Ch 29 - Refunds in GST | GST Saral by CA Dhruv Aggarwal PDF Download

 Page 1


about:blank 11/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 29 - Refund i n GST 
 
 
 
 
 
CHAPTER 29 
 
Refund in GST 
EXECUTIVE SUMMARY 
?   Claiming refund of any tax and interest paid on such tax or any other amount paid by him, may make 
an application in that regard to the proper officer of before the expiry of two years from the relevant 
date . 
?   Relevant date is broadly as follows - (a) export of goods and supplies to SEZ - date of export (b) 
deemed  export -  date of return (c) export of services  -  date of receipt of payment  in foreign 
exchange (d) refund of unutilized input tax credit - the end of the financial year in which such claim 
for ref und arises. 
?   Refund  (except  in case  of exports  and  supplies  to  SEZ)  will be  subject  to  doctrine  of unjust 
enrichment, i.e. refund only if burden of tax has not been passed to another person. 
?   Amount claimed as refund should be shown as 'amount receivable' in the balance sheet. 
?   If tax amount is refunded by cheque or credit note to recipient, there cannot be unjust enrichment. 
?   Refund of unutilized input tax credit only in case of (a) exports and supplies to SEZ or (b) in cases 
where the credit has accumulated on account of rate of tax on inputs being hi gher than the rate of tax 
on output supplies (i nverted tax structure) but not in case of fully  exempt goods or services. 
?   In case of exports and supplies to SEZ (zero rated supply) refund will be on ratio basis as per 
formula given in Refund Rules. 
?   Refund is also permissible in case of deemed exports. The refund application has to be f iled by 
recipient of supplies. 
?   Claim for ref und of unutilized input should contain details as specified in Annex 1. 
?   IGST paid on any supply of goods to outbound tourist shall be refunded. 
?   Refund application should be f iled electronica ly in form GST RED-1 with specified documents and 
details. 
?   Ref und for balance in electronic cash ledger should be made through return. 
?   Deficiencies in refund claim will be intimated in form GST RED 3. 
?   If ref und is to be rejected, opportunity of personal hearing shall be given 
29.1 Refund of tax and interest 
 
Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, 
may make an application in that regard to the proper officer of IGST/CGST/SGST/UTGST before the expiry 
of two years from the relevant date in prescribe form and manner - section 54(1) of CGST Act. 
Present limit in excise and service tax is one year. 
Page 2


about:blank 11/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 29 - Refund i n GST 
 
 
 
 
 
CHAPTER 29 
 
Refund in GST 
EXECUTIVE SUMMARY 
?   Claiming refund of any tax and interest paid on such tax or any other amount paid by him, may make 
an application in that regard to the proper officer of before the expiry of two years from the relevant 
date . 
?   Relevant date is broadly as follows - (a) export of goods and supplies to SEZ - date of export (b) 
deemed  export -  date of return (c) export of services  -  date of receipt of payment  in foreign 
exchange (d) refund of unutilized input tax credit - the end of the financial year in which such claim 
for ref und arises. 
?   Refund  (except  in case  of exports  and  supplies  to  SEZ)  will be  subject  to  doctrine  of unjust 
enrichment, i.e. refund only if burden of tax has not been passed to another person. 
?   Amount claimed as refund should be shown as 'amount receivable' in the balance sheet. 
?   If tax amount is refunded by cheque or credit note to recipient, there cannot be unjust enrichment. 
?   Refund of unutilized input tax credit only in case of (a) exports and supplies to SEZ or (b) in cases 
where the credit has accumulated on account of rate of tax on inputs being hi gher than the rate of tax 
on output supplies (i nverted tax structure) but not in case of fully  exempt goods or services. 
?   In case of exports and supplies to SEZ (zero rated supply) refund will be on ratio basis as per 
formula given in Refund Rules. 
?   Refund is also permissible in case of deemed exports. The refund application has to be f iled by 
recipient of supplies. 
?   Claim for ref und of unutilized input should contain details as specified in Annex 1. 
?   IGST paid on any supply of goods to outbound tourist shall be refunded. 
?   Refund application should be f iled electronica ly in form GST RED-1 with specified documents and 
details. 
?   Ref und for balance in electronic cash ledger should be made through return. 
?   Deficiencies in refund claim will be intimated in form GST RED 3. 
?   If ref und is to be rejected, opportunity of personal hearing shall be given 
29.1 Refund of tax and interest 
 
Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, 
may make an application in that regard to the proper officer of IGST/CGST/SGST/UTGST before the expiry 
of two years from the relevant date in prescribe form and manner - section 54(1) of CGST Act. 
Present limit in excise and service tax is one year. 
about:blank 22/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
29.1-1 Refund of balance  in Electronic Cash Register 
 
Refund from balance in electronic cash register can be made (presumably without time limit) - proviso  to 
section 54(1) of CGST Act. Money is electronic Cash Register is only deposit. Hence, principle of unjust 
enrichment does not arise. 
29.2 Application and procedure of refund 
 
