Procedure for obtaining Refund under GST

The refunds under GST can arise in the following circumstances-

• The cash balance in the electronic cash ledger deposited in excess or
• Tax paid by mistake or
• The accumulated Input Tax Credit (ITC) is unable to be utilised for tax payments due to zero-rated sales or inverted tax structure.

The forms in which a GST refund is claimed varies according to the type of GST refund being claimed. Let us discuss the same in detail.

Refund pre-application form

In order to claim the refund, the taxpayer is required to file a Refund pre-application form to offer information about their business, Aadhaar number, income tax details, export data, expenditure and investment, and so on. Taxpayers must file this pre-application form for all types of GST refund. This form need not be signed and cannot be edited once submitted.

The two steps involved in filing the GST refund pre-application form are as follows:

• Step 1: Log in to the GST portal, go to the ‘Services’ tab, click on ‘Refunds’ and select the ‘Refund pre-application form’ option.
• Step 2: On the page displayed called ‘Refund pre-application form’, fill in the details asked, and click on ‘Submit’. A confirmation of submission will be displayed on the screen.

The following details must be reported

• Nature of business - Manufacturer, merchant exporter, trader, and service provider
• Date of issue of IEC (only for exporters) - Those applying for a refund on account of exports (without payment of tax) must furnish the date of issue of the Import Export Certificate.
• Aadhaar number of the primary authorised signatory is mandatory.
• Value of exports made in the FY 2022-23 (only for exporters) - This must be computed at the GSTIN level and not PAN level.
• Income tax paid in FY 2021-22
• Advance tax paid in FY 2022-23.
• Capital expenditure incurred and investment made in FY 2021-22

Form RFD-01 for GST refund

RFD-01 must be filed for the following types of GST refund claims:

• Excess cash balance from the electronic cash ledger or excess tax payment.
• IGST paid on export of services (with payment of tax).
• Accumulated ITC due to exports of goods and services without payment of tax.
• Accumulated ITC due to supplies made to SEZ unit/SEZ developer (without payment of tax).
• ITC accumulated due to inverted tax structure (tax on inputs higher than a tax on outputs).
• If a recipient of deemed exports has paid the tax on inward supplies that qualify as deemed exports and has claimed ITC for the tax paid in their electronic credit ledger, the recipient of these deemed exports is eligible for a refund of the tax amount paid (on a condition that the supplier of such deemed exports does not claim a refund).
• Tax paid on supplies made to SEZ units/SEZ developers (with payment of tax).
• Tax paid on an intrastate supply later held as interstate supply and vice versa.
• If a supplier of deemed exports paid tax on deemed supplies without charging and collecting tax from the buyer of deemed exports, then he would be eligible to claim it as a refund (on a declaration that the recipient or buyer of such deemed exports does not claim a refund).
• On account of Assessment or Provisional Assessment or Appeal or any other order.
• There is also a provision for claiming a refund on ‘Any other ground’ in RFD-01.

Care must be taken to declare consistent information of the invoices in both GSTR-1, where it applies, and RFD-01. A certificate by a chartered accountant/cost accountant needs to be submitted along in certain cases.

Follow the below steps to file a refund application in RFD-01

Step 1: Log in to the GST portal and go to the ‘Services’ tab, click on ‘Refunds’ and select the ‘Application of refund’ option.

Step 2: In the page that appears, select the reason for refund or the type of refund and click on ‘Create refund application’.

Step 3: Select the period for which a refund is to be applied and select ‘Yes’ or ‘No’ on the dialogue box- ‘If you want to file a nil refund’. 

In case of nil refund application, the taxpayer can checkmark the declaration and proceed to file using either DSC or EVC.

This step is not applicable in types of refunds such as excess cash balance in the ledger, intrastate supply later held as interstate supply and vice versa, assessment or provisional assessment or appeal or any other order.

