Deepak Gupta | Jan 17, 2019 |
GST Refunds under Goods & Service Tax Act 2017
Refund as discussed in section 54 of the CGST/SGST Act includes:
(a) any balance amount in the electronic cash ledger so claimed in the returns,
(b) any unutilized input tax credit in respect of :
(i) zero rated supplies made without payment of tax or,
(ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies),
(c) tax paid by specialized agency of United Nations or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries on any inward supply.
Through this article lets discuss various provisions of GST Refunds under Goods & Service Tax Act 2017.
Unutilized input tax credit can be given in respect of :
(i) zero rated supplies made without payment of tax or,
(ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies),
1.) Refund of unutilized input tax credit is not allowed in cases where the goods exported out of India are subjected to export duty
2.) Refund of accumulated ITC will not be admissible for construction services.
3.) Refund will also not be admissible where credit accumulation due to inverted tax structure is in respect of the following goods:
Sr. No. | Tariff item, heading, sub heading or Chapter | Description of Goods |
1 | 5007 | Woven fabrics of silk or of silk waste |
2 | 5111 to 5113 | Woven fabrics of wool or of animal hair |
3 | 5208 to 5212 | Woven fabrics of cotton |
4 | 5309 to 5311 | Woven fabrics of other vegetable textile fibres, paper yarn |
5 | 5407, 5408 | Woven fabrics of manmade textile materials |
6 | 5512 to 5516 | Woven fabrics of manmade staple fibres |
6A | 5608 | Knotted netting of twine, cordage or rope; made up fishing nets and other made up nets, of textile materials |
6B | 5801 | Corduroy fabrics |
6C | 5806 | Narrow woven fabrics, other than goods of heading 5807; narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs) |
7 | 60 | Knitted or crocheted fabrics [All goods] |
8 | 8601 | Rail locomotives powered from an external source of electricity or by electric accumulators |
9 | 8602 | Other rail locomotives; locomotive tenders; such as Diesel-electric locomotives, Steam locomotives and tenders thereof |
10 | 8603 | Self-propelled railway or tramway coaches, vans and trucks, other than those of heading 8604 |
11 | 8604 | Railway or tramway maintenance or service vehicles, whether or not self- propelled (for example, workshops, cranes, ballast tampers, trackliners, testing coaches and track inspection vehicles) |
12 | 8605 | Railway or tramway passenger coaches, not self-propelled; luggage vans, post office coaches and other special purpose railway or tramway coaches, not self-propelled (excluding those of heading 8604) |
13 | 8606 | Railway or tramway goods vans and wagons, not self-propelled |
14 | 8607 | Parts of railway or tramway locomotives or rolling-stock; such as Bogies, bissel-bogies, axles and wheels, and parts thereof |
15 | 8608 | Railway or tramway track fixtures and fittings; mechanical (including electro- mechanical) signalling, safety or traffic control equipment for railways, tramways, roads, inland waterways, parking facilities, port installations or airfields; parts of the foregoing |
A person claiming refund is required to file an application before the expiry of two years from the relevant date as given in the Explanation to section 54 of the CGST/SGST Act.
| Export of Goods | The date on which the Goods Leave India |
| Deemed Exports | The date on which the return relating to such deemed exports is furnished |
| Export of Services | Date of (i) receipt of payment in convertible foreign exchange, where the or (ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice; |
| Where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, | the date of communication of such judgment, decree, order or direction |
| In case of refund of unutilised input tax credit | the end of the financial year in which such claim for refund arises |
| In any other case | the date of payment of tax |
Refund has to be sanctioned within 60 days from the date of receipt of application complete in all respects. If refund is not sanctioned within the said period of 60 days, interest at the rate notified not exceeding 6% will have to be paid in accordance with section 56 of the CGST/SGST Act.
Every claim of refund has to be filed in Form GST RFD 1. However, claim of refund of balance in electronic cash ledger can be claimed through furnishing of monthly/quarterly returns in Form GSTR 3, GSTR 4 or GSTR 7, as the case may be, of the relevant period.
Circular No.17/17/2017-GST dated 15.11.2017 has been issued clarifying the procedure for filing of manual refund claims. The circular mandates that due to the non-availability of the refund module on the common portal, it has been decided by the competent authority, on the recommendations of the Council, that the applications/documents/forms pertaining to refund claims on account of zero-rated supplies shall be filed and processed manually till further orders.
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. In no event shall I shall be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.
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