The application shall be accompanied by - 
 
(a)   Such documentary evidence as may be prescribed to establish that a refund is due to the applicant, 
and 
(b)   Evidence that incidence of duty has not been passed on by him to any other person. However, 
where  the  amount  claimed  as  refund  is  less  than two  lakh rupees,  self declaration  based  on 
documents available with him is sufficient - section 54(4) of CGST Act. 
Scrutiny of refund claim and passing of order - If, on receipt of any such application, the proper officer is 
satisfied  that the  whole  or part of the  amount  claimed  as ref und  is refundable,  he may make  an order 
accordingly and the amount so determined shall be credited to the 'Consumer Welfare Fund', except where 
taxable person proves that he has not passed on burden of tax to another person. 
Time limit for deciding refund claim - The proper officer shall issue the order refusing or accepting refund 
claim within sixty days from the date of receipt of application complete in a l respects - section 54(5) of CGST 
Act. 
[Thus, department can surely find some excuse for not deciding refund claim within 60 days] 
 
No refund  if amount  less than Rs 1,000 - No refund shall be paid to an applicant if the amount is less than 
rupees one thousand - section 54(14) of CGST Act. 
29.2-1 Application for refund of tax, interest, penalty,  fees or any other amount 
 
Any person, except the persons covered by notification issued under section 55 (UN Agencies, Embassies), 
claiming refund of any tax, interest, penalty, fees or any other amount paid by him, may f ile an application in 
form GST RFD-01electronica ly through the Common Portal either directly or through a Facilitation Centre - 
Rule 1(1) of Refund Rules. 
Any claim for refund relating to balance in the electronic cash ledger in accordance with the provisions of 
section 49(6) may also be made through the return furnished for the relevant tax period in form GSTR-3, form 
GSTR-4 or form GSTR-7, as the case may be:- first proviso to Rule 1(1) of Refund Rules. 
In case of export of goods, application for refund shall be f iled only after the export manifest or an export 
report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods - 
second proviso to Rule 1(1) of Refund Rules. 
In respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application 
for refund shall be f iled by the supplier of goods after such goods have been admitted in fu l in the Special 
Economic Zone for authorized operations, as endorsed by the specified officer of the Zone - third proviso to 
Rule 1(1) of Refund Rules. 
In respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application 
for refund shall be f iled by the supplier of services along with such evidence regarding receipt of services for 
authorized operations as endorsed by the specified officer of the Zone - fourth proviso to Rule 1(1) of Refund 
Rules. 
In respect of supplies regarded as deemed exports, the application shall be f iled by the recipient of deemed 
Page 3


about:blank 11/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 29 - Refund i n GST 
 
 
 
 
 
CHAPTER 29 
 
Refund in GST 
EXECUTIVE SUMMARY 
?   Claiming refund of any tax and interest paid on such tax or any other amount paid by him, may make 
an application in that regard to the proper officer of before the expiry of two years from the relevant 
date . 
?   Relevant date is broadly as follows - (a) export of goods and supplies to SEZ - date of export (b) 
deemed  export -  date of return (c) export of services  -  date of receipt of payment  in foreign 
exchange (d) refund of unutilized input tax credit - the end of the financial year in which such claim 
for ref und arises. 
?   Refund  (except  in case  of exports  and  supplies  to  SEZ)  will be  subject  to  doctrine  of unjust 
enrichment, i.e. refund only if burden of tax has not been passed to another person. 
?   Amount claimed as refund should be shown as 'amount receivable' in the balance sheet. 
?   If tax amount is refunded by cheque or credit note to recipient, there cannot be unjust enrichment. 
?   Refund of unutilized input tax credit only in case of (a) exports and supplies to SEZ or (b) in cases 
where the credit has accumulated on account of rate of tax on inputs being hi gher than the rate of tax 
on output supplies (i nverted tax structure) but not in case of fully  exempt goods or services. 
?   In case of exports and supplies to SEZ (zero rated supply) refund will be on ratio basis as per 
formula given in Refund Rules. 
?   Refund is also permissible in case of deemed exports. The refund application has to be f iled by 
recipient of supplies. 
?   Claim for ref und of unutilized input should contain details as specified in Annex 1. 
?   IGST paid on any supply of goods to outbound tourist shall be refunded. 
?   Refund application should be f iled electronica ly in form GST RED-1 with specified documents and 
details. 
?   Ref und for balance in electronic cash ledger should be made through return. 
?   Deficiencies in refund claim will be intimated in form GST RED 3. 
?   If ref und is to be rejected, opportunity of personal hearing shall be given 
29.1 Refund of tax and interest 
 
Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, 
may make an application in that regard to the proper officer of IGST/CGST/SGST/UTGST before the expiry 
of two years from the relevant date in prescribe form and manner - section 54(1) of CGST Act. 
Present limit in excise and service tax is one year. 
about:blank 22/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
29.1-1 Refund of balance  in Electronic Cash Register 
 
Refund from balance in electronic cash register can be made (presumably without time limit) - proviso  to 
section 54(1) of CGST Act. Money is electronic Cash Register is only deposit. Hence, principle of unjust 
enrichment does not arise. 
29.2 Application and procedure of refund 
 