Step 4: Enter the details on the relevant page that gets displayed, based on the type of refund selected in the previous step. The details required for each type of refund selected is explained below-

• Type 1: Excess cash balance in electronic cash ledger - Enter the amount of cash to be claimed as a refund.
• Type 2: Excess tax paid through GSTR-3B - Enter details of the GSTR-3B in which such tax payment was done in cash.
• Type 3: Accumulated ITC due to exports of goods and services without payment of tax
• Download Statement 3 and enter the details of export invoice documents on which refund is claimed.
• Generate the JSON file and upload it on the GST portal. Validate errors, if any.
• In the column, ‘Computation of Refund to be claimed Statement-3A [rule 89(4)]’, enter aggregate turnover, adjusted total turnover and net input tax credit.
• Validations take place to compute the maximum amount of refund that the taxpayer is eligible for.
• Type 4: Accumulated ITC due to supplies made to SEZ unit/SEZ developer (without payment of tax)- There is a prerequisite that GSTR-1 and GSTR-3B of the selected period must be filed. The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 5. A CSV file can be uploaded instead of JSON.
• Type 5: ITC accumulated due to inverted tax structure - Inverted tax structure means the tax rate and amount paid on inputs are higher than the outputs. The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 1A. Thereafter, enter details such as turnover of inverted rated supply, tax payable, adjusted total turnover and net input tax credit.
• Type 6: Refund by the recipient of deemed exports- The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 5B. Thereafter, enter details such as net input tax credit of deemed exports and the refund to be claimed.
• Type 7: Tax paid on supplies made to SEZ unit/SEZ developer (with payment of tax)- The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 4. The refund amount will get auto-populated based on the statement uploaded.
• Type 8: Tax paid on an intrastate supply later held as interstate supply and vice versa - The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 6. The refund amount will get auto-populated based on the statement uploaded.
• Type 9: Refund by the supplier of deemed exports - The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 5B. The refund amount will get auto-populated based on the statement uploaded.
• Type 10: Refund of IGST paid on export of services (with tax payment)- The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 2. The refund amount will get auto-populated based on the statement uploaded.
• Type 11: On account of assessment or provisional assessment or appeal or any other order- Make the selection of the type of order and enter details of the same, as per the screenshot given below.
• Type 12: Refund on ‘any other ground’ - Reasons could be excess interest paid via GSTR-3B. Mention the reason for refund specifically in 200 characters along with the amount.

 Step 5:

• Enter bank account details for the refund, upload the supporting documents and declaration, in refund types that mandate it.
• Up to 10 supporting documents can be uploaded, with file size limited to 5 MB each.
• Preview the application and click on ‘Save’. The saved application remains for 15 days for the taxpayer’s action. Click on the ‘Proceed’ button after checking the boxes against undertaking and self-declaration.

Step 6: File RFD-01 using EVC or DSC.

Application reference number or ARN gets generated and displayed on the screen. Taxpayers can track using this number. The ARN is also sent to the email address and mobile number.

The refund application is thereafter assigned to the refund processing officer. It will be processed, and the refund status gets updated.

GST refund process for embassies and international organisations

There are two ways in which refunds can be claimed:

• Use GSTR-11 to generate a refund application in form RFD-10.
• Obtain the RFD-10 form on the dashboard after logging into the GST portal.

In the first case, go to GSTR-11 already filed by selecting the tax period/quarter. Click on the ‘Generate RFD-10’ button.

Select the embassy or organisation radio button and click on the ‘Create’ button. Table ‘Details of the tax paid on purchases as reported under GSTR-11’ will have amounts as auto-populated from the return of the respective period, editable as well.

Preview and submit using DSC or EVC.

In the second case, on the dashboard after logging in to the GST portal, go to the services tab and select refunds. Thereafter, choose the ‘Application for refund’ option. 

On the page that gets displayed, choose ‘Embassy/International Organisation’ as the option and click on ‘Create’.

The details of tax paid eligible for refund get auto-populated from GSTR-11, already filed.

Verify and edit or enter the refund amount.

The rest of the steps remain the same as the first case.