GST Payment and Refund

Overview of GST Payment and Refund

Goods and Services Tax (GST) was implemented in 2017. It has replaced service tax, VAT, excise duty, etc., by bringing all commodities and services under its wing. GST helps to maintain tax compliance once you register your business/services. With the tax money, it helps the government to plan and execute necessary schemes for the people.

The taxpayer has the right to request a refund before or on the Filing GST return due date if the taxpayer has paid more than the actual tax to be paid. This can be found during the calculation of the GST.

Once the New GST Registration Online Process is completed, you will get a unique 15-digit registration number for your business called the Goods and Services Tax Identification Number (GSTIN). GST helps you to cut costs and claim tax returns.

GST Refund Eligibility

GST is levied based on the number of invoices raised. It has been introduced to ensure a smooth collection of taxes from manufacturers and exporters. This system has not only reduced the burden on the taxation system but has also made it easier to get a GST refund.

A person is eligible for a GST refund in the following scenarios.

• When excess money has been paid as GST due to a mistake in the calculation, you can claim a refund
• In case of an export transaction that involves a cumulative balance of input credits, a refund can be claimed. This is also applicable in case of a rebate claim by the exporter
• If the provisional assessment indicates that you can claim a refund, you can claim a GST refund
• If you have paid an amount as GST for articles exempted from tax or a lower tax rate is levied, that results in input credit accumulation in GST leaders. This amount you can claim for GST refunds
• When a product is procured from the United Nation's partners or a foreign embassy, they can claim a GST refund.

GST Refund Forms List

To file a GST refund, forms are prescribed for every scenario. They are listed here:

Form RFD-01 (Application Form)

For the purpose of filing Form RFD-01, it has to be authorised by a chartered accountant that it can be filed within two years from the relevant date of GST. The relevant date differs in different cases, so it cannot have a fixed definition.

Therefore, one must be careful about noting the relevant date for filing the GST refund. In case one fails to file within the timeframe, it might lead to blocking credit.

Here is a list of relevant dates that are applicable in respective transaction events:

Form RFD-02 (Acknowledgement Form)

After the assessee has filed an application for a GST refund, Form RFD-02 will be auto-generated. This bears the details and acknowledgment of the application filed. The assessee can receive Form RFD-02 via email or SMS.

Form RFD-03 (Deficiency Memo Form)

In case there is a mistake in Form RFD-01 when filing the application for a GST refund, the applicant shall receive Form RFD-03 to make the corrections. This form should be sent back making after all the required corrections.

Form RFD-04 (Provisional Order)

In case of a zero-rated supply, the applicant can file for a GST refund in Form RFD-04. If the assessing officer is satisfied with the application, he may, within seven days, sanction 90% of the total refund amount on a provisional basis.

Form RFD-05 (Payment Order)

On the amount being sanctioned, it will be notified on Form RFD-05. Be assured that the amount will be credited to your bank account.

Form RFD-06 (Refund Order)

If the assessing officer is under the impression that there is no more requirement for any inquiry, the refund order shall be issued through Form RFD-06.

Form RFD-07 (Adjustment Form)

If there is any great demand to be adjusted with the GST refund, then Form RFD-07 is to be filed.

Form RFD-08 (Rejection Notice Form)

Where the assessing officer rejects a refund application or a part of the GST refund claim, a notice is issued using Form RFD-08, asking the applicant to justify their claim.

Form RFD-09 (Justification Form)

Where the applicant receives the notice through Form RFD-08, the answer justifying the claim is to be filed using Form RFD-09

Form RFD-10

If the applicant is a United Nations body, Consulate, or foreign embassy; they have to file a Form RFD-10 requesting a GST refund within 90 days from the end of the quarter.

Time Duration For Processing Refund

The processing of the refund application takes around 30 days from the filing date. The Subramanian Committee suggested that the application for a GST refund must be processed within 90 days of filing. If the delay is on the authority’s side, 6% interest should be paid along with the GST refund amount.

The Finance Minister Nirmala Sitaraman declared that the refund procedure should be done within seven days and, in case there is a delay by 14 days from the day of filing, the interest shall be paid too.

Why Vakilsearch?

Our expert lawyers and company secretaries in India will help you claim the additional money you paid on taxes, you don’t have to worry about losing that extra money. You just need to submit the required documents, and we will take care of the refund process. We will also provide you with a thorough overview of the process so you can have satisfying expectations.

Our highly skilled support team will be in touch with you the entire time and will clarify all your doubts if you have any. Get in touch with Vakilsearch and claim your refund in a hassle-free way.