The application shall be accompanied by - 
 
(a)   Such documentary evidence as may be prescribed to establish that a refund is due to the applicant, 
and 
(b)   Evidence that incidence of duty has not been passed on by him to any other person. However, 
where  the  amount  claimed  as  refund  is  less  than two  lakh rupees,  self declaration  based  on 
documents available with him is sufficient - section 54(4) of CGST Act. 
Scrutiny of refund claim and passing of order - If, on receipt of any such application, the proper officer is 
satisfied  that the  whole  or part of the  amount  claimed  as ref und  is refundable,  he may make  an order 
accordingly and the amount so determined shall be credited to the 'Consumer Welfare Fund', except where 
taxable person proves that he has not passed on burden of tax to another person. 
Time limit for deciding refund claim - The proper officer shall issue the order refusing or accepting refund 
claim within sixty days from the date of receipt of application complete in a l respects - section 54(5) of CGST 
Act. 
[Thus, department can surely find some excuse for not deciding refund claim within 60 days] 
 
No refund  if amount  less than Rs 1,000 - No refund shall be paid to an applicant if the amount is less than 
rupees one thousand - section 54(14) of CGST Act. 
29.2-1 Application for refund of tax, interest, penalty,  fees or any other amount 
 
Any person, except the persons covered by notification issued under section 55 (UN Agencies, Embassies), 
claiming refund of any tax, interest, penalty, fees or any other amount paid by him, may f ile an application in 
form GST RFD-01electronica ly through the Common Portal either directly or through a Facilitation Centre - 
Rule 1(1) of Refund Rules. 
Any claim for refund relating to balance in the electronic cash ledger in accordance with the provisions of 
section 49(6) may also be made through the return furnished for the relevant tax period in form GSTR-3, form 
GSTR-4 or form GSTR-7, as the case may be:- first proviso to Rule 1(1) of Refund Rules. 
In case of export of goods, application for refund shall be f iled only after the export manifest or an export 
report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods - 
second proviso to Rule 1(1) of Refund Rules. 
In respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application 
for refund shall be f iled by the supplier of goods after such goods have been admitted in fu l in the Special 
Economic Zone for authorized operations, as endorsed by the specified officer of the Zone - third proviso to 
Rule 1(1) of Refund Rules. 
In respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application 
for refund shall be f iled by the supplier of services along with such evidence regarding receipt of services for 
authorized operations as endorsed by the specified officer of the Zone - fourth proviso to Rule 1(1) of Refund 
Rules. 
In respect of supplies regarded as deemed exports, the application shall be f iled by the recipient of deemed 
about:blank 33/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
export supplies- fifth proviso to Rule 1(1) of Refund Rules. 
 
Refund of any amount, after adjusting the tax payable by the applicant out of the advance tax deposited by him 
under section 27 (casual taxable person or non-resident taxable person) at the time of registration, shall be 
claimed either in the last return required to be furnished by him or only after furnishing of the said last return - 
sixth proviso to Rule 1(1) of Refund Rules. 
29.2-2 Documents to be filed with refund claim 
 
The  application  for  refund  under  rule  1(1)  shall be  accompanied  by any of the  fo lowing documentary 
evidences, as applicable, to establish that a refund is due to the applicant: 
 
(a)   the reference number of the order and a copy of the order passed by the proper officer or an 
appe late authority or Appe late Tribunal or court resulting in such refund or reference number of the 
payment of the amount specified in section 107(6) and section 112(8) claimed as refund; 
(b)   a statement containing the number and date of shipping Bills or Bills of export and the number 
and date of relevant export i nvoices, in a case where the refund is on account of export of goods; 
(c)   a statement containing the number and date of i nvoices and the relevant Bank Realization Certificates 
or Foreign Inward Remittance Certificates, as the case may be, in a case where the ref und is on 
account of export of services; 
(d)   a statement containing the number and date of invoices as prescribed in rule Invoice 1 along with the 
evidence regarding endorsement specified in the third proviso to sub-rule (1) in case of supply of 
goods made to a Special Economic Zone unit or a Special Economic Zone developer; 
(e)   a  statement  containing  the  number  and  date  of i nvoices,  the  evidence  regarding  endorsement 
specified in the fourth proviso to sub-rule (1) and the details of payment, along with proof thereof, 
made  by the  recipient  to  the  supplier  for  authorized  operations  as  defined  under  the  Special 
Economic Zone Act, 2005, in a case where the refund is on account of supply of services made to a 
Special Economic Zone unit or a Special Economic Zone developer; 
(f)  a statement containing the number and date of invoices along with such other evidence as may be 
notified in this behalf, in a case where the refund is on account of deemed exports. 
(g)   a statement in Annex 1 of form GST RFD-01containing the number and date of invoices received 
and issued during a tax period in a case where the claim pertains to refund of any unutilized input tax 
credit under section 54(3) 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; 
(h)   the reference number of the final assessment order and a copy of the said order in a case where the 
refund arises on account of finalisation of provisional assessment; 
(i)   a declaration 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 does not 
exceed two lakh rupees. However, a declaration is not required to be furnished in respect of cases 
covered under sections 54(8)(a), 54(8)(b), 54(8)(c) or 54(8)(d) of CGST Act. 
(j)   a  Certificate  in Annex  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: However, a declaration is not required to be furnished in respect of cases covered 
under sections 54(8)(a), 54(8)(b), 54(8)(c) or 54(8)(d) of CGST Act. 
Meaning  of invoice where service not provided - For purpose of section 54(8)(c) of CGST Act, "invoice" 
Page 4


about:blank 11/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 29 - Refund i n GST 
 
