Key Forms for Claiming GST Refunds
This article outlines the essential forms used for managing GST refund applications, including filing, acknowledgment, and deficiency management. It covers recent updates to GST refund rules, such as extended timelines for COVID-19 periods and Budget 2022 amendments. The guide details the process and documentation required for Form GST RFD-01, Form GST RFD-02, and Form GST RFD-03, ensuring a clear understanding of the electronic refund mechanism.
Under GST, the entire process for filing tax returns and requesting refunds is conducted online. This article details the various forms required for initiating a refund claim, receiving acknowledgment, and managing the scrutiny process within the GST framework.
Latest Updates on GST Refunds
July 5th, 2022
Taxpayers are now permitted to exclude the COVID-19 pandemic duration (March 1st, 2020, to February 28th, 2022) when calculating the time limit for submitting GST refund requests under Sections 54 or 55 of the CGST Act.
February 1st, 2022
Based on the Budget 2022 amendments:
- Section 54 has been revised to specify that a refund claim for any outstanding balance in the electronic cash ledger can be made through a prescribed form and procedure.
- The timeframe for UN agencies to claim refunds is now extended to two years from the final day of the quarter when supplies were received, increased from the previous six months.
- Restrictions on refunding taxpayers due to tax defaults, previously limited to unutilised ITC refunds, now apply to other types of refunds as well.
- A new sub-clause (ba) within clause (2) of the explanation clarifies the relevant date for submitting refund applications for supplies directed to SEZs.
May 1st, 2021
The deadline for issuing orders to fully or partially reject refund claims, if it falls between April 15th, 2021, and May 30th, 2021, has been extended. The revised deadline will be the later of two dates:
- 15 days following the response to a notice OR
- May 31st, 2021.
Form GST RFD-01: Refund Application
Individuals seeking a refund of tax, interest, penalty, or fees paid must submit Form GST RFD-01 electronically via the common portal. This can be done either directly or through a Commissioner-notified Facilitation Centre, with exceptions for specific entities such as:
- Any specialized agency of the United Nations organization
- Multilateral Financial Institution
- An organization under the United Nation (Privileges and Immunities) Act
- Embassy of foreign countries
- Any other person or class of persons as may be specified in this behalf by the Indian Government.
Refunds for the balance available in the electronic cash ledger may also be processed through Form GSTR-3B, Form GSTR-4, and Form GSTR-7, as applicable.
For exported goods, the refund claim can only be filed after the person in charge of the conveyance provides the export manifest or export report to the proper officer.
Before submitting a refund application, invoice details and the IGST amount must be reported in Table 6A of GSTR-1 and Table 3.1(b) of GSTR-3B, respectively.
In cases of goods supplied to a Special Economic Zone (SEZ) or an SEZ developer, the supplier must file the refund application after the goods are fully admitted into the SEZ for authorized operations. Authorized operations are endorsed by the specified officer of the SEZ.
An applicant is eligible for a refund of the amount remaining after adjusting the tax payable from the advance tax deposited at the time of registration.
The applicant should claim this refund when filing the last return or after the last return has been filed. For instance, if Amar deposited an advance tax of Rs 1,00,000 during registration and his total tax liability was Rs 90,000, he can claim the Rs 10,000 refund when filing his last return by December 31st, 2018, or subsequent to that filing.
An exception applies when the supply of goods/services is considered 'Deemed Export'; in such scenarios, the recipient of these goods/services must claim the refund for the tax paid.
