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Sharanya Radhakrishnan Nair

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Claim Your Rightful Cash: A Comprehensive Guide to GST Refunds in India

 

The Goods and Services Tax (GST) has revolutionized the tax landscape in India. While its benefits are undeniable, understanding and navigating the intricacies of reclaiming excess tax paid, particularly through the GST refund process, can be quite challenging. This blog aims to demystify the GST refund process and empower taxpayers with the knowledge to effectively claim their rightful dues. Goods and Services Tax refund is a mechanism designed to alleviate the tax burden on businesses. It allows eligible entities to reclaim GST paid on inputs or input services. This is particularly beneficial for exporters and businesses facing an inverted duty structure.

Situations Leading To Refund Claims :

A GST refund essentially arises when the tax paid on inputs exceeds the tax liability on outputs. This can occur due to various scenarios, such as:

 

  1. Export of Goods or services
  2. Supplies to SEZs units and developers
  3. Deemed Export supplies
  4. Refund of taxes on purchase made by UN or embassies etc
  5. Refund arising on account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court
  6. Refund of accumulated Input Tax Credit on account of inverted duty structure
  7. Finalisation of provisional assessment
  8. Refund of pre-deposit
  9. Excess payment due to mistake
  10. Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India
  11. Refund on account of issuance of refund vouchers for taxes paid on advances against which goods or services have not been supplied
  12. Refund of CGST & SGST paid by treating the supply as intra-State supply which is subsequently held as inter-State supply and vice versa

Time Limit for Filing GST Refund Request :

 

In accordance with GST, the applicant must submit claims for GST refunds within two years of the relevant date. If the claim be valid, the reimbursement must be approved within 60 days of the claim’s receiving date. Interest on the withheld refund shall apply at the rate of 6%. An interest rate of 9% per annum shall apply on the delayed refund (beyond 60 days, arising from the order of authority/ court).

The Formal Refund Process:

Claiming a GST refund involves a specific online procedure through the GSTN portal:

  1. Form RFD-01: File the GST refund application electronically using Form RFD-01 within two years from the relevant date of excess tax payment.
  2. Supporting Documents: Attach all necessary documents, including invoices, proof of export, and bank account details.
  3. Scrutiny and Verification: The tax authorities scrutinize the claim and may request additional information if necessary.
  4. Refund Grant: Upon successful verification, the refund is credited to the taxpayer’s bank account within 30 days.

Essential Points to Remember:

  • Documentation: Maintain proper records and gather all necessary documents to support your claim.
  • Technical Errors: Be mindful of technical glitches on the GSTN portal and maintain backups of your application and documents.
  • Professional Assistance: Seek guidance from chartered accountants or tax advisors for complex cases or large refunds.

The Bottom Line:

While claiming GST refunds can seem daunting, proper knowledge can ensure a smooth and successful process. By understanding the eligibility criteria, adhering to the procedures, and maintaining detailed records, taxpayers can efficiently navigate the GST refund system and recover their rightful dues, ultimately contributing to better cash flow and financial health.

FAQ on GST Refund :

If your claim is rejected, you will receive a notice explaining the reason. You can rectify any errors or provide additional information and re-submit your claim within 30 days of receiving the rejection notice.

  • Incomplete or incorrect documentation
  • Technical glitches on the GSTN portal
  • Delays in getting required documents from suppliers
  • Misinterpretation of eligibility criteria
  • Lack of proper record-keeping

Try obtaining duplicate invoices from your suppliers. If unavailable, explain the situation in the claim form and submit any related documents you have as evidence.

You can track the status of your claim on the GSTN portal under the “Refund” section.

Yes, exports must be made within the time frame specified, and necessary export documentation should be provided.

No, there is no threshold limit for claiming a GST refund. However, specific conditions and documentation must be met.

No, amendments are not allowed after submission. Ensure accuracy before filing to avoid delays or rejections.

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