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Refund includes refund of tax paid on:,
Zero-rated supplies of goods or services or both; or
Inputs or input services used in the effecting such zero-rated supplies of goods or services or both; or
Supply of goods regarded as deemed exports; or
Refund of unutilized input tax credit at the end of any tax period.
Refund application is to be filed before the expiry of two years from the relevant date.
The person claiming refund has to make an application in Form GST RFD-01.
The refund application is to be made before the proper officer of IGST/CGST/SGST.
The balance of cash or credit after payment of tax, interest, penalty, fee or any other amount payment refund can be claimed as per provisions of Section 54. Once the refund is claimed, the amount of credit of CGST/SGST/ IGST (as the case may be) would be reduced to that extent.
Refund can only be claimed under specified circumstances: -
a) zero rated supplies made without payment of tax
b) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council.
Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.
The following registered persons can claim refund of unutilized ITC:
Persons undertaking exports (including other zero-rated supplies). Exception: No refund will be allowed on the goods exported out of India where such goods are subjected to export duty [second proviso to Section 54(3)];
Credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on outward supplies (other than cases of nil-rated or fully exempted supplies)
The following documents are required to be enclosed along with the refund application:
Documentary evidence to establish that a refund is due to the applicant (prescribed under Rule 1(2) of the Refund Rules, 2017, and
Documentary evidence to prove that incidence of tax and interest had not been passed on to any other person.
The proper officer may sanction refund of an amount up to ninety percent of the total amount of refund claimed, on a provisional basis in case of exporters. However, certain categories of persons may be notified, to whom provisional sanction of refund cannot be made.
The proper officer shall issue the order within sixty days from the date of receipt of refund application.
On receipt of application, where the proper officer is satisfied as regards the refund application filed, he would pass an order sanctioning the refund. In the following situations, the refund sanctioned would be paid to applicant,-
refund of tax on goods and/or services exported out of India or on inputs or input services used in the goods and/or services which are exported out of India;
refund of unutilized input tax credit under Section 54(3)
refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued
refund of tax in pursuance of Section 77
the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or
The tax or interest borne by such other class of applicants as the Central or a State Government may, on the recommendation of the Council, by notification, specify In all other cases, the amount sanctioned shall be credited to the Fund.