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Final GST Rules - Refund Rules: EximGuru.com



Chapter
REFUND

1. Application for refund of tax, interest, penalty, fees or any other amount


(1) Any person, except the persons covered by notification issued under section 55, claiming refund
of any tax, interest, penalty, fees or any other amount paid by him, may file an application electronically
in FORM GST RFD-01 through the Common Portal, either directly or through a Facilitation Centre
notified by the Commissioner:
Provided that any claim for refund relating to balance in the electronic cash ledger in accordance
with the provisions of sub-section (6) of section 49 may also be made through the return furnished for the
relevant tax period in FORM GSTR-3 or FORM GSTR-4 or FORM GSTR-7, as the case may be:
Provided further that in case of export of goods, application for refund shall be filed only after the
export manifest or an export report, as the case may be, is delivered under section 41 of the Customs Act,
1962 in respect of such goods:
Provided also that in respect of supplies to a Special Economic Zone unit or a Special Economic
Zone developer, the application for refund shall be filed by the supplier of goods after such goods have
been admitted in full in the Special Economic Zone for authorized operations, as endorsed by the
specified officer of the Zone:
Provided also that in respect of supplies to a Special Economic Zone unit or a Special Economic
Zone developer, the application for refund shall be filed by the supplier of services along with such
evidence regarding receipt of services for authorized operations as endorsed by the specified officer of the
Zone:
Provided also that in respect of supplies regarded as deemed exports, the application shall be filed
by the recipient of deemed export supplies:
Provided also that refund of any amount, after adjusting the tax payable by the applicant out of
the advance tax deposited by him under section 27 at the time of registration, shall be claimed in the last
return required to be furnished by him.
(2) The application under sub-rule (1) shall be accompanied by any of the following documentary
evidences, as applicable, to establish that a refund is due to the applicant:
(a) the reference number of the order and a copy of the order passed by the proper officer or
an appellate authority or Appellate Tribunal or court resulting in such refund or reference number
of the payment of the amount specified in sub-section (6) of section 107 and sub-section (8) of
section 112 claimed as refund;
(b) a statement containing the number and date of shipping bills or bills of export and the
number and date of relevant export invoices, in a case where the refund is on account of export of
goods;
(c) a statement containing the number and date of invoices and the relevant Bank Realization
Certificates or Foreign Inward Remittance Certificates, as the case may be, in a case where the
refund is on account of export of services;
(d) a statement containing the number and date of invoices as prescribed in rule Invoice.1
along with the evidence regarding endorsement specified in the third proviso to sub-rule (1) in
case of supply of goods made to a Special Economic Zone unit or a Special Economic Zone
developer;
(e) a statement containing the number and date of invoices, the evidence regarding
endorsement specified in the fourth proviso to sub-rule (1) and the details of payment, along with
proof thereof, made by the recipient to the supplier for authorized operations as defined under the
Special Economic Zone Act, 2005, in a case where the refund is on account of supply of services
made to a Special Economic Zone unit or a Special Economic Zone developer
(f) a declaration to the effect that the Special Economic Zone unit or the Special Economic Zone
developer has not availed of the input tax credit of the tax paid by the supplier of goods or
services or both, in a case where the refund is on account of supply of goods or services made to a
Special Economic Zone unit or a Special Economic Zone developer;
(g) a statement containing the number and date of invoices along with such other evidence as
may be notified in this behalf, in a case where the refund is on account of deemed exports;
(h) a statement in Annex 1 of FORM GST RFD-01 containing the number and date of
invoices received and issued during a tax period in a case where the claim pertains to refund of
any unutilized input tax credit under sub-section (3) of section 54 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;
(i) the reference number of the final assessment order and a copy of the said order in a case
where the refund arises on account of finalisation of provisional assessment;
(j) a statement showing the details of transactions considered as intra-State supply but which
is subsequently held to be inter-State supply;
(k) a statement showing the details of the amount of claim on account of excess payment of
tax;
(l) a declaration to the effect that the incidence of tax, interest or any other amount claimed
as refund has not been passed on to any other person, in a case where the amount of refund
claimed does not exceed two lakh rupees:
Provided that a declaration is not required to be furnished in respect of cases covered under clause
(a) or clause (b) or clause (c) or clause (d) or clause (f) of sub-section (8) of section 54;
(m) a Certificate in Annex 2 of FORM GST RFD-01 issued by a chartered accountant or a
cost accountant to the effect that the incidence of tax, interest or any other amount claimed as
refund has not been passed on to any other person, in a case where the amount of refund claimed
exceeds two lakh rupees:
Provided that a certificate is not required to be furnished in respect of cases covered under clause
(a) or clause (b) or clause (c) or clause (d) or clause (f) of sub-section (8) of section 54;
Explanation.– For the purposes of this rule,
(i) in case of refunds referred to in clause (c) of sub-section (8) of section 54, “invoice”
means invoice conforming to the provisions contained in section 31 ;
(ii) where the amount of tax has been recovered from the recipient, it shall be deemed that the
incidence of tax has been passed on to the ultimate consumer.
(3) Where the application relates to refund of input tax credit, the electronic credit ledger shall be
debited by the applicant in an amount equal to the refund so claimed.
(4) In case of zero-rated supply of goods or services or both without payment of tax under bond or letter
of undertaking in accordance with the provisions of sub-section (3) of section 16 of the Integrated Goods
and Services Tax Act, refund of input tax credit shall be granted as per the following formula:
Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x
Net ITC ÷ Adjusted Total Turnover