 
 
 
 
CHAPTER 29 
 
Refund in GST 
EXECUTIVE SUMMARY 
?   Claiming refund of any tax and interest paid on such tax or any other amount paid by him, may make 
an application in that regard to the proper officer of before the expiry of two years from the relevant 
date . 
?   Relevant date is broadly as follows - (a) export of goods and supplies to SEZ - date of export (b) 
deemed  export -  date of return (c) export of services  -  date of receipt of payment  in foreign 
exchange (d) refund of unutilized input tax credit - the end of the financial year in which such claim 
for ref und arises. 
?   Refund  (except  in case  of exports  and  supplies  to  SEZ)  will be  subject  to  doctrine  of unjust 
enrichment, i.e. refund only if burden of tax has not been passed to another person. 
?   Amount claimed as refund should be shown as 'amount receivable' in the balance sheet. 
?   If tax amount is refunded by cheque or credit note to recipient, there cannot be unjust enrichment. 
?   Refund of unutilized input tax credit only in case of (a) exports and supplies to SEZ or (b) in cases 
where the credit has accumulated on account of rate of tax on inputs being hi gher than the rate of tax 
on output supplies (i nverted tax structure) but not in case of fully  exempt goods or services. 
?   In case of exports and supplies to SEZ (zero rated supply) refund will be on ratio basis as per 
formula given in Refund Rules. 
?   Refund is also permissible in case of deemed exports. The refund application has to be f iled by 
recipient of supplies. 
?   Claim for ref und of unutilized input should contain details as specified in Annex 1. 
?   IGST paid on any supply of goods to outbound tourist shall be refunded. 
?   Refund application should be f iled electronica ly in form GST RED-1 with specified documents and 
details. 
?   Ref und for balance in electronic cash ledger should be made through return. 
?   Deficiencies in refund claim will be intimated in form GST RED 3. 
?   If ref und is to be rejected, opportunity of personal hearing shall be given 
29.1 Refund of tax and interest 
 
Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, 
may make an application in that regard to the proper officer of IGST/CGST/SGST/UTGST before the expiry 
of two years from the relevant date in prescribe form and manner - section 54(1) of CGST Act. 
Present limit in excise and service tax is one year. 
about:blank 22/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
29.1-1 Refund of balance  in Electronic Cash Register 
 
Refund from balance in electronic cash register can be made (presumably without time limit) - proviso  to 
section 54(1) of CGST Act. Money is electronic Cash Register is only deposit. Hence, principle of unjust 
enrichment does not arise. 
29.2 Application and procedure of refund 
 
The application shall be accompanied by - 
 
(a)   Such documentary evidence as may be prescribed to establish that a refund is due to the applicant, 
and 
(b)   Evidence that incidence of duty has not been passed on by him to any other person. However, 
where  the  amount  claimed  as  refund  is  less  than two  lakh rupees,  self declaration  based  on 
documents available with him is sufficient - section 54(4) of CGST Act. 
Scrutiny of refund claim and passing of order - If, on receipt of any such application, the proper officer is 
satisfied  that the  whole  or part of the  amount  claimed  as ref und  is refundable,  he may make  an order 
accordingly and the amount so determined shall be credited to the 'Consumer Welfare Fund', except where 
taxable person proves that he has not passed on burden of tax to another person. 
Time limit for deciding refund claim - The proper officer shall issue the order refusing or accepting refund 
claim within sixty days from the date of receipt of application complete in a l respects - section 54(5) of CGST 
Act. 
[Thus, department can surely find some excuse for not deciding refund claim within 60 days] 
 
No refund  if amount  less than Rs 1,000 - No refund shall be paid to an applicant if the amount is less than 
rupees one thousand - section 54(14) of CGST Act. 
29.2-1 Application for refund of tax, interest, penalty,  fees or any other amount 
 
Any person, except the persons covered by notification issued under section 55 (UN Agencies, Embassies), 
claiming refund of any tax, interest, penalty, fees or any other amount paid by him, may f ile an application in 
form GST RFD-01electronica ly through the Common Portal either directly or through a Facilitation Centre - 
Rule 1(1) of Refund Rules. 
Any claim for refund relating to balance in the electronic cash ledger in accordance with the provisions of 
section 49(6) may also be made through the return furnished for the relevant tax period in form GSTR-3, form 
GSTR-4 or form GSTR-7, as the case may be:- first proviso to Rule 1(1) of Refund Rules. 
In case of export of goods, application for refund shall be f iled only after the export manifest or an export 
report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods - 
second proviso to Rule 1(1) of Refund Rules. 
In respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application 
for refund shall be f iled by the supplier of goods after such goods have been admitted in fu l in the Special 
Economic Zone for authorized operations, as endorsed by the specified officer of the Zone - third proviso to 
Rule 1(1) of Refund Rules. 
In respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application 
for refund shall be f iled by the supplier of services along with such evidence regarding receipt of services for 
authorized operations as endorsed by the specified officer of the Zone - fourth proviso to Rule 1(1) of Refund 
Rules. 
In respect of supplies regarded as deemed exports, the application shall be f iled by the recipient of deemed 
about:blank 33/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
export supplies- fifth proviso to Rule 1(1) of Refund Rules. 
 
