Clarifications on Refund

In order to reduce the compliance cost of the taxpayers and to ease the procedure of filing refund, it is being clarified that the refund claim application will be accompanied by FORM GSTR-ZA of the period for which the claimant has filed refund. FORM GSTR-2A will be sufficient for the information of input tax credit availed by the taxpayer claiming refund. Invoices will only be required for the entries that are not present in GSTR-2A. The proper officer shall not demand for the original or duplicate invoices for the entries present in GSTR-ZA. The taxpayer claiming refund shall submit an annexure containing details of invoices on the basis of which input tax credit has been availed for the relevant period along with FORM RFD-01A and Application Reference Number (ARN).

At present, the portal calculates the amount to be refunded in case of refund of unutilised input tax credit. After calculation, the electronic credit ledger of the claimant is debited by the refundable amount. Currently, the procedure of offsetting is not available on the portal. Hence, the taxpayers have to manually debit the balance of Integrated Tax (to the extent available) first and then Central Tax and State Tax equally. The refund application can be filed only after electronic credit ledger has been debited and ARN has been generated.

Where the refund amount is rejected due to eligibility of credit. the same shall be re-credited in electronic credit ledger in FORM GST RFD-01B and a demand notice will be issued for recovery of the amount along with the interest and penalty as applicable. If the demand is confirmed, the same shall be added to the electronic liability ledger in FORM GST DRC-O7. The taxpayer may also pay the amount along with interest and penalty before receiving the notice and the same Shall be intimated to the officer in FORM GST DRC-03. Where the refund application is rejected on some other ground, an undertaking will be received from the claimant that no appeal will be filed against the order and the amount shall be re-credited to the electronic credit ledger.

It is further clarified that no refund of integrated tax paid on expert of goods or services will be available to the registered persons including importers who are directly purchasing or importing supplies on which benefit of reduced tax or no tax incidence has been availed.

CSD is required to file refund application manually in FORM GST RFD-10A on a quarterly basis till the online utility is not available on the common portal for them. The refund application will be accompanied with specified documents, After receiving the complete application of the refund, the proper Officer shall issue an acknowledgement manually Within 15 days If any deficiency is noticed, a single deficiency memo will be issued in FORM GST RFD-03. The Proper officer shall verify the details and ensure that only 50% 0f the amount paid as tax on inward supplies has been granted as refund.