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GST Refund on account of ITC accumulated due to Inverted Tax Structure : FAQ

1. What is Inverted Tax Structure in the GST regime

The term Inverted Tax Structure refers to a situation where the rate of tax on inputs is more than the rate of tax on output supplies. As a result, the higher tax paid on inputs gets accumulated in the Electronic Credit Ledger of the taxpayer. The taxpayer can claim the refund of ITC accumulated on account of Inverted Tax structure by filing the refund application form RFD 01A.

2. What is needed to file for refund of accumulated ITC of IGST / CGST / SGST on account of Inverted Tax Structure

You can file for refund of IGST / CGST / SGST on account of ITC accumulated due to Inverted Tax Structure, if you have filed Form GSTR1 and GSTR-3B of the relevant tax period, for which refund is to be claimed.

3. Is there any time limit to file for refund of ITC accumulated due to Inverted Tax Structure

Yes, the refund application in form RFD 01A needs to be filed within 2 years from the due date for furnishing of return for the period in which such claim for refund arises.

4. What are the relied upon documents which I have to upload with refund application of ITC accumulated due to Inverted Tax Structure

You have to upload documents as are required to be filed along with Form RFD 01A, as notified under CGST Rules or Circulars issued in the matter and other such documents the refund sanctioning authority may require. Statement 1A need to be uploaded mandatorily with the details of inward and outward invoices for which refund is to be claimed. Taxpayers have an option to upload upto 4 supporting documents with the refund application, of size up to 5MB each.

5. To whom should I file my refund application with

The taxpayer shall file the refund application in Form RFD 01A on GST portal. Taxpayer shall choose ground of refund as Refund on account of ITC accumulated due to Inverted Tax Structure for claiming refund. After filing, refund application shall be assigned to Refund Processing Officer for refund processing and refund applicant can track the status of refund application.

6. Can I file for multiple tax period in one refund application

Yes, you can file for refund for multiple tax period in one refund application. E.g. If taxpayer wants to claim refund of Apr 2018, May 2018 and June 2018, then taxpayer can choose the period from Apr 2018 to June 2018 and file a single refund application.

7. Can I file nil refund for multiple tax period in one refund application

Yes, you can file for nil refund for multiple tax period in one refund application. E.g. If taxpayer doesnt has any claim of refund of Apr 2018, May 2018 and June 2018 as he doesn’t have any supply or purchase invoices for this period, then taxpayer can choose the period from Apr 2018 to June 2018 and file a nil refund application for that period. After filing no refund application, taxpayer wont be able to file refund application for that period in future.

8. Can nil period of refund be combined with the period in which there is refund in one application

Yes, nil period of refund can be combined with the period in which there is refund in one application.

Let us suppose you want to file tax refund from Apr-Sep month, where you want to file nil refund for May-Jun month. There are two ways in which you can file your refund application.

a. You can select Tax Period as Apr-Apr and file normal refund application. You can then select May-Jun and file Nil refund application. And, then select Jul-Sep and file normal refund application.

b. You can select Tax Period as Apr-Sep and file normal refund application.

However, if the taxpayer has made any purchase(s) in a tax period and claimed input tax credit (ITC) on them, he need to file refund application including that period. Only then the credit availed in that tax period will get added to the net ITC availed in the whole period (based on which the max refund amount is computed).

9. Can I save the application for refund

Application for refund can be saved at any stage of completion for a maximum time period of 15 days from the date of creation of refund application. If the same is not filed within 15 days, the saved draft will be purged from the GST database. Note: To view your saved application, navigate to Services > Refunds > My Saved/Filed Applications option.

10. Whether I would be able to file refund application without uploading statement of invoices

No. Statement 1A for details of inward and outward invoices is mandatory for filing refund application.

The statement uploaded by taxpayer would be validated with the data already declared by the taxpayer while filing Form GSTR-1 for outward supplies and details of inward supplies would be validated from suppliers database. Only after this data is validated, the taxpayer would be able to file the refund application.

