Timely refund mechanism is essential in tax administration. With the inflow of refunds, blocked funds are released for meeting working capital requirements, expansion and modernisation of existing business and much more. Under the GST regime, the claim and sanctioning procedure of refunds are entirely online and time-bound.
A claim for refund may arise on account of:
- Export of goods or services,
- Supplies to SEZs units and developers,
- Deemed Export supplies,
- Refund of taxes on purchase made by UN or embassies,
- Refund arising on account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court,
- Refund of accumulated Input Tax Credit on account of inverted duty structure,
- Finalisation of provisional assessment,
- Refund of pre-deposit,
- Excess payment due to mistake,
- Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India,
- Refund on account of issuance of refund vouchers for taxes paid on advances against which goods or services have not been supplied,
- Refund of CGST & SGST paid (treating the supply as intra-State supply which is subsequently held as inter-State supply and vice versa).
Note: The GST law requires that every claim for refund should be filed within 2 years from the relevant date.
What Is Relevant Date For Claiming Refunds Under GST?
In most cases, the ‘Relevant Date’ for calculating the time-limit for claiming a refund is the date of payment of tax. However, in some situations, the ‘Relevant Date’ can be arrived at as follows:
|1||The refund claim is for IGST paid on Export of goods or the accumulated ITC of Inputs/input services used in export supplies.||Date of departure of conveyance from India. (ship/aircraft/vehicle)||In case the goods are transported by post: Date of Dispatch by the post office to the place outside India|
|2||The refund claim is for IGST paid on Export of services or the accumulated ITC of Inputs/input services used in export supplies.||Date of issue of invoice||If the invoice is received before the receipt of payment, the relevant date will be the date of receipt of payment in convertible foreign exchange.|
|3||The refund claim is for Deemed Exports.||Date on which the return declaring the details of Deemed Exports is furnished.|
|4||Refund of Tax because of a judgement/decree/order/direction||The date such judgement/decree/order/direction is communicated.|
|5||Refund of Unutilised ITC||31 March of the relevant financial year.|
|6||Refund of tax provisionally paid||Date of adjustment of tax after the final assessment.|
|7||Refund claim by any person other than the supplier||Date of receipt of goods/services.|
Note: The GST refund application has to be filed online on the GST portal in form RFD-01/RFD-01A. Once this application is submitted, the GST officer is expected to issue an appropriate order within 60 days. However, if the refund is not granted within these 60 days, then the refund has to be paid to the applicant with an interest of 6% p.a.