Filing for a Goods and Services Tax (GST) refund in India is a structured process that allows taxpayers to reclaim excess taxes paid under various circumstances. The most common is the case where the GST-registered person has purchases from India and exporting goods outside India and has GST input for refund.

This complete guide by CA Manish Mishra provides a step-by-step approach to understanding eligibility, preparing necessary documentation, and the refund application process effectively.

GST Refunds

A GST refund arises when the tax paid exceeds the tax liability. Common scenarios include:

- Exports (Zero-Rated Supplies): Exports are zero-rated under GST, allowing exporters to claim refunds on taxes paid for inputs.

 - Inverted Duty Structure: Occurs when the tax rate on inputs surpasses that on outputs, leading to accumulated Input Tax Credit (ITC).

 - Excess Tax Payment: Mistaken or inadvertent overpayment of GST.

 - Finalization of Provisional Assessment: Adjustments post provisional tax assessments.

Eligibility Criteria

To be eligible for a GST refund, ensure the following:

- Timely Filing: Submit the refund application within two years from the relevant date, which varies based on the refund scenario.

 - Complete Documentation: Maintain all necessary documents to substantiate the refund claim.

Step-by-Step Guide to Filing GST Refund

Step 1: Access the GST Portal

- Visit the official GST portal: www.gst.gov.in.

 - Log in with your credentials.

Step 2: Refund Application

- Go to the Services tab.

 - Select Refunds > Application for Refund.

Step 3: Select the Appropriate Refund Type

• Choose the refund category that matches your situation, such as:

  • Excess balance in Electronic Cash Ledger

  • Export of Goods/Services – With/Without payment of tax

  • ITC accumulated due to an Inverted Tax Structure

Step 4: Complete the Refund Application (Form GST RFD-01)

- Click on 'Create Refund Application'.

 - Enter the relevant tax period.

 - Provide details as per the selected refund type. For instance:

• For exports without payment of tax, fill in details of export invoices, shipping bills, and relevant dates.

• For inverted duty structure, provide details of input and output supplies.

Step 5: Upload Supporting Documents

• Attach necessary documents, which may include:

  • Export-related documents: Shipping bills, export invoices, Bank Realization Certificates (BRCs).

  • Tax Payment Proofs: Challans, payment receipts.

  • Calculation Statements: Detailed computation of refund amounts.

Step 6: Provide Bank Account Details

• Ensure your bank account is pre-validated on the GST portal.

• Select the account for crediting the refund.

Step 7: Review and Submit the Application

• Verify all entered details and documents.

• Submit the application using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).

• Upon submission, an Application Reference Number (ARN) is generated for tracking purposes.

Step 8: Post-Submission Process

• The tax authority reviews the application.

• If additional information is required, a Deficiency Memo (Form GST RFD-03) is issued.

• Respond to any deficiencies promptly to avoid delays.

Step 9: Refund Sanction

• Upon satisfactory verification, a provisional refund of 90% may be granted to exporters within seven days.

• The final order is issued in Form GST RFD-06, and the refund amount is credited to the specified bank account.

Key Considerations

• Time Limit: Adhere to the two-year filing deadline to prevent forfeiture of the refund claim.

• Documentation: Maintain comprehensive records to substantiate the refund claim.

• Application Status: Monitor the status using the ARN on the GST portal.

• Minimum Refund Amount: Refunds below ₹1,000 are not processed.

Common Reasons for Refund Rejection

• Incomplete Application: Missing or incorrect information can lead to rejection.

• Insufficient Documentation: Lack of necessary supporting documents.

• Non-Compliance: Failure to meet eligibility criteria or adhere to timelines.

Appeal Process

If a refund claim is rejected, you can file an appeal:

• Submit an appeal in Form GST APL-01 within three months from the date of the rejection order.

• Provide requisite documents and justifications to support your appeal.

GenZCFO Advice

Filing for a GST refund requires meticulous attention to detail, adherence to timelines, and thorough documentation. We at GenZCFO help you by following this step-by-step guide, and with this you as taxpayers can efficiently complete the refund process, ensuring compliance with GST regulations and the timely recovery of excess taxes paid. Feel free to contact us if you have any queries.