GST Refunds: Who Can Claim, and What to Expect?
The GST Refund is a kind of mechanism that allows taxpayers to receive the payment of taxes that they have paid due to several reasons. In cases where taxpayers have paid taxes in excess in advance, then they are eligible to make claims for GST Refunds. The GST Refunds are crucial for managing the cash flow of a business and boosting the manufacturing units. If delayed, it may adversely affect exporters, suppliers, and businesses.
Know all the details about who can claim, how to apply for the GST Refunds, and what to expect in refunds. If taxpayers apply for the refunds on time, it can benefit them in quite an efficient way. It must be noted that once the GST refund application is submitted, there will be no scope for corrections therefore, just go through the guide to avoid any mistakes.
Who can Claim GST Refunds?
Taxpayers can make eligible claims for the GST Refunds within 2 years from the relevant date. The relevant date for refunds refers to the date when the payment of advance taxes is made. In the following scenarios, an individual can make claims for a refund.
(a) export of goods or services
(b) supplies to SEZ units and developer
(c) supply of goods regarded as Deemed Exports
(d) refund of taxes on purchases made by the UN or embassies etc. under Section 55 of CGST Act, 2017
(e) refund arising on account of judgment, decree, order, or direction of the Appellate Authority Appellate Tribunal, or any court
(f) refund of accumulated Input Tax Credit on account of inverted rate structure
(g) finalization of provisional assessment
(h) refund of pre-deposit
(i) tax paid in excess/by mistake
(j) refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India (not notified yet)
(k) refund of tax paid in the wrong head under Section 77 of CGST Act, 2017 & Section 19 of IGST Act, 2017 (treating the supply as intra-state supply which is subsequently held as inter-state supply and vice versa)
(l) refund on account of any other reasons
Refund Provision for Zero-Rated Supplies
There is a provisional refund of 90% of the total refund claim available in the case of zero-rated supplies. Once the application is acknowledged, individuals will receive the refund within 7 days. The individuals found involved in tax evasion exceeding Rs 250 Lakh or prosecuted during any period of five years immediately preceding the refund period would not be granted the provisional refund.
Payment of the Wrong Tax
There is a possibility that a taxable person has paid the wrong taxes such as integrated tax instead of central tax or state tax or inversely. In such cases, no interest is charged and the refund is claimable.
Refund to UN Bodies & Other Notified Agencies
UN Bodies and other notified agencies under section 55 of the CGST Act 2017, can claim a refund on the taxes paid on the purchases. Any taxable person dealing with such bodies and making supplies can charge the tax due and remit the same to the government account.
International tourist refers to any person who stays in India for less than 6 months for legitimate non-immigrant purposes though it has not been notified yet.
What to Expect from GST Refunds?
The application will be scrutinized within 30 days after the successful completion. Once the application is approved by the authorities, the amount refunded will adjust the cash ledger, and the “carry forward input tax credit” will be reduced eventually.
You would receive the refund electronically might be through NEFT, RTGS, or ECS. In case the refund amount is below Rs 1000, individuals are not provided any refund.
Before the authorities sanction a refund, a pre-audit process is conducted to verify the excess claims. In the case of “Unjust Enrichment” when the applicant is considered unsuitable for the refund, the refund amount is transferred to a “Consumer Welfare Fund”.
To claim your refunds, let TaxDunia be your partner. Our dynamic team of seasonal professionals will make it a piece of cake for you so that you can receive the justified GST Refunds. File your GST returns.
