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Required Statements for Goods and Services Tax Refund Applications

This article clarifies the various statements taxpayers must annex when applying for a GST refund using Form GST RFD-01. It details eight distinct statements, each tailored to specific refund reasons like inverted duty structure, exports, or supplies to SEZ units. The content also highlights recent updates to GST refund regulations and the essential documents required for different claim scenarios. Understanding these requirements is crucial for a successful refund application process.

📖 3 min read read🏷️ GST Refund

When submitting a Goods and Services Tax (GST) refund application via Form GST RFD-01, specific statements must be included, varying based on the refund's rationale. Seven distinct statements are outlined, each corresponding to a particular reason for the claim. The filing of GST RFD-01 also necessitates a certificate, which must bear the signature of either a chartered accountant or a cost accountant. These statements are designed for auto-population on the GST common portal, where applicants can select the relevant invoices supporting their refund claim.

Latest Updates on GST Refund Regulations

Significant revisions have been introduced regarding GST refund procedures:

  • July 5th, 2022: Taxpayers are permitted to disregard the COVID-19 pandemic period (March 1st, 2020, to February 28th, 2022) when calculating the deadline for submitting GST refund applications under Sections 54 or 55 of the CGST Act.

  • February 1st, 2022 (Budget 2022):

    • Section 54 has been modified to outline the specific form and method for claiming refunds of any electronic cash ledger balances.
    • The period for UN agencies to claim refunds has been extended from six months to two years from the final day of the quarter in which the supply was received.
    • Refund restrictions previously applied to unutilized Input Tax Credit (ITC) refunds for taxpayers with tax defaults now encompass other refund categories.
    • A new sub-clause (ba) of clause (2) in the explanation clarifies the relevant date for filing refund applications concerning supplies made to Special Economic Zones (SEZ).

  • May 1st, 2021: If the deadline for issuing orders to fully or partially reject a refund claim falls between April 15th, 2021, and May 30th, 2021, it has been extended. The revised deadline will be the later of either 15 days following the response to a notice or May 31st, 2021.

Statement 1: For Inverted Duty Structure Refunds

This statement must accompany Form GST RFD-01 when a refund is sought due to a higher tax rate on inputs compared to the tax rate on sales, a situation known as an inverted duty structure. The statement requires separate tables for both inward and outward supplies. For outward supplies, it will include details of tax paid under various heads such as CGST, SGST, UTGST, and IGST. For inward supplies, it will show the tax paid on inputs and the total Input Tax Credit (ITC) accessible under these same tax categories.

Illustrative Example:

Consider Glow Private Limited, which provides investment consultancy services for Rs 5 lakh. Their GST liability for this service is Rs 90,000 (18% GST). However, Glow Private Limited paid 28% tax on its inputs, accumulating an ITC of Rs 1,00,000. In this scenario, Glow Private Limited is eligible to claim a refund of Rs 10,000 for the surplus tax paid on inputs. Viraj Consultants, as the recipient, would file Form GST RFD-01 along with Statement 1 and a certificate signed by a chartered or cost accountant to claim this refund.

Statement 2: For Tax Paid on Exports

This statement is mandatory for refund applications concerning tax paid on exports. It requires the inclusion of specific shipping bill details, such as the port code and date, along with Export General Manifest (EGM) information in the designated table. Additionally, the reference number and date from the Bank Realisation Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC) must also be provided within Statement 2.

Statement 3: For Exports Without Tax Payment

When exports are conducted without upfront tax payment, a statement analogous to Statement 2, requiring similar details, must be attached to Form GST RFD-01.

Statement 4: For Supplies to SEZ Units/Developers

Applicants supplying goods or services to a Special Economic Zone (SEZ) unit or developer must annex this statement, which requires the following information in a table format:

  • The supply's point of origin if it differs from the recipient's location.
  • Indication of whether the reverse charge mechanism applies to the supply.
  • The date on which the SEZ unit/developer received the supply (mandatory for goods).
  • A declaration on whether the supply is classified as a deemed export.
  • The reference number and date of the application filed for removing excisable goods for export (mandatory for goods).
  • Particulars of the payment received for the supply provided to the SEZ unit/developer (mandatory for services).
  • The GSTIN of the e-commerce operator, if applicable.