Refund of any amount, after adjusting the tax payable by the applicant out of the advance tax deposited by him 
under section 27 (casual taxable person or non-resident taxable person) at the time of registration, shall be 
claimed either in the last return required to be furnished by him or only after furnishing of the said last return - 
sixth proviso to Rule 1(1) of Refund Rules. 
29.2-2 Documents to be filed with refund claim 
 
The  application  for  refund  under  rule  1(1)  shall be  accompanied  by any of the  fo lowing documentary 
evidences, as applicable, to establish that a refund is due to the applicant: 
 
(a)   the reference number of the order and a copy of the order passed by the proper officer or an 
appe late authority or Appe late Tribunal or court resulting in such refund or reference number of the 
payment of the amount specified in section 107(6) and section 112(8) claimed as refund; 
(b)   a statement containing the number and date of shipping Bills or Bills of export and the number 
and date of relevant export i nvoices, in a case where the refund is on account of export of goods; 
(c)   a statement containing the number and date of i nvoices and the relevant Bank Realization Certificates 
or Foreign Inward Remittance Certificates, as the case may be, in a case where the ref und is on 
account of export of services; 
(d)   a statement containing the number and date of invoices as prescribed in rule Invoice 1 along with the 
evidence regarding endorsement specified in the third proviso to sub-rule (1) in case of supply of 
goods made to a Special Economic Zone unit or a Special Economic Zone developer; 
(e)   a  statement  containing  the  number  and  date  of i nvoices,  the  evidence  regarding  endorsement 
specified in the fourth proviso to sub-rule (1) and the details of payment, along with proof thereof, 
made  by the  recipient  to  the  supplier  for  authorized  operations  as  defined  under  the  Special 
Economic Zone Act, 2005, in a case where the refund is on account of supply of services made to a 
Special Economic Zone unit or a Special Economic Zone developer; 
(f)  a statement containing the number and date of invoices along with such other evidence as may be 
notified in this behalf, in a case where the refund is on account of deemed exports. 
(g)   a statement in Annex 1 of form GST RFD-01containing the number and date of invoices received 
and issued during a tax period in a case where the claim pertains to refund of any unutilized input tax 
credit under section 54(3) 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; 
(h)   the reference number of the final assessment order and a copy of the said order in a case where the 
refund arises on account of finalisation of provisional assessment; 
(i)   a declaration 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 does not 
exceed two lakh rupees. However, a declaration is not required to be furnished in respect of cases 
covered under sections 54(8)(a), 54(8)(b), 54(8)(c) or 54(8)(d) of CGST Act. 
(j)   a  Certificate  in Annex  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: However, a declaration is not required to be furnished in respect of cases covered 
under sections 54(8)(a), 54(8)(b), 54(8)(c) or 54(8)(d) of CGST Act. 
Meaning  of invoice where service not provided - For purpose of section 54(8)(c) of CGST Act, "invoice" 
about:blank 44/13 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
means invoice conforming to the provisions contained in section 31 [This covers cases where service has not 
been provided and invoice either not issued or refund voucher issued. This covers cases where advance was 
received but service was not provided].- Explanation 1 to rule 1(2) of Refund Rules. 
If tax was recovered, it means duty incidence  has been passed on - where the amount of tax has been 
recovered from the recipient, it shall be deemed that the incidence of tax has been passed on to the ultimate 
consumer [indeed obvious] 
29.2-3 Procedure after submitting refund application 
 
Where the application relates to a claim for refund from the electronic cash ledger, an acknowledgement in 
form GST RFD-02 shall be made available to the applicant through the Common Portal electronica ly, clearly 
indicating the date of filing of the claim - Rule 2(1) of Refund Rules. 
The application for refund, other than claim for refund from electronic cash ledger, shall be forwarded to the 
proper officer who sha l, within fifteen days of filing of the said application, scrutinize the application for its 
completeness and where the application is found to be complete in terms of sub-rule (2), (3) and (4) of rule 1, 
an acknowledgement  in form GST RFD-02 shall be made available to the applicant through the Common 
Portal electronica ly, clearly indicating the date of f iling of the claim for refund. - Rule 2(2) of Refund Rules. 
Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in 
form GST RFD-03 through the Common Portal electronica ly, requiring him to f ile a refund application after 
rectification of such deficiencies - Rule2(3) of Refund Rules. 
Where deficiencies have been communicated in form GST RFD-03under the SGST Rules, the same shall also 
deemed to have been communicated under this Rule along with deficiencies communicated under rule 2(3) - 
Rule 2(4) of Refund Rules [and vice versa] 
29.2-4 Order sanctioning refund 
 
If, upon examination of the application, the proper officer is satisfied that a refund under section 54(3) is due 
and payable to the applicant, he shall make an order in form GST RFD- 06, sanctioning the amount of refund 
to which the applicant is entitled, mentioning therein the amount, if any, refunded to him on a provisional basis 
under section 54(6) of CGST Act, amount adjusted against any outstanding demand under the Act or under 
any existing law and the balance amount refundable - Rule 4(1) of Ref und Rules. 
In cases where the amount of refund is completely adjusted against any outstanding demand under the Act or 
under any existing law, an order giving details of the adjustment may be issued in form GST RFD-07. 
29.2-5 Show Cause  Notice if whole or part of refund is not admissible 
 
