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FAQ on GST refund claim

1)  Can I claim refund of GST input tax?

You can claim refund of GST paid on inputs in two scenarios:

1. 1. Inverted duty structure where the GST rate on inputs is more than GST rate on output (other than nil rated or exempt supplies)
   2. Zero rated supplies of goods or services where supplies are made under LUT or Bond. Also including claim of refund of IGST paid. Zero rated supplies consist of export of goods and services, and supplies to SEZ unit.

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2)  How to claim refund of unutilized input tax credit?

A registered GST user can claim refund of unutilized input tax credit at the end of any tax period. For example, end of financial year in which a claim for refund of ITC arises.

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3)  How to claim GST refund?

You can claim GST refund by applying in Form RFD-01 within two years from the date of payment.

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4) What is the time limit for filing application for GST refund?

You need to file an application for GST refund within two years from the date of payment. You should apply for GST refund in Form RFD-01. In case where the refund exceeds Rs 2 lakh, RFD-01 should be annexed with a certificate from a Chartered Accountant or Cost Accountant.

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5) How to calculate refund amount on account of unutilized ITC?

The method of calculating GST refund in different scenarios is (under Rule 89 of CGST rules):

1. 1. Refund amount on account of unutilized ITC in case of zero-rated supplies:
      Refund amount = [Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services] / Adjusted total turnover X Net ITC
   2. Refund amount on account of unutilized ITC in case of inverted duty structure
      Refund amount = [Turnover of inverted rated supply of goods and services / Adjusted total turnover X Net ITC] – Tax payable on such inverted rated supply of goods and services

Note: (1) Value of zero-rated supply of goods is the value of goods supplied under a LUT or bond; or value calculated at 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the Page 93 of 161 supplier, whichever is less.

Note: (2) Zero-rated supply of services is the aggregate of the payments received during the relevant period for zero-rated supply of services and zero-rated supply of services whose supply was completed, for which payment had been received in advance in any period prior to the relevant period reduced by advances received for zero-rated supply of services for which the supply of services has not been completed during the relevant period

Note: (3) Adjusted Total Turnover means the sum total of the turnover in a State or Union territory excluding the value of exempt supplies and supplies in respect of which refund was already claimed.

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The final order on GST refund should be issued within 60 days from the date of receipt of refund application.

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7) Which GST input tax credits are not eligible for refund?

You cannot claim refund of unutilized GST ITC in the following cases:

1. 1. Goods exported outside India which are subject to export duty
   2. Supplier claims drawback of central tax or a refund of IGST paid on the supplies

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8) Can I get interest on GST refund claim?

The GST refund claimed should be processed within 60 days from the date of the application. In case the amount claimed is not refunded within 60 days, interest at 6% p.a becomes payable from the expiry of the 60 days until the date of refund.

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9) What are the situations in which you can claim GST refund?

A claim for GST refund can arise in the following situations:

1. 1. Export of Goods or services
   2. Supplies to SEZs units and developers
   3. Deemed Export supplies
   4. Refund of taxes on purchase made by UN or embassies etc
   5. Refund arising on account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court
   6. Refund of accumulated Input Tax Credit on account of inverted duty structure
   7. Finalisation of provisional assessment
   8. Refund of pre-deposit
   9. Excess payment due to mistake
   10. Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India
   11. Refund on account of issuance of refund vouchers for taxes paid on advances against which goods or services have not been supplied
   12. Refund of CGST & SGST paid by treating the supply as intra-State supply which is subsequently held as inter-State supply and vice versa

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The documents required for making a GST refund claim are:

1. 1. Statement of relevant invoices consisting of the number and date of the invoices (in case of refund of accumulated ITC)
   2. Statement containing number and date of shipping bills or bills of export. Also, the number and date of export invoices (in case of refund on account of exports)
   3. FIRC or bank realization certificates evidencing receipt of payment in foreign currency (for exports)
   4. In case of supplies to SEZ, an endorsement from proper officer evidencing supplies to SEZ. And a declaration from the SEZ unit that the unit did not claim input tax credit on the supplies.
   5. Reference number of order or judgment of Tribunal or Court giving rise to the claim for refund
   6. Self-declaration that the incidence of tax was not passed to any other person (for refund claim of less than Rs 2 lakh). Refund claims exceeding Rs 2 lakh should be certified by a Chartered Accountant or Cost Accountant

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