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Refund is a very important term under the GST for the person who is eligible to claim the refund and for the gst authority who issues the refund order.Both persons i.e. who claim the refund and who issues refund should have fully conversant with the provisions and law in regard of Refund under the GST. 

Any person  claiming refund of any Tax, Interest or any other amount (penalty) may make an application before the expiry of 2 years from the relevant date in prescribed manner.

Some important Facts

• Refunds can take place in case of Excess Tax paid, Wrong Tax paid, refund order under appeal.

• Refunds can be claimed by both Registered and Unregistered persons .

• Refund can be availed/ claimed of Input and Output Tax.

• Refund Application GST RFD 01 form shall be filed.

• If the Refund application amount not exceeding 2 lakhs then there is no requirement of CA/CMA notification.

• If refund order is less than Rs 1000(under each Act i.e CGST and SGST) then refund is not applicable except in case of refund from e cash ledger.

ALLOWABLE REFUNDS

• Refund of Unutilized ITC on account of Export without payment of tax.

• Refund of Unutilized ITC on account of supplies made to SEZ unit /Developer without payment of tax.

• Refund of Unutilized ITC on account of accumulation due to inverted tax structure.

• Refund to supplier of tax paid on deemed export supplies.

• Refund to recipient of tax paid on deemed export supplies.

• Refund of excess balance in electronic cash ledger.

• Refund of excess payment of tax.

• Refund of tax paid on intra state supply which is subsequently held to be inter state supply and vice versa.

• Refund on account of assessment/ appeal/ any other order.

• Refund as per section 54(2) of the CGST Act, of tax paid on inward supplies of goods and services or both by UNO etc notified under section 55.

How to calculate GST Refund?

Let's take a simple example of excess tax payment made Mr.B’s GST liability for the month of March is Rs 50,000. But due to a mistake, Mr. B made a GST Payment of Rs 5 lakh.Now Mr B has made an excess GST payment of Rs 4.5 lakh which can be claimed as a refund by him. The time limit for claiming the refund is 2 years from the date of payment.

Non Payment of Refund (exception)

• No Refund of Unutilized ITC shall be allowed in cases where the goods exported out of India are subjected to export duty.

• No Refund of Unutilized ITC shall be allowed in cases where the supplier of goods and services has not filed any GST Returns i.e GSTR 1 and GSTR 3B.

• No Refund of ITC shall be allowed if the supplier of goods and services avails any drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.

• Defaulted in furnishing any returns.

• Defaulted in payment of any tax, interest , penalty

RBG Consultant Inc blog on Refund of GST