11. From where can I download the utility to upload the statement

Offline utility can be downloaded from the refund application page itself. Navigate to Services > Refunds > Application for Refund > Select the refund type as Refund on account of ITC accumulated due to Inverted Tax Structure > Refund Application > Download Offline Utility link.

12. What is the purpose of Download Offline Utility to upload the statement

Download Offline Utility (Statement 1A) is provided to enter and upload details of inward and outward invoices for which refund is being claimed.

13. What is the significance of VALIDATE STATEMENT button

Validate Statement button is used to validate invoice data provided by the taxpayer. The details of outward invoices would be validated from the details provided by taxpayer while filing GSTR-1 and details of inward supplies would be validated from suppliers database.

14. Can I update/ edit data after clicking the VALIDATE STATEMENT button

Yes, you can update/ edit data even after you have validated the uploaded statement. If you want to update/delete the statement, then you would have to first delete the whole statement by clicking the DELETE STATEMENT button and upload a new statement again if needed.

15. What is the purpose of Download Unique Invoices

To download the invoices that have been uploaded successfully on the GST Portal, you can click on the hyperlink Download Unique Invoices.

16. What is the purpose of Download Invalid Invoices

To download the invoices that have not been uploaded due to some error while uploading invoice details on the GST Portal, you can click on the hyperlink Download Invalid Invoices.

17. I am getting a message “validated with error” while uploading statement on the GST Portal. What do I do

In case any statement is validated with error, click the Download Invalid Invoice link. Open the invalid invoice excel sheet. Error details are displayed. You can rectify the errors details in excel and prepare the JSON file and upload on the GST Portal again by clicking the CLICK HERE TO UPLOAD button.

18. I have uploaded statement which has been validated on the GST Portal. I need to upload a new statement of invoices again. What do I do

If you don’t have any error and statement has been validated, and then you want to update/delete the statement, then you would have to first delete the whole statement by clicking the DELETE STATEMENT button and upload a new statement of invoices again if needed.

19. I need to add new invoices which were not part of earlier invoices but all the earlier invoices are validated. What do I do

In that case, you do not need to delete the earlier uploaded invoices. You need to upload a new statement with new invoice details.

20. Can I preview the refund application before filing

Yes, you can preview the refund application in PDF format to check for any inconsistency or discrepancy before filing on the GST Portal.

21. In which bank account will the refund amount be credited Is it one of the accounts that I registered in GST Portal

Yes, the refund amount will be credited to one of the bank accounts that you have added while filing your registration application on the GST Portal. At the time of filling out form RFD 01A, you will be required to select a bank account from the list of your linked / registered accounts in the GST Portal for crediting refund to that account, from the dropdown available in refund application. In case you want refund in another preferred bank account which is not appearing in the drop down list, you will have to add that bank account by filing amendment of registered (non-core) form. The bank account added by amendment form will get added to the drop-down list.

22. How can I track the status of application for refund

To track your filed application, navigate to Services > Refunds > Track Application Status option.

23. What is ARN

Once the refund application is filed, Application Reference Number (ARN) receipt would be generated and ARN would be sent to your registered e-mail address and mobile number.

24. Where can I download my filed refund application

Navigate to Services > User Services > My Applications link to download your filed refund application.

25. What happens when refund application is filed

GST Portal generates an ARN and displays it in a confirmation message, indicating that the refund application has been successfully filed.

GST Portal sends the ARN to registered e-mail ID and mobile number of the registered taxpayer.

26. Whether there is any ledger entry on filing refund application

On click of “File” button, ARN is generated on filing of the refund application and a debit entry will be made in the Electronic Credit Ledger for the amount claimed as Refund on filing of refund application form.

27. When / how will the refund Form RFD 01A be processed

Once the ARN is generated on filing of refund application in Form RFD 01A, the refund application along with the documents attached while filing the form would be assigned to Refund Processing Officer for processing the refund. Taxpayer can track the status of refund application using track status functionality. The application will be processed and refund will be disbursed by the Jurisdictional Authority after scrutiny.