Where,-
(A) "Refund amount" means the maximum refund that is admissible;
(B) "Net ITC" means input tax credit availed on inputs and input services during the relevant period;
(C) "Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during
the relevant period without payment of tax under bond or letter of undertaking;
(D) "Turnover of zero-rated supply of services" means the value of zero-rated supply of services made
without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:-
Zero-rated supply of services is the aggregate of the payments received during the relevant period for
zero-rated supply of services and zero-rated supply of services where supply has been completed for
which payment had been received in advance in any period prior to the relevant period reduced by
advances received for zero-rated supply of services for which the supply of services has not been
completed during the relevant period;
(E) "Adjusted Total turnover" means the turnover in a State or a Union territory, as defined under subsection
(112) of section 2, excluding the value of exempt supplies other than zero-rated supplies, during
the relevant period;
(F) “Relevant period” means the period for which the claim has been filed.
(5) In case of refund on account of inverted duty structure, refund of input tax credit shall be granted
as per the following formula:
Maximum Refund Amount = {(Turnover of inverted rated supply of goods) x Net ITC ÷ Adjusted Total
Turnover} minus tax payable on such inverted rated supply of goods
Explanation: The meaning of the term “Net ITC” and “Adjusted Total turnover” shall have the same
meaning as assigned to them in sub-rule (4).


2. Acknowledgement


(1) Where the application relates to a claim for refund from the electronic cash ledger, an
acknowledgement in FORM GST RFD-02 shall be made available to the applicant through the Common
Portal electronically, clearly indicating the date of filing of the claim for refund and the time period
specified in sub-section (7) of section 54 shall be counted from such date of filing.
(2) The application for refund, other than claim for refund from electronic cash ledger, shall be
forwarded to the proper officer who shall, within fifteen days of filing of the said application, scrutinize
the application for its completeness and where the application is found to be complete in terms of sub-rule
(2), (3) and (4) of rule 1, an acknowledgement in FORM GST RFD-02 shall be made available to the
applicant through the Common Portal electronically, clearly indicating the date of filing of the claim for
refund and the time period specified in sub-section (7) of section 54 shall be counted from such date of
filing.
Provided that where the claim for refund of integrated tax is on account of export of goods, the
acknowledgment shall be issued within a period of three days of filing of such claim.
(3) Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the
applicant in FORM GST RFD-03 through the Common Portal electronically, requiring him to file a
fresh refund application after rectification of such deficiencies.
(4) Where deficiencies have been communicated in FORM GST RFD-03 under the GST Rules of
the State, the same shall also deemed to have been communicated under this Rule along with deficiencies
communicated under sub-rule (3).
[CGST Rules]
(4) Where deficiencies have been communicated in FORM GST RFD-03 under the CGST Rules,
the same shall also deemed to have been communicated under this Rule along with deficiencies
communicated under sub-rule (3).
[SGST Rules]


