GST Refund
Deliverables - Timeline
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Deliverables
Refund Monitoring and Compliance
Refund Report
GST Refund Reconciliation
Timeline
2 Days
(from receipt of all documents)
When to claim GST refunds?
Now you know the instances when you can claim a GST refund but do you know when should the refund be claimed?
The application for claiming a GST refund should be made within 2 years of the relevant date.
Who can claim a GST Refund?
GST refund would be payable to an applicant only when the amount is relevant to the following –
1. The amount is the refund of tax and interest thereon or any other amount which is paid by the applicant. Moreover, refund would be payable when the individual has not passed on the tax and interest thereon or any other amount to any other individual.
2. The amount is the tax or interest borne by specific individuals whose name has been notified by the State Government or the Central Government based on the recommendations made by the GST Council.
When is the refund paid by the Government?
After the application for GST refund is submitted by the applicant, the refund is usually paid within period of 60 days. If, however, the refund has not been paid within 60 days, an interest would have to be paid on the delayed refund. Such interest would be calculated on a rate specified by the Central or the State Government based on the recommendation of the GST Council. The period over which interest would be calculated would be from the expiry of the refund due date till the date that the refund is paid. For example, if a GST refund was filed on 1st July, 2019, the refund should be paid by the Government by 1st September, 2019. However, if there is a delay and the refund is paid by 1st December, 2019, interest would be charged for the three months over which the refund was delayed.
Scenarios where GST Refund is applicable?
1. Excess Payment of GST
Excess Tax Paid: If a business has paid more tax than its actual liability, it can claim a refund for the excess amount. This could happen due to mistakes in calculating GST on sales or purchases.
Double Payment: If a business makes the same payment twice or reports the wrong amount of tax, it is eligible for a refund of the excess tax paid.
2. Input Tax Credit (ITC) Refund
Unutilized ITC: If a business accumulates Input Tax Credit (ITC) and is unable to utilize it within a particular period (for instance, if the business is not making taxable supplies or is under a tax exemption), the unutilized ITC may be refunded.
Excess ITC Claimed: If the ITC claimed on purchases exceeds the output tax liability, and the excess ITC is not carried forward, a refund may be applicable.
3. Inverted Duty Structure
Zero-Rated Exports: Exports of goods and services are treated as "zero-rated" under GST, meaning no tax is levied on the exported goods/services. However, exporters are eligible to claim a refund of the input tax paid on goods or services used to produce the exported goods.
4.Export of Goods and Services
Higher Input Tax Than Output Tax: In some cases, the tax rate on input goods or services is higher than the tax rate on the output goods or services (known as inverted duty structure). For instance, if a business deals with goods that have a lower output tax rate, but the input goods have a higher tax rate, the business can claim a refund of the excess ITC
Refund of IGST on Exported Goods: If a business has paid IGST (Integrated GST) on exports, it is eligible to claim a refund of the IGST paid on those exports.
Refund of ITC on Exported Goods/Services: The business can also claim a refund for the ITC accumulated on input goods and services used for export purposes.
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FAQs
If you fail to file for your GST refund within the mentioned relevant dates, you would not be able to get the refund for the extra tax paid. Your input tax credits can also be blocked in future.
