When the amount of GST paid is more than the actual GST liability, there arises a situation of GST Refund. There is a standardised GST refund procedure to avoid confusion.
“Refund” basically includes:
Government doesn’t transfer GST refund to exporters in their bank accounts. To get a refund, the service exporter has to file certain documents with the jurisdictional GST officer of the company. The differentiation between goods and services is made because services are intangible and there is no documentation trail of exports. Export of goods should have a clear trail with customs, shipping/transport and other bills that are being shared with the Government.
There is no need for a proof of realisation (i.e. funds being received) for export of goods but it is necessary to provide proof of realisation for GST refunds on export. The timeline for GST refunds usually lies between 30-60 days.
Exporters will be able to get the refund and rebate of the state taxes (SGST) which is presently not available to them.
The duty drawback rates may go up because the GST rate would be higher than the present rate of Central Excise. The component of service tax is quite low at present.
The refund procedures may become simple as all the data of GST is available online
All export data will be available on GSTN domain. It will be quite transparent and no scope for the tax Department or the exporters to dispute or manipulate it.
Once the Customs and GST IT infrastructure are integrated, there is a possibility of automatic sanction of export incentive would be possible as it is done nowadays for drawback.
The refund/rebate on the export of services may be increased substantially and bring at par with the export of goods.
All other export promotion schemes may be re-modelled to remove duplication and help the exporter.
There will not be any need for physical verification of export documents and the claims as all requisite data will be available on GSTN GSTN server.
There will not be any delay due to bureaucratic hurdle or delay in incentive grants.
No longer will anyone be able to claim incentives on forged documentation as all export/ import data, mode of payments etc. will be available with the GSTN domain.
There are many cases where refund can be claimed. Here are some of them –
A process for online GST refunds has not yet been prescribed. The list of required documents for claiming an offline refund is:
A covering Letter
Bank Realization Certificates or Foreign Inward Remittance Certificates
Application for Refund in the Form GST RFD 01
Form GSTR 3B and GSTR 1
A cancelled cheque
If GST refunds claims exceed Rs. 2 lakh per quarter, a certificate from a Chartered Accountant/Cost Accountant must be submitted along with the documents above.
The time limit for claiming a refund is 2 years from relevant date. The relevant date is different in every case.
Here are the relevant dates for some cases –
Reason for claiming GST Refund
|Excess payment of GST||Date of payment|
|Export or deemed export of goods or services||Date of despatch/loading/passing the frontier|
|ITC accumulates as output is tax exempt or nil-rated||Last date of financial year to which the credit belongs|
|Finalisation of provisional assessment||Date on which tax is adjusted|
Cases delayed beyond 60 days will get interest at the notified rate (not exceeding 6%) till the date of refund, if the refund is sanctioned. In some cases which may be decided by Appellate or Adjudicating authority or Court, interest will be paid at the notified rate (not exceeding 9%), reckoned from the first period (i.e. after the first 60 days) till the date of refund.
Our GST Consultant team consist of Professionals who have in-depth knowledge of the existing laws and practices. GST experts can help you get your GST refunds in a very short span of time and they are experienced enough to assist you for GST and help you with the step by step process of it.