3. Grant of provisional refund


(1) The provisional refund in accordance with the provisions of sub-section (6) of section 54 shall be
granted subject to the condition that the person claiming refund has, during any period of five years
immediately preceding the tax period to which the claim for refund relates, not been prosecuted for any
offence under the Act or under an existing law where the amount of tax evaded exceeds two hundred and
fifty lakh rupees;
(2) The proper officer, after scrutiny of the claim and the evidence submitted in support thereof and
on being prima facie satisfied that the amount claimed as refund under sub-rule (1) is due to the applicant
in accordance with the provisions of sub-section (6) of section 54, shall make an order in FORM GST
RFD-04, sanctioning the amount of refund due to the said applicant on a provisional basis within a period
not exceeding seven days from the date of acknowledgement under sub-rule (1) or sub-rule (2) of rule 2.
(3) The proper officer shall issue a payment advice in FORM GST RFD-05 for the amount
sanctioned under sub-rule (2) and the same shall be electronically credited to any of the bank accounts of
the applicant mentioned in his registration particulars and as specified in the application for refund.


4. Order sanctioning refund


(1) Where, upon examination of the application, the proper officer is satisfied that a refund under
sub-section (5) of section 54 is due and payable to the applicant, he shall make an order in FORM GST
RFD-06, sanctioning the amount of refund to which the applicant is entitled, mentioning therein the
amount, if any, refunded to him on a provisional basis under sub-section (6) of section 54, amount
adjusted against any outstanding demand under the Act or under any existing law and the balance amount
refundable:
Provided that in cases where the amount of refund is completely adjusted against any outstanding
demand under the Act or under any existing law, an order giving details of the adjustment shall be issued
in Part A of FORM GST RFD-07.
(2) Where the proper officer or the Commissioner is of the opinion that the amount of refund is liable
to be withheld under the provisions of sub-section (10) or, as the case may be, sub-section (11) of section
54, he shall pass an order in Part B of FORM GST RFD-07 informing him the reasons for withholding
of such refund.
(3) Where the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any
part of the amount claimed as refund is not admissible or is not payable to the applicant, he shall issue a
notice in FORM GST RFD-08 to the applicant, requiring him to furnish a reply in FORM GST RFD-09
within fifteen days of the receipt of such notice and after considering the reply, make an order in FORM
GST RFD-06, sanctioning the amount of refund in whole or part, or rejecting the said refund claim and
the said order shall be made available to the applicant electronically and the provision of sub-rule (1)
shall, mutatis mutandis, apply to the extent refund is allowed:
Provided that no application for refund shall be rejected without giving the applicant a reasonable
opportunity of being heard.
(4) Where the proper officer is satisfied that the amount refundable under sub-rule (1) or (2) is
payable to the applicant under sub-section (8) of section 54, he shall make an order in FORM GST RFD-
06 and issue a payment advice in FORM GST RFD-05, for the amount of refund and the same shall be
electronically credited to any of the bank accounts of the applicant mentioned in his registration
particulars and as specified in the application for refund.
(5) Where the proper officer is satisfied that the amount refundable under sub-rule (1) or sub-rule (2)
is not payable to the applicant under sub-section (8) of section 54, he shall make an order in FORM GST
RFD-06 and issue an advice in FORM GST RFD-05, for the amount of refund to be credited to the
Consumer Welfare Fund.


5. Credit of the amount of rejected refund claim


(1) Where any deficiencies have been communicated under sub-rule (3) of rule 2, the amount debited
under sub-rule (3) of rule 1 shall be re-credited to the electronic credit ledger.
(2) Where any amount claimed as refund is rejected under rule 4, either fully or partly, the amount
debited, to the extent of rejection, shall be re-credited to the electronic credit ledger by an order made in
FORM GST PMT-03.
Explanation.– For the purposes of this rule, a refund shall be deemed to be rejected, if the appeal is finally
rejected or if the claimant gives an undertaking in writing to the proper officer that he shall not file an
appeal.


6. Order sanctioning interest on delayed refunds


Where any interest is due and payable to the applicant under section 56, the proper officer shall make an
order along with a payment advice in FORM GST RFD-05, specifying therein the amount of refund
which is delayed, the period of delay for which interest is payable and the amount of interest payable, and
such amount of interest shall be electronically credited to any of the bank accounts of the applicant
mentioned in his registration particulars and as specified in the application for refund.


