Refunds | Taxation for CA Intermediate PDF Download

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business. The provisions pertaining to refund contained in the GST law aim to streamline and 
standardize the refund procedures under GST regime. Thus, under the GST regime, there will 
be a standardized form for making any claim for refunds. The claim and sanctioning procedure 
will be completely online and time bound, which is a marked departure from the existing time 
consuming and cumbersome procedure. 
 
2. When can the refund be claimed? 
Situations Leading to Refund Claims: 
The relevant date provision embodied in Section 54 of the CGST Act, 2017, provision 
contained in Section 77 of the CGST Act, 2017 and the requirement of submission of relevant 
documents as listed in Rule 1(2) of Refund Rules is an indicator of the various situations that 
may necessitate a refund claim. A claim for refund may arise due to: 
• Export of goods or services 
• Supplies to SEZs units and developers 
• Deemed exports 
• Refund of taxes on purchase made by UN or embassies etc. 
• Refund arising on account of judgment, decree, order or direction of the Appellate 
Authority, Appellate Tribunal or any court 
• Refund of accumulated Input Tax Credit on account of inverted duty structure 
• Finalization of provisional assessment 
• Refund of pre-deposit 
• Excess payment due to mistake 
• Refunds to International tourists of GST paid on goods in India and carried abroad at the 
time of their departure from India 
• Refund on account of issuance of refund vouchers for taxes paid on advances against 
which, goods or services have not been supplied 
• Refund of CGST & SGST paid by treating the supply as intra-State supply which is 
subsequently held as inter-State supply and vice versa 
Thus, practically every situation is covered. The GST law requires that every claim for refund 
is to be filed within 2 years from the relevant date. 
 
3. Credit Notes 
Further, Section 34 of the CGST Act, 2017 provides for issuance of credit notes for post supply 
discounts or if goods are returned back within a stipulated time. When such credit notes are 
issued, obviously it would call for reduction in output liability of the supplier. Hence, the taxes 
paid initially on the supply would be higher than what is actually payable. In such a scenario, 
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business. The provisions pertaining to refund contained in the GST law aim to streamline and 
standardize the refund procedures under GST regime. Thus, under the GST regime, there will 
be a standardized form for making any claim for refunds. The claim and sanctioning procedure 
will be completely online and time bound, which is a marked departure from the existing time 
consuming and cumbersome procedure. 
 
2. When can the refund be claimed? 
Situations Leading to Refund Claims: 
The relevant date provision embodied in Section 54 of the CGST Act, 2017, provision 
contained in Section 77 of the CGST Act, 2017 and the requirement of submission of relevant 
documents as listed in Rule 1(2) of Refund Rules is an indicator of the various situations that 
may necessitate a refund claim. A claim for refund may arise due to: 
• Export of goods or services 
• Supplies to SEZs units and developers 
• Deemed exports 
• Refund of taxes on purchase made by UN or embassies etc. 
• Refund arising on account of judgment, decree, order or direction of the Appellate 
Authority, Appellate Tribunal or any court 
• Refund of accumulated Input Tax Credit on account of inverted duty structure 
• Finalization of provisional assessment 
• Refund of pre-deposit 
• Excess payment due to mistake 
• Refunds to International tourists of GST paid on goods in India and carried abroad at the 
time of their departure from India 
• Refund on account of issuance of refund vouchers for taxes paid on advances against 
which, goods or services have not been supplied 
• Refund of CGST & SGST paid by treating the supply as intra-State supply which is 
subsequently held as inter-State supply and vice versa 
Thus, practically every situation is covered. The GST law requires that every claim for refund 
is to be filed within 2 years from the relevant date. 
 
3. Credit Notes 
Further, Section 34 of the CGST Act, 2017 provides for issuance of credit notes for post supply 
discounts or if goods are returned back within a stipulated time. When such credit notes are 
issued, obviously it would call for reduction in output liability of the supplier. Hence, the taxes 
paid initially on the supply would be higher than what is actually payable. In such a scenario, 
the excess tax paid by the supplier needs to be refunded. However, instead of refunding it 
outright, it is sought to be adjusted after verifying the corresponding reduction in the input tax 
credit availed by the recipient. Section 43 of the CGST Act, 2017 provides for procedure for 
reduction in output liability on account of issuance of such credit notes. This is another form of 
refund by adjustments in the output tax liability. 
 
4. What is the time limit for claiming the refund? 
The time limit for claiming a refund is 2 years from relevant date. 
The relevant date is different in every case. The different relevant date’s scenario is: 
 
• When the goods are exported through air or sea, then relevant date shall be the date on 
which such ship or aircraft leaves India 
• When the goods are carried by a land vehicle, then relevant date shall be the date when 
the goods cross the land frontier of the country 
• When the goods are sent through post, then relevant date shall be the date of dispatch of 
goods from the post office 
• When the supply includes services, and when the same is completed before receipt of 
payment, then relevant date shall be the payment receipt date 
• Similarly, when the services are performed after receipt of an advance, then relevant 
date shall be the invoice date 
• Where refund claim is made for excess input tax credit unutilized, then relevant date 
shall be the end of the financial year for which such refund claim is being made 
• Where the goods are supplied for deemed exports, i.e. supply to SEZ or 100% EOU, the 
relevant shall be return filing date related to such deemed exports was filed 
• Where refund arises due to an order passed in favour of the appellant, then relevant date 
shall be the date of such order 
• Where tax was paid following a provisional assessment and refund now arises, then 
relevant date shall be the date at which such tax was adjusted 
• When the person claiming refund is not the supplier, then relevant date shall be the date 
at which the goods are received by such person 
• For all other cases, relevant date shall be the date of payment of tax 
 
It is mandatory to keep in mind these relevant dates as failure to file refund applications within 
mentioned time can lead to blockage of credit. 
Also if refund is paid with delay an interest of 24% p.a. is payable by the government. 
 
