GST Refund
There is no uncertainty that for every taxpayer provision related to refunds are always most favorite under any Act and GST Act is no different. In fact, every association designs their business process in such a manner so as to make optimum use of the refund provisions
We are trying to provide the readers the ready reckoner and the significant points that should be kept in mind while filing refund applications incorporating all the important Sections, Rules and Circulars up to 31 March 2020 with the help of this article.
For the sake of easy understanding, we shall be discussing the refund provisions in the following manner:
- Points to be considered while filing refund applications
- Procedure of filing refund application
- Types of refund
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POINTS TO BE CONSIDERED WHILE FILING GST REFUND APPLICATIONS
- Refund can only be filed electronically. Manual Application can be allowed to be filed by the authorities only in exceptional circumstances
- The refund may be filed for a tax period or by clubbing successive tax period, which may spread across different financial years also
- Many times the ITC on inward supplies is spread in multiple months while the Zero Rated supplies or inverted duty supplies are done in few months, in these circumstances the period of refund should be selected the maximum to guarantee higher amount of refunds
- Refund can be obtained for tax and interest, if any, before the expiry of two years from the significant date. Significant date is specified against every refund case given below
- Refund shall not be paid to the applicant if the amount is less than Rs.1, 000. This amount shall be applied for each tax head independently and not cumulatively
- The refund allowed may be adjusted with any tax or other outstanding from the applicant
- If the date of credit of refund in the bank account of the applicant exceeds 60 days from the date of generation of ARN, then the applicant shall be eligible for interest @6% for the number of days beyond such 60 days till the actual date of credit of refund in the bank
- In the cases where refund of Input Tax Credit is involved, i.e. type (a), (c) and (e) given below.
- Refunds can be filed chronologically, i.e. once a refund is submitted for any tax period, subsequent refund application for previous period shall not be allowed
- Refund of only that ITC shall be allowed which is appearing in Form GSTR-2A of the applicant. This guideline given in Circular is against the eligibility of ITC as given in Act and Rules and is subject to litigation
- Transitional Credit cannot be treated as part of Net ITC and hence no refund allowed
- In the refund of tax falling under type (i) to (l) given below, the refund shall be allowed to the applicant in the same proportion in which original payment was made, i.e. where the tax to be refunded has been paid by Credit as well as Cash ledger, the refund to be paid in credit ledger and cash (i.e. Bank Account) shall be in the same proportion in which they were debited during the relevant period
- The complete refund is processed for all heads of tax, i.e. IGST, CGST, SGST and cess by the same jurisdictional officer to whom the refund application is forwarded by the portal
- In the case of refund on account of export of goods with payment of tax, the shipping bill filed by an exporter is deemed to be an application for refund along with details filled in GSTR-1 and GSTR-3B, hence the same is not discussed below
PROCEDURE OF FILING GST REFUND APPLICATION
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GST Refund FAQ's
A Goods and Services Tax (GST) certificate is a document issued by the Indian government that certifies that a business is registered with the Goods and Services Tax (GST) system. It is a unique identification number that is used to identify a business for taxation purposes in India.
Any business that is registered for GST with the Indian government must have a GST certificate. This applies to both online and offline businesses.
Yes, in India, businesses must obtain a GST certificate in order to be registered for GST. Without a GST certificate, businesses will not be able to charge GST on the goods and services they sell.
Businesses with an annual turnover of more than Rs. 40 lakhs are required to register for GST. However, this limit is lower for businesses in certain special category states, such as Arunachal Pradesh, Manipur, and Nagaland. Also, there are different rules for businesses involved in e-commerce, which may have to register for GST regardless of their turnover.
No, only persons registered under GST are allowed to collect GST from the customers. A person not registered under GST cannot even claim the input tax credit on the GST paid.
An E-way bill is an electronic document which serves as an evidence to the movement of goods having a value of more than Rs. 50,000. It available to a supplier or an individual transporting goods. It has two components; Part A, with details such a GSTIN of the supplier and recipient, place of delivery, value of goods, HSN code, reason for transportation and part B, with details of the vehicle and transport documents.
It is a wholly digital interface that eliminates the need for state boundary checks. It will facilitate faster movement of goods and improve the turnaround time of trucks thus reducing costs for the supplier.