7. Refund of tax to certain persons


(1) Any person eligible to claim refund of tax paid by him on his inward supplies as per notification
issued section 55 shall apply for refund in FORM GST RFD-10 once in every quarter, electronically on
the Common Portal, either directly or from a Facilitation Centre notified by the Commissioner, along with
a statement of inward supplies of goods or services or both in FORM GSTR-11, prepared on the basis of
statement of outward supplies furnished by corresponding suppliers in FORM GSTR-1.
(2) An acknowledgement for receipt of the application for refund shall be issued in FORM GST
RFD-02.
(3) Refund of tax paid by the applicant shall be available if-
(a) the inward supplies of goods or services or both were received from a registered person
against a tax invoice and the price of the supply covered under a single tax invoice exceeds five
thousand rupees, excluding tax paid, if any;
(b) name and GSTIN or UIN of the applicant is mentioned on the tax invoice; and
(c) such other restrictions or conditions as may be specified in the notification are satisfied.
(4) The provisions of rule 4 shall, mutatis mutandis, apply for the sanction and payment of refund
under this rule.
(5) Where an express provision in a treaty or other international agreement, to which the President or
the Government of India is a party, is inconsistent with the provisions of these rules, such treaty or
international agreement shall prevail.


8. Consumer Welfare Fund


(1) All credits to the Consumer Welfare Fund shall be made under sub-rule (4) of rule 4.
(2) Any amount, having been credited to the Fund, ordered or directed as payable to any claimant by
orders of the proper officer, appellate authority or Appellate Tribunal or court, shall be paid from the
Fund.
(3) Any utilisation of amount from the Consumer Welfare Fund under sub-section (1) of section 58
shall be made by debiting the Consumer Welfare Fund account and crediting the account to which the
amount is transferred for utilisation.
(4) The [Central/State] Government shall, by an order, constitute a Standing Committee with a
Chairman, a Vice-Chairman, a Member Secretary and such other members as it may deem fit and the
Committee shall make recommendations for proper utilisation of the money credited to the Consumer
Welfare Fund for welfare of the consumers.
(5) The Committee shall meet as and when necessary, but not less than once in three months.
(6) Any agency or organisation engaged in consumer welfare activities for a period of three years
registered under the Companies Act, 2013 (18 of 2013) or under any other law for the time being in force,
including village or mandal or samiti level co-operatives of consumers especially Women, Scheduled
Castes and Scheduled Tribes, or any industry as defined in the Industrial Disputes Act, 1947 (14 of 1947)
recommended by the Bureau of Indian Standards to be engaged for a period of five years in viable and
useful research activity which has made, or is likely to make, significant contribution in formulation of
standard mark of the products of mass consumption, the Central Government or the State Government
may make an application for a grant from the Consumer Welfare Fund:
Provided that a consumer may make application for reimbursement of legal expenses incurred by him as a
complainant in a consumer dispute, after its final adjudication.
(7) All applications for grant from the Consumer Welfare Fund shall be made by the applicant
Member Secretary, but the Committee shall not consider an application, unless it has been inquired into in
material details and recommended for consideration accordingly, by the Member Secretary.
(8) The Committee shall have powers -
(a) to require any applicant to produce before it, or before a duly authorised Officer of the
Government such books, accounts, documents, instruments, or commodities in custody and
control of the applicant, as may be necessary for proper evaluation of the application;
(b) to require any applicant to allow entry and inspection of any premises, from which
activities claimed to be for the welfare of consumers are stated to be carried on, to a duly
authorised officer of the Central Government or, as the case may be, State Government;
(c) to get the accounts of the applicants audited, for ensuring proper utilisation of the grant;
(d) to require any applicant, in case of any default, or suppression of material information on
his part, to refund in lump-sum, the sanctioned grant to the Committee, and to be subject to
prosecution under the Act;
(e) to recover any sum due from any applicant in accordance with the provisions of the Act;
(f) to require any applicant, or class of applicants to submit a periodical report, indicating
proper utilisation of the grant;
(g) to reject an application placed before it on account of factual inconsistency, or inaccuracy
in material particulars;
(h) to recommend minimum financial assistance, by way of grant to an applicant, having
regard to his financial status, and importance and utility of nature of activity under pursuit, after
ensuring that the financial assistance provided shall not be misutilised;
(i) to identify beneficial and safe sectors, where investments out of Consumer Welfare Fund
may be made and make recommendations, accordingly.
(j) to relax the conditions required for the period of engagement in consumer welfare
activities of an applicant;
(k) to make guidelines for the management, administration and audit of the Consumer
Welfare Fund.
(9) The Central Consumer Protection Council and the Bureau of Indian Standards shall recommend
to the GST Council, the broad guidelines for considering the projects or proposals for the purpose of
incurring expenditure from the Consumer Welfare Fund.


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