Procedure for filing refund claim by unregistered buyer in case of GST paid on cancelled flat/building/shops etc. from government

UNDERSTANDING OF TIMELINES

UNDERSTANDING OF THE AMOUNT REQUIRED TO BE CLAIMED FROM THE GOVERNMENT

Scenario - 01: Agreement entered and payment received during an FY but the same got cancelled before 31 Oct of the subsequent year

• Builder shall issue a credit note [in terms of Section 34 of CGST Act] and refund the amount of GST to the buyer
• Post issuance of the credit note, the builder shall declare and adjust the same in GST returns

Scenario - 02: Agreement entered and payment received during an FY but the same got cancelled after 31 Oct of the subsequent year

• Builder cannot issue credit note as it shall be considered as time-barred
• Buyer needs to file a refund claim for GST collected from him and paid to the Government

UNDERSTANDING OF THE PROCESS TO BE FOLLOWED TO FILE REFUND CLAIM WITH THE GOVERNMENT BY THE UR BUYER

Temporary Registration [TR]

Requirement for TR:

• PAN
• Bank account details
• Aadhaar authentication (TR shall be obtained in every state in which supplier is located)

Pre-requisite of documents before filing an application

• Details of invoices, GST paid, and the amount received after cancellation in Statement 8 to RFD - 01 Application
• Copy of agreement
• Letter of cancellation of agreement from the builder
• Proof of payment received from the builder against cancellation of the agreement
• Certificate from builder stating that GST collected has been paid to Govt. and he has not adjusted it by way of issuance of the credit note. Further, he has not claimed nor will claim any refund of the GST involved in the invoices issued in respect of the cancelled agreement
• Refund amount cannot exceed the tax in proportion to the amount refunded by the builder

Filling of application in RFD - 01

• Refund applications should be filed supplier/builder-wise. A separate application is required for each builder

Sanction of refund in RFD - 0

• After due verification, the proper officer will sanction the refund claim in Form RFD – 06 with a speaking order

A similar process is prescribed in the said circular in case of refund on account of termination of a long-term insurance policy