Statement 5: For Supplies from Export-Oriented Units or Deemed Exports

This statement is required for goods supplied from an export-oriented unit or those designated as deemed exports. Statement 5 mandates the provision of these details:

  • The supplier's GSTIN.
  • The taxable value, HSN/SAC code, and quantity of the goods provided.
  • Unregistered dealers must specify the 'STATE' from which goods are supplied.
  • Separate declarations for CGST and SGST charged, or IGST and cess charged.
  • For interstate goods supply, the point of supply must be indicated.
  • Confirmation of whether the tax charged qualifies for Input Tax Credit (ITC) on inputs, capital goods, or input services.
  • The total ITC amount available across CGST, SGST, UTGST, IGST, and cess categories.
  • The tax value specified on any credit or debit notes.
  • The net ITC attributed to the goods or services for which the invoice was issued.

Statement 6: For Inter/Intrastate Supply Reclassification

This statement is submitted when a refund is sought because a supply of goods or services initially classified as interstate is subsequently reclassified as intrastate, or vice versa. The statement must contain the following information:

  • The GSTIN of the recipient, or their name if goods were supplied to a consumer.
  • The date and taxable value as recorded on the invoice.
  • The tax amount paid under CGST, SGST, UTGST, IGST, and cess, as detailed on the invoice and for any reversals.
  • The place of supply, only if it differs from the location of the goods or services recipient.

Statement 7: For Excess Tax Paid in GSTR 3

This statement is required when a refund is claimed due to an overpayment of tax identified in the most recently filed GSTR 3 return. It must include:

  • The specific tax period for which GSTR 3 was filed.
  • The reference number and date of the GSTR 3 filing.
  • The assessed amount of tax payable under CGST, SGST, UTGST, IGST, and cess categories.

Statement 8: For Unregistered Persons Claiming Refund

This statement is necessary when an individual who is not registered under GST seeks a refund for excess tax paid due to the cancellation or termination of a service supply agreement or contract. The unregistered taxpayer is required to provide the following documentation:

  • A detailed statement outlining invoice particulars such as invoice number, date, value, and tax paid.
  • Copies of the relevant invoices.
  • Evidence of payment made to the supplier.
  • A copy of the applicable agreement, whether registered or otherwise.
  • The formal letter issued by the supplier confirming the cancellation or termination.
  • Information and proof of any payment received from the supplier in relation to the agreement's cancellation or termination.
  • A certificate from the supplier, affirming the following:
    • The supplier has duly paid tax on the invoices for which the refund is being requested.
    • The supplier has not offset this tax against their liability by issuing a credit note.
    • The supplier has not and will not claim a refund for the tax amount associated with these invoices.

The precise formats for these statements, required to be annexed with refund applications, are available on the official department's website.

Frequently Asked Questions

Who is eligible to claim a GST refund in India?
Various taxpayers are eligible, including those with an inverted duty structure, exporters, suppliers to SEZ units, and even unregistered persons in specific scenarios like agreement termination.
What is the typical timeframe for processing a GST refund application?
While the CGST Act specifies a general timeframe, processing can vary. Recent updates have provided extensions for certain periods, such as the COVID-19 pandemic duration, affecting the calculation of these time limits.
Can an unregistered person claim a GST refund?
Yes, an unregistered person can claim a GST refund, particularly if it's due to excess tax paid on services following the cancellation or termination of a contract, provided specific documentation is submitted.
What are common reasons for GST refund application rejections?
Common reasons include incomplete documentation, discrepancies in submitted statements, failure to meet deadlines, incorrect calculation of refund amounts, or issues with the accompanying certificate from a CA/cost accountant.
Is there a time limit for filing a GST refund application?
Yes, there is a prescribed time limit for filing GST refund applications, typically two years from the relevant date. However, this period can be subject to specific extensions or clarifications as issued by the GST Council or through budget amendments.