZRSS
+
payments received
for ZRSS
where supply has been
completed for which
payment had
been received in advance
in any period prior to the
relevant period (e.g.
Aug.2017) for ZRSS
-
Advances received
for ZRSS for which
the supply
of services has not
been completed
during the relevant
period (e.g.
Aug.2017) for ZRSS
41. Refund Procedure – Excess Balance in Electronic cash ledger
Step 1: Login to GST Portal.
Step 2: Go to ‘Services’ > ‘Refunds’ > ‘Application for Refund’
Step 3: Select ‘Refund of Excess Balance in Electronic Cash Ledger’ and click on ‘CREATE’.
Step 4: Once you click on ‘CREATE’ in the above step a screen will appear reflecting all balances
in the Electronic Cash Ledger which can be claimed as refund.
Step 5: Select the Bank Account (in which you want the refund to be credited) from the drop-
down and click on ‘SAVE’.
Presently Refund module is not available in ACES GST for Officers to process the claim..
45. Refund Procedures – Export on payment of IGST
Manual filing and processing:
Notwithstanding anything contained in this Chapter, in respect of any process or procedure
prescribed herein, any reference to electronic filing of an application, intimation, reply,
declaration, statement or electronic issuance of a notice, order or certificate on the common
portal shall, in respect of that process or procedure, include manual filing of the said application,
intimation, reply, declaration, statement or issuance of the said notice, order or certificate in
such Forms as appended to these rules - Rule 97A of CGST Rules, 2017.
Board’s Notification No.55/2017-CT dated 15.11.2017
