Understanding the Implementation of GST Refund
A lot of changes are made to the policies and practices of the central government in India. One such amendment was the introduction of GST in the Indian market. Several strategies and tools use to help with a refund application during the implementation of Goods and Services Tax. It has been seen that many people who are regular taxpayers are continually finding ways to file for the claim to get many refunds on the GST. That is why the regulatory body has put forward a standardized form to get a refund.
Money is very crucial when it comes to the operation of the business and the flow of cash to maintain the administration of the company. The manufactures, as well as exporters, must be aware of the fact that if they fail to get a refund on time, then they might have to face financial problems.
The taxpayers can demand a refund under GST when they pay more than the subject tax amount. There are numerous situations where discount under GST is relevant, for example, supplies to specific monetary areas, zero-appraised fares, engineers, and some more. Earlier they used to be a fixed window to apply for a refund, but now the government has allowed the taxpayers to submit the refund claim in several months.
Some of the cases of claiming for the refund are:
- Paying beyond the tax liability.
- Deemed exports.
- Sending out items and/ or services.
- Supplying in special economic regions.
- Reimbursement to foreign embassies.
- Due to the judgment of appellate authority or court.
- Commodities sold to international tourists.
- Pre-deposits refund.
What is the Procedure for Filing Claims to Get a Gst Refund?
Apply for a refund by submitting the GST RFD-01 form on the official GST portal. You need to provide all the required documents not later than two years.
Generally, the appropriate date refers to the date when you pay the tax. The applicable date can vary as per the below-mentioned cases:
- Exporting commodity via water or air: Date on which the shipping left from India.
- Exporting commodity via land: Date of crossing the land border of India.
- Sending commodity by post: Date on which the parcel is sent out from the P.O.
- Completing service before getting payment receipt: Date on the payment receipt.
- Completing service after getting payment receipt: Date of payment statement.
- Commodity sent to special economic regions: Date of filing the GST return claim.
- Refund application filed by an individual, non-supplier: Date of receiving the commodity by the individual.
If you fail to claim within the provided appropriate time, you will not be able to proceed with the refund claim. As a result, you will not be eligible to receive the credit amount.
The required documents for the claim are to be attached to the GST RFD-01 form in Annexure 1.
The required documents include:
- Refund amount below two lakhs: Submit the statement declaring that the tax incidence or filed interest as the refund is not yet distributed to any other individual.
- Refund amount above two lakhs: A Chartered Accountant certified proof that declares refund claim is for an individual or the tax incidence or filed interest as the refund is not yet distributed to any other individual.
What Are the Required Documents as Per the Type of Refund?
- Exporting commodities refund: Statement that includes the number as well as the export date, export invoice that consists of the number and date.
- Exporting services refund: Statement that provides for the number as well as the invoice date, Foreign Inward Remittance Certificates or related Bank Realization Certification.
- Sending commodities to special economic regions (SEZ units or developer) refund: Statement that includes the number as well as the invoice date endorsed commodity proof.
- Sending services to special economic regions refund: Statement that consists of the number as well as the invoice date, approved service proof, operation credibility proof by the service recipient as per Special Economic Zone Act, 2005.
- Deemed exports refund: Statement that includes the number as well as the invoice date, related proofs.
- Unutilized ITC refund: ITC is when the input tax rate is higher than the output tax rate. It is a statement that includes the number as well as the invoice date within the tax period.
- Received judgment/order refund: Copy of the order received along with the reference number.
- Provisional inspection finalization refund: Copy of the order passed along with the reference number of the final order assessment.
- Paying beyond the tax refund: Statement comprising of the information about the claim amount.
If the claim gets rejected during system validation, you can proceed by filling the GST RFD-03 reform to rectify the errors. Upon successfully filing the claim, you will receive an acknowledgement via SMS. The claim form will be forwarded to the tax officer for inspection with a month’s time frame. After satisfactory inspection, the claim for the GST refund is approved. GST RFD-06 e-form carries the decisive order to approve the refund request. If it is for an export refund claim, the GST RFD-04 e-form is generated to approve 90% of the claim amount depending on the applicant’s eligibility.
It might be possible that the entire refund process might seem to be complicated, considering all the conditions and scenarios that are applicable. Hence, consuming your time so we suggest it is always better to get assistance for GST filing and refund. You can connect with the country’s best advisory firm named 3E Accounting. Our staff will help you to resolve any queries regarding the refund process.