Apply for GST Refunds

GST Refunds

GST is all about a smooth flow of funds and compliances till the end. To facilitate such a smooth flow, it is imperative for the Government to provide for a hassle-free refund process. The current tax structure is cumbersome, and it takes months and sometimes years to get refunds from the Government’s kitty.
GST provides for a clearer and efficient invoice based tracking system, verifying the transactions on an individual basis, thus, allowing systematic checking of the same. It comes as a huge relief for manufacturers or exporters, especially those in a 100% EOU or Special Economic Zone, whose working capital gets tied up in this cumbersome refund process.

Events where refund Arises

In case of exports (including deemed exports), where there is a cumulative balance of input credit arising out of such exports or under a claim of rebate.

Where there is an excessive payment of tax due to an inadvertent mistake.

When there is an accumulation of credit resulting due to the output tax being nil or exempted from tax.

Where an appeal is for a respondent, then the amount made as a deposit towards holding such appeal shall be refunded to the appellant

Refund after investigation or findings by an adjudicating officer.

Refund can be provided to foreign embassies or bodies of United Nations when the purchases are made by them.

When there is an accumulation of credit resulting due to the output tax being of a lesser rate than the input.

Suppliers receiving discounts or credits through the issuance of credit notes.

GST paid by foreign or international tourists are subjected to refund.

Refund Application Process Under GST

The refund application has to be made in Form RFD-01 (to be certified by a Chartered Accountant) within a period of 2 years from the
“relevant date.” This relevant date is different for different scenarios.

Point - 1

When the goods are exported through air or sea, then relevant date shall be the date on which such ship or aircraft leaves India.

Point - 2

When the goods are carried by a land vehicle, then relevant date shall be the date when the goods cross the land frontier of the country

Point - 3

When goods are sent through post, then relevant date shall be the date of despatch of goods from the Post Office.

Point - 4

When the supply includes services, and when the same is completed before receipt of payment, then relevant date shall be the payment receipt date.

Point - 5

Similarly, when the services are performed after receipt of an advance, then relevant date shall be the invoice date.

Point - 6

Where refund claim is made for excess input tax credit left unutilised, then relevant date shall be the end of the financial year for which such refund claim is being made.

Point - 7

Where the goods are supplied for deemed exports, i.e. supply to SEZ or 100% EOU, the relevant date shall be the return filing date related to such deemed exports was filed.

Point - 8

Where refund arises due to an order passed in favour of the appellant, then relevant date shall be the date of such order.

Point - 9

Where tax was paid following a provisional assessment and refund now arises, then relevant date shall be date at which such tax was adjusted.

Once the application made, an acknowledgment in Form RFD-02 will be auto-generated for future references and sent across through an email and an SMS. In case the system finds some deficiencies in the refund application, then Form RFD-03 shall be sent to the taxpayer to correct his application.
Moreover, there are certain documents that must be enclosed along with the electronic refund application. Where the refund application is below Rs. 5 lakhs, then a declaration shall be made by the taxpayer indicating that the amount of refund has not been utilized by or transferred to any other person. Where such application exceeds Rs. 5 lakhs, then apart from the declaration above, a document evidencing that the amount was paid by the taxpayer shall also be attached.
When the person filing refund claim is a United Nations’ body, Consulate or a foreign embassy, then the application for refund has to be filed within 90 days from the end of the quarter for which the goods or services were procured. The application should be made in Form RFD-10.

Refund Process

The refund application has to be made in Form RFD-01 (to be certified by a Chartered Accountant) within a period of 2 years from the
“relevant date.” This relevant date is different for different scenarios.

Scrutiny of the refund application

As per norms, it would take about 30 days to process a refund application. Where the refund claim exceeds a prescribed amount, then the same shall be subjected to an audit process. If the same qualifies for a refund, then an order shall be passed to that extent, or if it meets the criterion for being “unjustly enriching” the taxpayer, then the amount shall be transferred to the Consumer Welfare Fund. The above declaration may be required to be certified by a Chartered Accountant.

Refund Order

When the taxpayer claims refund of monies arising out of exports of goods or services, then an authorised officer can issue a provisional refund order in Form RFD-04 of an amount of 90% of the refund claim. Such a provisional refund can be made when the taxpayer:
Has not been prosecuted for evading taxes for an amount exceeding Rs. 250 lakhs over a period of 5 years.
Has a GST compliance rating of more than 5 out of 10.
Has no appeal or review pending with respect to refunds.

Point - 3

Input tax credit left unutilized when the goods or services being supplied are zero rated or exempted from GST.
When input goods or services have a higher rate of tax and the same goods or services have a lesser output tax, then the accumulated input tax credit can be claimed as refund.
In case of a partial reverse charge, where the input tax credit cannot be used completely against the output tax.


You can easily calculate your refund. For instance, if your liability for the month of July is 20,000 but you paid 2 lakh by mistake then you are eligible to claim your 180,000 amount. 

The time limit of claiming amount is 2 years and as per norms after claiming your refund you will get in working 30 days.

The form of the refund application is RFD 01 which you can fill within 2 yearsMake sure your firm should be certified by a chartered accountant.

GST portal provides an option to GST taxpayers to raise a complaint. There is a form available PMT 07.


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