5. How to claim GST refund? 
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business. The provisions pertaining to refund contained in the GST law aim to streamline and 
standardize the refund procedures under GST regime. Thus, under the GST regime, there will 
be a standardized form for making any claim for refunds. The claim and sanctioning procedure 
will be completely online and time bound, which is a marked departure from the existing time 
consuming and cumbersome procedure. 
 
2. When can the refund be claimed? 
Situations Leading to Refund Claims: 
The relevant date provision embodied in Section 54 of the CGST Act, 2017, provision 
contained in Section 77 of the CGST Act, 2017 and the requirement of submission of relevant 
documents as listed in Rule 1(2) of Refund Rules is an indicator of the various situations that 
may necessitate a refund claim. A claim for refund may arise due to: 
• Export of goods or services 
• Supplies to SEZs units and developers 
• Deemed exports 
• Refund of taxes on purchase made by UN or embassies etc. 
• Refund arising on account of judgment, decree, order or direction of the Appellate 
Authority, Appellate Tribunal or any court 
• Refund of accumulated Input Tax Credit on account of inverted duty structure 
• Finalization of provisional assessment 
• Refund of pre-deposit 
• Excess payment due to mistake 
• Refunds to International tourists of GST paid on goods in India and carried abroad at the 
time of their departure from India 
• Refund on account of issuance of refund vouchers for taxes paid on advances against 
which, goods or services have not been supplied 
• Refund of CGST & SGST paid by treating the supply as intra-State supply which is 
subsequently held as inter-State supply and vice versa 
Thus, practically every situation is covered. The GST law requires that every claim for refund 
is to be filed within 2 years from the relevant date. 
 
3. Credit Notes 
Further, Section 34 of the CGST Act, 2017 provides for issuance of credit notes for post supply 
discounts or if goods are returned back within a stipulated time. When such credit notes are 
issued, obviously it would call for reduction in output liability of the supplier. Hence, the taxes 
paid initially on the supply would be higher than what is actually payable. In such a scenario, 
the excess tax paid by the supplier needs to be refunded. However, instead of refunding it 
outright, it is sought to be adjusted after verifying the corresponding reduction in the input tax 
credit availed by the recipient. Section 43 of the CGST Act, 2017 provides for procedure for 
reduction in output liability on account of issuance of such credit notes. This is another form of 
refund by adjustments in the output tax liability. 
 
4. What is the time limit for claiming the refund? 
The time limit for claiming a refund is 2 years from relevant date. 
The relevant date is different in every case. The different relevant date’s scenario is: 
 
• When the goods are exported through air or sea, then relevant date shall be the date on 
which such ship or aircraft leaves India 
• When the goods are carried by a land vehicle, then relevant date shall be the date when 
the goods cross the land frontier of the country 
• When the goods are sent through post, then relevant date shall be the date of dispatch of 
goods from the post office 
• When the supply includes services, and when the same is completed before receipt of 
payment, then relevant date shall be the payment receipt date 
• Similarly, when the services are performed after receipt of an advance, then relevant 
date shall be the invoice date 
• Where refund claim is made for excess input tax credit unutilized, then relevant date 
shall be the end of the financial year for which such refund claim is being made 
• Where the goods are supplied for deemed exports, i.e. supply to SEZ or 100% EOU, the 
relevant shall be return filing date related to such deemed exports was filed 
• Where refund arises due to an order passed in favour of the appellant, then relevant date 
shall be the date of such order 
• Where tax was paid following a provisional assessment and refund now arises, then 
relevant date shall be the date at which such tax was adjusted 
• When the person claiming refund is not the supplier, then relevant date shall be the date 
at which the goods are received by such person 
• For all other cases, relevant date shall be the date of payment of tax 
 
It is mandatory to keep in mind these relevant dates as failure to file refund applications within 
mentioned time can lead to blockage of credit. 
Also if refund is paid with delay an interest of 24% p.a. is payable by the government. 
 
5. How to claim GST refund? 
The refund application has to be made in Form RFD-01 within 2 years from relevant date. If a 
GST refund claim is less than `2 lakhs, then a self-declaration of the applicant must be 
submitted to the effect that the incidence of tax has not been passed to any other person along 
with other documents. For GST refund claims exceeding `2 lakhs, a certificate from a Chartered 
Accountant/ Cost Accountant must be submitted along with the documents. 
 
Once the application made, an acknowledgement in Form RFD-02 will be auto generated for 
future references and sent across through an email and an SMS. In case the system finds some 
deficiencies in the refund application, then Form RFD-03 shall be sent to the tax payer to correct 
his application.