If the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the amount 
claimed as refund is not admissible or is not payable to the applicant, he shall issue a notice in form GST RFD- 
08 to the applicant, requiring him to furnish a reply in form GST RFD-09 within fifteen days of the receipt of 
such notice and after considering the reply, make an order in form GST RFD-06, sanctioning the amount of 
refund in whole or part, or rejecting the said refund claim and the said order shall be made available to the 
applicant electronica ly and the provision of rule 4(1) sha l, mutatis mutandis, apply to the extent refund is 
a lowed - Rule 4(2) of Refund Rules. 
No application for refund shall be rejected without giving the applicant a reasonable opportunity of being 
heard. 
29.2-6 Refund order or adjudication order after SCN and hearing 
 
Where the proper officer is satisfied that the amount refundable under rule 4(1) or 4(2) is payable to the 
applicant under section 48(8), he shall make an order in form GST RFD-06 and issue a payment advice in 
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CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 29 - Refund i n GST 
 
 
 
 
 
CHAPTER 29 
 
Refund in GST 
EXECUTIVE SUMMARY 
?   Claiming refund of any tax and interest paid on such tax or any other amount paid by him, may make 
an application in that regard to the proper officer of before the expiry of two years from the relevant 
date . 
?   Relevant date is broadly as follows - (a) export of goods and supplies to SEZ - date of export (b) 
deemed  export -  date of return (c) export of services  -  date of receipt of payment  in foreign 
exchange (d) refund of unutilized input tax credit - the end of the financial year in which such claim 
for ref und arises. 
?   Refund  (except  in case  of exports  and  supplies  to  SEZ)  will be  subject  to  doctrine  of unjust 
enrichment, i.e. refund only if burden of tax has not been passed to another person. 
?   Amount claimed as refund should be shown as 'amount receivable' in the balance sheet. 
?   If tax amount is refunded by cheque or credit note to recipient, there cannot be unjust enrichment. 
?   Refund of unutilized input tax credit only in case of (a) exports and supplies to SEZ or (b) in cases 
where the credit has accumulated on account of rate of tax on inputs being hi gher than the rate of tax 
on output supplies (i nverted tax structure) but not in case of fully  exempt goods or services. 
?   In case of exports and supplies to SEZ (zero rated supply) refund will be on ratio basis as per 
formula given in Refund Rules. 
?   Refund is also permissible in case of deemed exports. The refund application has to be f iled by 
recipient of supplies. 
?   Claim for ref und of unutilized input should contain details as specified in Annex 1. 
?   IGST paid on any supply of goods to outbound tourist shall be refunded. 
?   Refund application should be f iled electronica ly in form GST RED-1 with specified documents and 
details. 
?   Ref und for balance in electronic cash ledger should be made through return. 
?   Deficiencies in refund claim will be intimated in form GST RED 3. 
?   If ref und is to be rejected, opportunity of personal hearing shall be given 
29.1 Refund of tax and interest 
 
Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, 
may make an application in that regard to the proper officer of IGST/CGST/SGST/UTGST before the expiry 
of two years from the relevant date in prescribe form and manner - section 54(1) of CGST Act. 
Present limit in excise and service tax is one year. 
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CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
29.1-1 Refund of balance  in Electronic Cash Register 
 
Refund from balance in electronic cash register can be made (presumably without time limit) - proviso  to 
section 54(1) of CGST Act. Money is electronic Cash Register is only deposit. Hence, principle of unjust 
enrichment does not arise. 
29.2 Application and procedure of refund 
 
The application shall be accompanied by - 
 
(a)   Such documentary evidence as may be prescribed to establish that a refund is due to the applicant, 
and 
(b)   Evidence that incidence of duty has not been passed on by him to any other person. However, 
where  the  amount  claimed  as  refund  is  less  than two  lakh rupees,  self declaration  based  on 
documents available with him is sufficient - section 54(4) of CGST Act. 
Scrutiny of refund claim and passing of order - If, on receipt of any such application, the proper officer is 
satisfied  that the  whole  or part of the  amount  claimed  as ref und  is refundable,  he may make  an order 
accordingly and the amount so determined shall be credited to the 'Consumer Welfare Fund', except where 
taxable person proves that he has not passed on burden of tax to another person. 
Time limit for deciding refund claim - The proper officer shall issue the order refusing or accepting refund 
claim within sixty days from the date of receipt of application complete in a l respects - section 54(5) of CGST 
Act. 
[Thus, department can surely find some excuse for not deciding refund claim within 60 days] 
 
No refund  if amount  less than Rs 1,000 - No refund shall be paid to an applicant if the amount is less than 
rupees one thousand - section 54(14) of CGST Act. 
29.2-1 Application for refund of tax, interest, penalty,  fees or any other amount 
 
