Refund is an essential topic under the GST for any individual who has the eligibility to claim a refund of GST. It is also important for the GST authority who will issue the refund order. Many rules and regulations have been introduced in the process of refund of GST. Refund of GST needs to be done on time as even a slight delay can impact the cash flow and working capital of the manufacturers and exporters.
When Refund of GST Can Be Claimed?
Refund of GST can be allowed in the following circumstances:
- During export of the goods and services.
- If the supplies are made to the SEZ units and developers.
- In case of deemed exports.
- If there is a refund of taxes on any type of purchase by embassies or UN etc.
- Refund made on behalf of decree, judgment or any type of order issued by the Appellate court or Tribunal.
- Finalizing the provisional statement.
- Refund of accumulated ITC.
- If any type of excess payment is made.
- If there is a pre-deposit amount, it will be refunded.
- Refunds made to foreign tourists.
- If a supply is treated as intrastate, the CGST or SGST will be refunded.
What is the Time Limit to File Refund of GST?
- As per the GST Act, the applicant must file for a refund of GST within a time span of 2 years from the relevant date.
- The refund of GST must be sanctioned within 60 days from the date of receipt of the refund claim.
- If the refund amount is withheld the refund shall be made with an interest of 6%.
- If a refund of GST is delayed beyond 60 days the interest rate will be 9%.
Do You Need Certificate from Chartered Accountant for Refund of GST?
- If the refund of GST amount is less than Rs. 2 lakhs, then you must file a self-declaration.
- For refund of GST of amounts exceeding Rs. 2 lakhs, you must attach a certificate from a Chartered Accountant or Cost Accountant along with the required documents.
How to Claim Refund of GST?
The process to claim refund of GST is explained below:
- The application for refund of GST must be submitted electronically in Form RFD 01 within a span of two years from the respective date.
- The applicant must provide the refund of GST application certified by a Chartered Accountant or Cost Accountant if the amount of refund of GST exceeds Rs. 2 lakhs.
- The refund of GST application must undergo an audit or inspection. After getting approval the taxpayer will receive the refund of GST claim in the registered bank account.
What is the Provision of Paying Interests on Delayed Refund of GST?
On delayed refund of GST interests will be paid by the Government in the following ways:
- The interest of 6% after the expiry of 60 days from the date of the application for refund of GST.
- The interest of 9% from the expiry of 90 days from the date of application for refund of GST.
Conclusion
If you have paid any excess GST or have got underutilized ITC, you can claim refund as per Section 54 of the Act. If you want to ensure that your refund amount is not blocked by the Government, you must follow the rules to release the refund amount.
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