Navigating the Complexities of GST Refunds for Exports
This article offers valuable insights into the potential challenges and pitfalls during the GST refund process and highlights reasons why the tax department might not process Input .....
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GST is all about bringing a smooth flow of funds and compliances for ease of doing business in India. To facilitate such a steady stream, the Government must provide for a hassle-free refund processing system. The prevailing tax structure is cumbersome, and it takes months and seldom years to get refunds from the Government.
GST provides for an efficient and dynamic invoice based tracking system, validating every transaction, ensuring systematic checking of the same. It comes out to be a massive relief for the manufacturers and exporters, especially those in a 100% Export Oriented Units or Special Economic Zones, whose working capital gets blocked in dealing with the time-consuming process of refunds.
Filing application of refunds
Preparation of complete documentation for refund process
Preparation of declaration of non-passing of incidence of tax to any other person
All required certifications by a Chartered Accountant
Representation before the department on behalf of clients
Regular follow-ups with the department for getting refunds at the earliest
Any consultancy related to refunds
If you are a registered person and want to claim GST tax refund in Delhi, MAG can be helpful in providing best GST refund services in Delhi. You can reach us at info@manishanilgupta.com for any issues related to GST refunds.
The taxpayers are required to make an application within two years from the relevant date as given in the Explanation to section 54 of the CGST Act,2017. Let us understand the significance of the "relevant date" as these dates are different in different situations as discussed below:
S.No |
Situations |
Relevant Date |
(a) |
In the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,- |
|
(i) |
If the goods are exported by sea or air |
Date on which vessel or aircraft in which goods are loaded, leaves India |
(ii) |
If goods are exported through land route |
Date on which such goods pass the frontier |
(iii) |
If goods are exported by post |
Date of dispatch of goods by the post office concerned |
(b) |
In the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods |
The date on which return related to such deemed exports is filed |
(c) |
In case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, |
|
(i) |
Where the supply of services had been completed prior to the receipt of payment against such supply |
Date of payment in convertible foreign exchange or in INR wherever permitted by RBI |
(ii) |
Where payment for the services had been received in advance prior to the date of issue of invoice |
Date of issue of invoice |
(d) |
In case where the tax becomes refundable as a consequence of judgement, decree, order or direction of the Appellate Authority, Appellate Tribunal or any Court |
Date of communication of order |
(e) |
In case of refund of unutilized ITC arising due to ‘inverted tax structure’ |
Due date of furnishing of return under section 39 for the period in which such claim for refund arises |
(f) |
In case where tax is paid provisionally under this Act or the rules made thereunder |
The date of adjustment of tax after the final assessment thereof |
(g) |
In the case of a person, other than the supplier |
The date of receipt of goods or services by such person |
(h) |
In any other case |
The date of payment of tax |
It is necessary to keep in mind these relevant dates because any negligence in filing refund applications within prescribed time limits could lead to undesired blockage of funds.
Applicant |
Refund claimed |
Admissibility |
Mr. A |
CGST: Rs 900 + SGST Rs 900 |
Refund inadmissible – as limit shall be applied for each tax head separately and not cumulatively |
Mr. B |
IGST: Rs 1200 |
Refund admissible fully |
What is the proof required for non-passing of incidence of tax to any other person to claim a refund?
Following documents evidence required on the passing of incidence of tax
(i) If the refund claim is less than Rs. 2 Lakhs
A self-declaration by the applicant to the effect that the incidence of tax has not been passed to any other person will suffice to process the refund claim.
(ii) For refund claims of Rs. 2 Lakhs and more
A certificate from a Chartered Accountant/Cost Accountant will have to be given.
However, the declaration above/certificate is not required to be furnished in the following cases:
(a) refund of tax paid
- on the export of goods and services or
- on inputs or input services used in making such exports
(b) refund of unutilised ITC as per Sec 54(3);
(c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued
(d) refund of tax paid on a transaction treating it to be an intra-state supply, but which is subsequently held to be an inter-state supply or vice-versa
(e) the tax or interest borne by a notified class of applicants
The process is extensive in itself and once followed adequately, availing refund can become very smooth and hassle-free. It will transform the face of the long-drawn refund process and provide a boost to the manufacturing or export industry. Those refunds, which usually took years to pass, can now be made in just 60 days. The reliable IT system of the GSTN has actively facilitated this action into the picture.
If you are wondering how to claim your GST refund and if the process to claim the same looks too complicated and cumbersome to you, you can write to us at info@manishanilgupta.com. We will assist you in easily getting your refund and resolving the related issues.
The procedure for claiming a refund under GST involves filing an application in Form GST RFD-01 along with supporting documents.
The time limit for making a refund application under GST is two years from the relevant date
No, taxpayers cannot claim a refund after the expiry of the time limit under GST.
A refund under GST arises when there is excess tax paid, input tax credit accumulated, or exports made with payment of tax.
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