Any person, except the persons covered by notification issued under section 55 (UN Agencies, Embassies), 
claiming refund of any tax, interest, penalty, fees or any other amount paid by him, may f ile an application in 
form GST RFD-01electronica ly through the Common Portal either directly or through a Facilitation Centre - 
Rule 1(1) of Refund Rules. 
Any claim for refund relating to balance in the electronic cash ledger in accordance with the provisions of 
section 49(6) may also be made through the return furnished for the relevant tax period in form GSTR-3, form 
GSTR-4 or form GSTR-7, as the case may be:- first proviso to Rule 1(1) of Refund Rules. 
In case of export of goods, application for refund shall be f iled only after the export manifest or an export 
report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods - 
second proviso to Rule 1(1) of Refund Rules. 
In respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application 
for refund shall be f iled by the supplier of goods after such goods have been admitted in fu l in the Special 
Economic Zone for authorized operations, as endorsed by the specified officer of the Zone - third proviso to 
Rule 1(1) of Refund Rules. 
In respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application 
for refund shall be f iled by the supplier of services along with such evidence regarding receipt of services for 
authorized operations as endorsed by the specified officer of the Zone - fourth proviso to Rule 1(1) of Refund 
Rules. 
In respect of supplies regarded as deemed exports, the application shall be f iled by the recipient of deemed 
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CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
export supplies- fifth proviso to Rule 1(1) of Refund Rules. 
 
Refund of any amount, after adjusting the tax payable by the applicant out of the advance tax deposited by him 
under section 27 (casual taxable person or non-resident taxable person) at the time of registration, shall be 
claimed either in the last return required to be furnished by him or only after furnishing of the said last return - 
sixth proviso to Rule 1(1) of Refund Rules. 
29.2-2 Documents to be filed with refund claim 
 
The  application  for  refund  under  rule  1(1)  shall be  accompanied  by any of the  fo lowing documentary 
evidences, as applicable, to establish that a refund is due to the applicant: 
 
(a)   the reference number of the order and a copy of the order passed by the proper officer or an 
appe late authority or Appe late Tribunal or court resulting in such refund or reference number of the 
payment of the amount specified in section 107(6) and section 112(8) claimed as refund; 
(b)   a statement containing the number and date of shipping Bills or Bills of export and the number 
and date of relevant export i nvoices, in a case where the refund is on account of export of goods; 
(c)   a statement containing the number and date of i nvoices and the relevant Bank Realization Certificates 
or Foreign Inward Remittance Certificates, as the case may be, in a case where the ref und is on 
account of export of services; 
(d)   a statement containing the number and date of invoices as prescribed in rule Invoice 1 along with the 
evidence regarding endorsement specified in the third proviso to sub-rule (1) in case of supply of 
goods made to a Special Economic Zone unit or a Special Economic Zone developer; 
(e)   a  statement  containing  the  number  and  date  of i nvoices,  the  evidence  regarding  endorsement 
specified in the fourth proviso to sub-rule (1) and the details of payment, along with proof thereof, 
made  by the  recipient  to  the  supplier  for  authorized  operations  as  defined  under  the  Special 
Economic Zone Act, 2005, in a case where the refund is on account of supply of services made to a 
Special Economic Zone unit or a Special Economic Zone developer; 
(f)  a statement containing the number and date of invoices along with such other evidence as may be 
notified in this behalf, in a case where the refund is on account of deemed exports. 
(g)   a statement in Annex 1 of form GST RFD-01containing the number and date of invoices received 
and issued during a tax period in a case where the claim pertains to refund of any unutilized input tax 
credit under section 54(3) 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; 
(h)   the reference number of the final assessment order and a copy of the said order in a case where the 
refund arises on account of finalisation of provisional assessment; 
(i)   a declaration 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 does not 
exceed two lakh rupees. However, a declaration is not required to be furnished in respect of cases 
covered under sections 54(8)(a), 54(8)(b), 54(8)(c) or 54(8)(d) of CGST Act. 
(j)   a  Certificate  in Annex  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: However, a declaration is not required to be furnished in respect of cases covered 
under sections 54(8)(a), 54(8)(b), 54(8)(c) or 54(8)(d) of CGST Act. 
Meaning  of invoice where service not provided - For purpose of section 54(8)(c) of CGST Act, "invoice" 
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CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
means invoice conforming to the provisions contained in section 31 [This covers cases where service has not 
been provided and invoice either not issued or refund voucher issued. This covers cases where advance was 
received but service was not provided].- Explanation 1 to rule 1(2) of Refund Rules. 
If tax was recovered, it means duty incidence  has been passed on - where the amount of tax has been 
recovered from the recipient, it shall be deemed that the incidence of tax has been passed on to the ultimate 
consumer [indeed obvious] 
29.2-3 Procedure after submitting refund application 
 
Where the application relates to a claim for refund from the electronic cash ledger, an acknowledgement in 
form GST RFD-02 shall be made available to the applicant through the Common Portal electronica ly, clearly 
indicating the date of filing of the claim - Rule 2(1) of Refund Rules. 
The application for refund, other than claim for refund from electronic cash ledger, shall be forwarded to the 
proper officer who sha l, within fifteen days of filing of the said application, scrutinize the application for its 
completeness and where the application is found to be complete in terms of sub-rule (2), (3) and (4) of rule 1, 
an acknowledgement  in form GST RFD-02 shall be made available to the applicant through the Common 
Portal electronica ly, clearly indicating the date of f iling of the claim for refund. - Rule 2(2) of Refund Rules. 
Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in 
form GST RFD-03 through the Common Portal electronica ly, requiring him to f ile a refund application after 
rectification of such deficiencies - Rule2(3) of Refund Rules. 
Where deficiencies have been communicated in form GST RFD-03under the SGST Rules, the same shall also 
deemed to have been communicated under this Rule along with deficiencies communicated under rule 2(3) - 
Rule 2(4) of Refund Rules [and vice versa] 
29.2-4 Order sanctioning refund 
 