Applications for the following refund types can be filed using Form GST RFD-01 on the GST common portal, along with supporting documents, and will be processed electronically:
| Sl No. | Type of Refund | Required Supporting Documents |
|---|---|---|
| 1 | Refund for unutilized Input Tax Credit (ITC) resulting from the export of goods or services without tax payment (Requires a valid LUT/Bond submission in Form RFD-11) | (i) Copy of GSTR-2A for the relevant period (ii) Statement of invoices (Annexure-B*) (iii) Self-certified copies of invoices not found in GSTR-2A but included in Annexure-B (iv) BRC/FIRC for service exports and shipping bill for goods^ (*As per format below) (^Applicable only for exports from non-EDI ports) |
| 2 | Refund of tax paid on exported services with tax payment | (i) Copy of GSTR-2A for the relevant period (ii) Statement of invoices (Annexure-B) (iii) Self-certified copies of invoices not found in GSTR-2A but included in Annexure-B (iv) BRC/FIRC/other proof of sale proceeds receipt for services (v) Self-declaration that the applicant has not been prosecuted for five years from the relevant period where tax evaded exceeds Rs 2.5 crores |
| 3 | Refund of unutilized ITC due to supplies made to SEZ units/developers without tax payment | (i) Copy of GSTR-2A for the relevant period (ii) Statement of invoices (Annexure-B) (iii) Self-certified copies of invoices not found in GSTR-2A but included in Annexure-B (iv) Endorsement(s) from the specified SEZ officer confirming receipt of goods/services for authorized operations |
| 4 | Refund of tax paid on supplies made to SEZ units/developers with tax payment | (i) Self-certified copies of invoices not found in GSTR-2A but included in Annexure-B (ii) Endorsement(s) from the specified SEZ officer confirming receipt of goods/services for authorized operations (iii) Self-declaration that the applicant has not been prosecuted for five years from the relevant period where tax evaded exceeds Rs 2.5 crores |
| 5 | Refund of accumulated ITC due to an inverted tax structure | (i) Copy of GSTR-2A for the relevant period (ii) Statement of invoices (Annexure-B) (iii) Self-certified copies of invoices not found in GSTR-2A but included in Annexure-B |
| 6 | Refund to the supplier for tax paid on deemed export (DE) supplies | (i) Documents required under Notification No. 49/2017-Central Tax dated 18.10.2017 (ii) Documents required as per Circular No. 14/14/2017-GST dated 06.11.2017 (For more, see this article) |
| 7 | Refund to the recipient for tax paid on deemed export supplies | (i) Documents required as per Circular No. 14/14/2017-GST dated 06.11.2017 (For more, see this article) |
| 8 | Refund of excess balance in the electronic cash ledger | –Not Applicable– |
| 9 | Refund of excess payment of tax | –Not Applicable– |
| 10 | Refund of tax paid on an intra-state supply later reclassified as inter-state and vice versa | –Not Applicable– |
| 11 | Refund resulting from assessment/provisional assessment/appeal/other order | (i) Reference number and copy of the Assessment/Provisional Assessment/Appeal/Other Order (ii) Reference number/proof of previous pre-deposit payment for which refund is claimed |
| 12 | Refund based on any other ground or reason | (i) Documents supporting the claim |
Through Circular No. 125/44/2019 – GST, it is clarified that no additional documents are needed from the applicant at the time of filing the refund application.
The Application Reference Number (ARN) will only be generated once the applicant has:
- Completed the submission of the refund application in Form GST RFD-01
- Uploaded all necessary supporting documents/undertakings/statements/invoices
- Debited the required amount from the electronic credit/cash ledger, if applicable.
Form GST RFD-02: Acknowledgment
The refund application, Form GST RFD-01, is considered filed on the date its Application Reference Number (ARN) is generated. Upon ARN generation, the application and all supporting documents are electronically forwarded to the appropriate jurisdictional officer. This officer is responsible for reviewing and scrutinizing the refund request. If the application aligns with the CGST Rules, an acknowledgment in Form GST RFD-02 should be issued within 15 days of the refund claim submission. It is important to note that once an acknowledgment in Form RFD-02 has been issued for a refund application, a deficiency memo in Form RFD-03 cannot subsequently be issued for that same application.
Form GST RFD-03: Deficiency Memo
After the proper officer assesses the application and identifies any discrepancies, a deficiency memo must be issued to the applicant using Form GST RFD-03 within 15 days of the refund application date.
This Form GST RFD-03 is issued electronically via the common portal.
Upon the issuance of a deficiency memo, any amount of input tax credit or cash debited from the electronic credit/cash ledger will be automatically re-credited.
It should be noted that this re-credit occurs automatically, eliminating the need for an order in Form GST PMT-03.
Once a deficiency memo is issued, the original refund application will not be processed further, requiring the submission of a new application.
The applicant must rectify the issues highlighted in the deficiency memo and resubmit a new refund application electronically in Form GST RFD-01 for the same period.
The revised application will receive a new and distinct ARN.
The proper officer cannot issue another deficiency memo for an application covering the same period unless the deficiencies pointed out in the initial memo remain uncorrected.
It is important to remember that a refund application filed after correcting deficiencies is treated as a new application; therefore, such a rectified refund application must also be submitted within two years of the relevant date.
Other refund forms will be discussed in subsequent articles.
The GST refund process is designed to be streamlined and hassle-free, as it is entirely electronic.