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Application for Refund of Tax under GST

In normal cases, a tax payer can offset the amount of GST paid by him on all inward supplies while discharging the output tax liability arising due to outward taxable supply. If there is any excess input tax credit which could not be offset completely against outward taxable supplies, the same must be carried forward to the next month. No refund shall be provided by the Government in this regard. However, in certain cases, refund of Input Tax Credit can be claimed by the tax payer. The procedure laid down for applying refund under GST law is different under different scenarios. In this article we shall understand how and when tax payers can claim refund for excess input tax credit.

Scenarios where a tax payer may require to claim refund:

• Taxes, cess and interest paid in case of zero-rated supplies
• Balance of excess cash paid into the electronic cash ledger
• Unutilised Input tax credit accumulated in your Electronic Credit Ledger due to Inverted duty structure.

Forms to claims return under GST:

• There are two forms which are prescribed for application of Refund under GST namely RFD-01 and RFD-01A.
• RFD-01 is an application for online processing of refund under GST. It is to be e-filed on the GST portal to claim the refund.
• RFD-01A is the application form for refund form under GST for manual processing, notified for certain cases of Refund.
• Whereas, RFD-01A is a replica of RFD-01 introduced as a temporary solution till such time the online facility is enabled for claims of refund.

Steps for Filing Application for Refund under GST:

1. Login to GST portal.
2. Go to Services Tab.
3. In Services Tab, select the Refund tab.
4. In Refund Tab, select "Application for Refund" Option.
5. Select type of refund from among the given options by selecting radio button against the option.

I. Refund of Excess Balance in Electronic Cash Ledger
II. Refund of ITC on Export of Goods & Services without Payment of Tax
III. On account of supplies made to SEZ unit/ SEZ developer (without payment of tax)
IV. Refund on account of ITC accumulated due to Inverted Tax Structure
V. On account of Refund by Recipient of deemed export
VI. Refund on account of Supplies to SEZ unit/ SEZ Developer (with payment of tax)
VII. Export of services with payment of tax
VIII. Tax paid on an intra-State supply which is subsequently held to be inter-State supply and vice versa
IX. On account of Refund by Supplier of deemed export
X. Any other (specify)
XI. Excess payment of tax

6. After selecting radio button against applicable option, click "Create" button to generate Refund Request.

Who should file RFD-01/01A?

• In case of deemed exports, either the recipient or the supplier can make an application for refund of taxes paid.
• For a particular invoice of deemed exports, both the supplier and the recipient cannot apply to claim refund.
• Suppose the supplier applies for refund, then a declaration has to be taken from the recipient that he is not claiming the refund against that supply.
  
  

The following types of refunds under GST are currently being manually processed:

• IGST paid on zero-rated supplies
• ITC on exports under letter of undertaking or bond
• Claims in case of deemed exports
• Refund claims on account of inverted duty structure
• Excess balance in Electronic cash ledger

Hence, file RFD-01A in the place of RFD-01 for the above cases till such time until further notified.

Cases where RFD-01/01A is not applicable:

RFD-01/01A has to be filed for all cases of refund claims except the below mentioned:

• Export of goods involving payment of export duty
• Exports of goods/ services where IGST is paid and shipping bill is by default considered the application for refund.
• Cases where the supplier avails the drawback scheme of the CGST/SGST/IGST paid on the supplies
• UN or embassies and certain persons notified
• Casual taxable persons / non-resident taxable persons
  
  

Prerequisites for applying for refund:

• The tax payer must have filed GSTR-1 for the applicable tables at 6A for exports, 6B for Supplies made to SEZ units/ SEZ developer and 6C for Deemed exports.
• Also, GSTR-3B has to be filled up at Table 3.1(b) and filed in line with the GSTR-1.
• Any mismatch found between the returns shall lead to delay in processing of refund.
• The applicant must have the list of invoices in hand against which the refund is claimed.