If, upon examination of the application, the proper officer is satisfied that a refund under section 54(3) is due 
and payable to the applicant, he shall make an order in form GST RFD- 06, sanctioning the amount of refund 
to which the applicant is entitled, mentioning therein the amount, if any, refunded to him on a provisional basis 
under section 54(6) of CGST Act, amount adjusted against any outstanding demand under the Act or under 
any existing law and the balance amount refundable - Rule 4(1) of Ref und Rules. 
In cases where the amount of refund is completely adjusted against any outstanding demand under the Act or 
under any existing law, an order giving details of the adjustment may be issued in form GST RFD-07. 
29.2-5 Show Cause  Notice if whole or part of refund is not admissible 
 
If the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the amount 
claimed as refund is not admissible or is not payable to the applicant, he shall issue a notice in form GST RFD- 
08 to the applicant, requiring him to furnish a reply in form GST RFD-09 within fifteen days of the receipt of 
such notice and after considering the reply, make an order in form GST RFD-06, sanctioning the amount of 
refund in whole or part, or rejecting the said refund claim and the said order shall be made available to the 
applicant electronica ly and the provision of rule 4(1) sha l, mutatis mutandis, apply to the extent refund is 
a lowed - Rule 4(2) of Refund Rules. 
No application for refund shall be rejected without giving the applicant a reasonable opportunity of being 
heard. 
29.2-6 Refund order or adjudication order after SCN and hearing 
 
Where the proper officer is satisfied that the amount refundable under rule 4(1) or 4(2) is payable to the 
applicant under section 48(8), he shall make an order in form GST RFD-06 and issue a payment advice in 
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CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
form GST RFD-05, for the amount of refund and the same shall be electronica ly credited to any of the bank 
accounts of the applicant mentioned in his registration particulars and as specified in the application for ref und - 
Rule 4(3) of Refund Rules. 
Where the proper officer is satisfied that the amount refundable under rule 4(1) or sub-rule 4(2) is not payable 
to the applicant under section 54(8) [unjust enrichment], he shall make an order in form GST RFD-06 and 
issue an advice in form GST RFD-05, for the amount of refund to be credited to the Consumer Welfare Fund 
- Rule 4(4) of Refund Rules. 
 
29.2-7 Credit of the amount of rejected refund claim 
 
Where any deficiencies have been communicated under rule 2(3), the amount debited under rule 1(3) shall be 
re-credited to the electronic credit ledger - Rule 5(1) of Refund Rules. 
Where any amount claimed as refund is rejected under rule 4, either fully  or partly, the amount debited, to the 
extent of rejection, shall be re-credited to the electronic credit ledger by an order made in form GST PMT-03 
- Rule 5(2) of Refund Rules. 
 
For the purposes of this rule, a refund shall be deemed to be rejected, if the appeal is finally rejected or if the 
claimant gives an undertaking in writing to the proper officer that he shall not f ile an appeal. 
29.2-8 Order sanctioning interest on delayed refunds 
 
Where any interest is due and payable to the applicant under section 56, the proper officer shall make an 
order along with a payment advice in form GST RFD-05, specifying therein the amount of refund which is 
delayed, the period of delay for which interest is payable and the amount of interest payable, and such amount 
of interest shall be electronica ly credited  to any of the bank accounts  of the applicant  mentioned  in his 
registration particulars and as specified in the application for refund - Rule 6 of Refund Rules. 
29.3 Withholding of refund or deduction from refund in certain cases 
 
If taxable person has defaulted in furnishing of return or payment of taxes or if any tax, interest or penalty is 
payable by him under GST Act or earlier tax laws (excise, service tax, State Vat etc.), those dues can be 
adjusted from refund payable to taxable person and only balance amount should be paid to him. 
Where any refund is due under sub-section (3) to a registered person who has defaulted in furnishing any 
return or who is required to pay any tax, interest or penalty, which has not been stayed by any court, Tribunal 
or Appe late Authority by the specified date (i.e. last date for filing an appeal under CGST Act), the proper 
officer may—(a) withhold payment of refund due until the said person has furnished the return or paid the tax, 
interest or penalty, as the case may be (b) deduct from the refund due, any tax, interest, penalty, fee or any 
other amount which the taxable person is liable to pay but which remains unpaid under this Act or under earlier 
tax laws - section 54(10) of CGST Act. 
If appeal has been f iled and pre-deposit as required is paid, then refund cannot be withheld. 
 
29.3-1 Withholding refund by order by Commissioner, if matter is in appeal 
 
If an order giving rise to a refund is the subject matter of an appeal or further proceeding or where any other 
proceeding under this Act is pending and the Commissioner is of the opinion that 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, after giving the taxpayer an opportunity of being heard, withhold the refund ti l such time as 
he may determine - section 54(11) of CGST Act. 
Where a refund is withheld under section 54(11), the taxable person shall be entitled to interest at rate not 
exceeding 6% as may be notified on recommendation of GST Council, if as a result of the appeal or further 
proceeding he becomes entitled to refund - section 54(12) of CGST Act.