What is Refunds of fees under GST

Refunds of fees under GST


This post explains about Refunds of fees under GST. 

Refunds of fees under GST:

The refunds under Central excise and service tax laws take long time. However, in GST Regime, refunds are expected to be processed faster with 90%   of the total refund amount being available on submission of proper documents.

Refund of Tax

Any person claiming refund of any tax and interest, if any, paid on such tax or Refund of tax. any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be   prescribed:

Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed.

A specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and  Immunities) Act, 1947, Consulate or  Embassy of foreign countries or  any other person  or class of persons, as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund,    in such form and manner as  may be  prescribed, before the expiry of  six months from the last day of the quarter in which such supply was  received.

Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period:

Provided that no refund of unutilised input tax credit shall be allowed in cases other than––

         i.            zero rated supplies made without payment of tax;

       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), except supplies of goods or services or both as may be notified by the Government on the recommendations of the  Council:

Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:

Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.

The application shall be accompanied by—

         i.            such documentary evidence as may be prescribed to establish that  a  refund is due to the applicant; and

                    ii.                       such documentary or other evidence (including the documents referred to in section 33) as the applicant may furnish to establish that the amount of tax and interest,  if  any,  paid on  such tax  or  any  other  amount paid in  relation to which

     iii.            such refund is claimed was collected from, or paid by, him and the incidence of such tax and interest had not been passed on to any other  person:

Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be necessary for the applicant to furnish any documentary and other evidences but he may file a declaration, based on the documentary or other evidences available with him, certifying that the incidence of such tax and interest had not been passed on to any other person.

If, on receipt of any such application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and  the amount so determined shall be credited to the Fund referred to in section   57.

Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and  subject to  such conditions, limitations and safeguards as may be prescribed and thereafter make an  order under sub-section (5) for final settlement of the refund claim after due verification  of documents furnished by the applicant.

The proper officer shall issue the order under sub-section (5) within sixty days from the date of receipt of application complete in all respects.

Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to—

  1. refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated  supplies;
  2. refund of unutilised input tax credit under sub-section  (3);
  3. refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has  been issued;
  4. refund of tax in pursuance of section  77;
  5. (e)          the tax and interest, if any, or any other amount paid by the applicant, if he 5 had not passed on the incidence of such tax and interest to any other person;   or
  6. the tax or interest borne by such other class of applicants as the Government may, on the recommendations of the Council, by notification, specify.

Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provisions of this Act or

the rules made thereunder or in any other law for the time being in force, no refund shall be made except in accordance with the provisions of sub-section (8).

Where any refund is due under sub-section (3) to a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which has not been stayed by any court, Tribunal or Appellate Authority by the specified date, the proper officer may—

  1. withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may  be;
  2. deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law.

Explanation - For the purposes of this sub-section, the expression “specified date” shall mean the last date for filing an appeal under this Act.

Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine.

Where a refund is withheld under sub-section (11), the taxable person shall, notwithstanding anything contained in section 56, be entitled to interest at such rate not exceeding six per cent. as may be notified on the recommendations of the Council, if as   a result of the appeal or further proceedings he becomes entitled to refund.

Notwithstanding anything to the contrary contained in this section, the amount of advance tax deposited by a casual taxable person or a non-resident taxable person under sub-section (2) of section 27, shall not be refunded unless such person has, in respect of the entire period for which the certificate of registration granted to him had remained in force, furnished all the returns required under section 39.

Notwithstanding anything contained in this section, no refund under sub-section (5) or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees.

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Officers to assist proper officers, Sec 72 of CGST Act, 2017           

Inspection of goods in movement, Sec 68 of CGST Act, 2017

Section 67 of CGST Act, 2017 Power of inspection, search and seizure    

Section 20 of IGST Act,2017 Application of provisions      

Tax wrongfully collected and paid to Central Government or State Government, IGST Act,2017 

Zero rated supply, section 16 of IGST Act,2017   

section 14 of IGST Act,2017, Special provision for payment of tax by a supplier                                            

Section 59 of CGST Act, 2017 Self-assessment    

Consumer Welfare Fund, Section 57 of CGST Act, 2017  

Refund of tax, Sec 54 of CGST Act, 2017

Transfer of input tax credit, Section 53 of CGST Act, 2017              

Tax deduction at source, Sec 51 of CGST Act, 2017           

Interest on delayed payment of tax, Section 50 of CGST Act, 2017            

Power to grant exemption from tax under section 6 of IGST Act,2017

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