Refund under GST and the procedure to claim refund

Refund Under GST

Refunds can be claimed under GST when the taxpayer pays a tax more than he is liable to pay. The process of claiming refund under GST is systemized so that no confusion arises. The whole process of refund is online and they have given some time limit for claiming refund.

When You Can Claim Refund?

There are many reasons why the refund should be claimed. Here we will discuss some of the reason:

If the taxpayer pays an excess amount due to any mistake or omission.

Calculation Of Refund

If any taxpayer let's assume Mr. A has liability of GST for the month of January is Rs. 10,000. Because of some mistake made by him he paid Rs. 1,00,000. Now he has paid an excess amount then he should actually pay, here the excess amount is Rs. 90,000 which he can claim as a refund under GST.

The time limit for claiming this amount is 2 years from when the payment is done.

Time Limit For Claiming The GST Refund

The time limit is 2 years from the relevant date for claiming the refund under GST, and the relevant date will be different in every case, there are many types of cases where relevant date is different here are some of the cases:

• If excess amount has been paid then 2 years from date of payment,
• In case of export or there is deemed export of goods or services then 2 years from date of despatch, or if lodging or passing the frontier,
• In case of ITC is accumulated as output and it is a tax exempt or it is nil rated then 2 years from last date of financial year to which the credit belongs,
• In case of finalisation of provisional assessment then 2 years from date on which tax is being adjusted.

NOTE: If the refund is not given on time to the taxpayer then there will be 24% Interest per annum which will be payable by the government.

How Do You Claim Refund?

For claiming refund under GST you have to file a refund application which will be made in Form RFD 01 which shall be filed within 2 years from the relevant date. The form which shall be filed shall also be certified by a Chartered Accountant.

What is the Procedure For Refund?

1. You have to file Form GST RFD 01 and with that you will have to attach the required documents in Annexure 1.
2. If the above Form has no issue then you will receive an acknowledgement Form GST RFD 02. If in case there are some issues with the Form GST RFD 01 then it will come to your knowledge in Form GST RFD 03.
3. If the Officer is satisfied with your form and you receive the Form GST RFD 02 then he will process the refund within 7 days from the date when you received an acknowledgment.
4. The Officer will have to pass an order of refund in Form GST RFD 06 and then he will give payment advice which will be in Form GST RFD 05 and then the amount will be credited in your account.
5. The order has to be passed within 60 days from when you have received the complete application.

The author Sushant Gangurde is a legal analyst @Taxblock India who aims to educate people about various tax laws and financial planning.