GST Refund

by | Sep 3, 2021 | Uncategorized

GST Refunds

KORAH AND KORAH, CHARTERED ACCOUNTANTS

 

What we will discuss?
  • Brushing up of the refund provisions
  • Requirements for filing a Refund Application
  • Practical scenario using a Show-Cause Notice
    • (Limiting the scope of our discussion to only Zero-Rated Supplies of Goods / Services / Both!)
S.54 ➞ R.89 ➞97 (CGST ACT)

Starting with S. 49(9) – you have to prove that you have not passed the burden of GST to get refund

Refund of ?

  • IGST on Exports
  • Unutilized ITC – 0 Rated & Inverted Duty Structure
  • Balance in E Cash Ledger
  • Excess Payment due to a Mistake
  • Others

 

Refund of tax in case of Zero-Rated Supplies
Time Limits (“Relevant Date”)

Explanation under S. 54(14)

Zero-Rated Supplies on payment of IGSTZero-Rated Supplies under LUT

Goods

  • Sea / Air – when it leaves India
  • Land – custom frontiers
  • Post – dispatch

Goods & Services

  • Due-date for furnishing GSTR 3B for the month in which such refund claim
    arises 2 YEARS from the relevant
    date

Services

  • If Advance – date of invoice
  • If receipt later – date of receipt
 
Amount of Refund Claim
Refund Amount in case of Zero-Rated Supplies under LUT (Net ITC)
Breaking up the Formula
Adjusted Total Turnover
Procedure in Brief (In Rules)

RFD-01

Refund Application + Documentary Evidence

RFD-02

Acknowledgment (ARN) 15 days from Application

Process

60
Days

RFD-03

Deficiency
Memo

RFD-04

Order for Provisional Refund 7 days from ARN

RFD-06

Final Sanction
Order

RFD-05

Payment order
(earlier “advice”)

RFD-08

SCN – Liable for Rejection
 

RFD-09

Reply to SCN 15days
from SCN

Master Circular 125/44/2019-GST dated 18/11/2019

Application to all refund claims after 26/9/2019

Deficiency Memos
➞RFD-03 also within 15 days
➞Fresh Refund Application
➞2 years from original application

Disbursements
➞Application and Sanction by one authority
➞Disbursed through PFMS to Bank Account
➞Interest @ 6% if not refunded within 60 days

 

 

Provisional Refunds
➞90% of amount claimed
➞RFD-06 before RFD-04

Unutilized ITC
➞Upload copy of GSTR 2A
➞Self-certified purchase invoices not in 2A
➞Rule 36(4) – 5% restriction – taken care by FA’21

 

 

How does the portal calculate maximum refund amount?

Balance in E Credit Ledger at the end of tax period after filing GSTR 3B or;

As per Formula or;

Balance in E Credit Ledger at the time of refund claim

Zero-Rated Supplies
➞Procedural delay in filing LUT
➞No need proof of realization in case of export of goods
➞Terms and Conditions in LUT

If liable to pay GST, then when?
List of Documents Prescribed

Case 1 : Zero-Rated on payment of IGST

Outside IndiaTo SEZ
  • Declaration that no export duty is liable on goods and no duty drawback claimed (+) FIRCs (services
  • Undertaking that all conditions of ITC availment are fulfilled (+) Copy of GSTR 2A*
  • Statement containing details of invoices vis-vis FIRC details* (+) Annexure B (Purchase invoice details)*
  • Self-certified copies of invoices not in GSTR 2A (+) Self-declaration of no offences committed for Provisional Refund
  • Declaration that no export duty is liable on goods and no duty drawback claimed (+) Endorsement from SEZ officer regarding receipt for authorized operations
  • Declaration that tax has not been collected from the SEZ Unit (+) Self-certified copies of invoices not in GSTR 2A
  • Statement containing details of invoices vis-vis receipt details* (+) undertaking that all conditions of ITC availment are fulfilled
  • Self-declation (<2 Lakhs or CA Certification >= 2 Lakhs)

 

Case 2 : Zero-Rated Under LUT

Outside IndiaTo SEZ
  • Declaration that no export duty is liable on goods and no duty drawback claimed (+) Copy of GSTR 2A*
  • Undertaking that all conditions of ITC availment are fulfilled (+) Annexure B (Purchase invoice details)*
  • Statement containing details of invoices vis-vis FIRC details*
  • FIRC Copies (Services) / Shipping Bill (Goods)
  • Declaration that no export duty is liable on goods and no duty drawback claimed (+) Copy of GSTR 2A*
  • Statement containing details of invoices vis-vis receipt details (+) Annexure B (Purchase invoice details)*
  • Self-certified copies of invoices not in GSTR 2A (+) Endorsement from SEZ officer regarding receipt for authorized operations
  • Undertaking that all conditions of ITC availment are fulfilled
  • Self-declation (<2 Lakhs or CA Certification >= 2 Lakhs)

 

Other Issues faced at the time of Refund Application
  • Invoice copies for high value purchases
  • Claim of ITC should match with details in GSTR 2A
  • Turnover mismatch b/w GSTR 1 & 3B
  • Category of refund Vs Invoice Format
  • 2 Years from the Relevant Date
  • Self-Declarations
  • Annexure B – Correct format including column for HSN/SAC
  • Correct address in FIRC Copies
  • Invoice Vs FIRC Details