GST Refund Process will be simplified
Expect the GST refunds process to become faster and simpler than past, soon. News agency PTI reports that a single authority for sanctioning and processing GST refunds is in the offing as the Finance Ministry looks to speed up and simplify the process for exporters. If the authority is set up, getting GST refunds would become hassle-free and faster than it was in the last few years.
The current mechanism entails a twin refund sanctioning authority of the central and state tax officers but that could well change by August when the proposed new structure involving a single authority comes in place.
As per the New system being worked out by the Revenue Department, the taxpayer will get full refund from his jurisdictional officer once the claim is sanctioned, while at the back-end the Centre and states will apportion the amount to be paid to each other.
Currently, once a taxpayer files refund claim with the jurisdictional tax authority, say the central tax officer, then he would clear 50 per cent of the claims, and the remaining is cleared by the state tax officers after further scrutiny.
A similar system is followed when a taxpayer approaches the state tax officers for Goods and Services Tax (GST) refunds.
Thus, the time taken to clear the entire refund amount gets longer, leading to liquidity crunch for exporters — an issue that the proposed single mechanism for refund clearing intends to fix.
Under the proposed ‘single authority mechanism‘, once a refund claim is filed with a tax officer, whether Centre or state, the officer will check, assess and sanction full tax refund (both Central GST and State GST portion), thereby removing difficulties faced by the taxpayers.
This will later get adjusted/settled amongst the two tax authorities through internal account adjustments.
Currently, the two authorities settling the same refund claims adds to unnecessary complexities and inconvenience for the taxpayers. It has been seen that even after sanction/payment of refund by concerned jurisdictional tax officer, the counterpart tax authority at times tends to delay the GST refund.
As per the formula for division of GST assessees decided by the GST Council, state tax officials administer and control 90 per cent of the assessees below Rs 1.5 crore annual turnover, and the remaining 10 per cent is with the central tax officers.
The Centre and states share control of those assessees with annual turnover of over Rs 1.5 crore in 50:50 ratio.
Experts commented that “A single window tax refund in a federal, democratic economy would be a massive jump in ease of doing business. Inter government tax adjustments have to be done on month-on-month basis to avert any possibility of temporary revenue deficit to a particular government.”
Currently, under the GST regime, there is a standardised form for making any claim for refunds.
The claim and sanctioning procedure is completely online.
When GST refund claim arise
As per the GST rules, a claim for refund may arise on account of –
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. Refund on account of issuance of refund vouchers for taxes paid on advances against which goods or services have not been supplied
11. Refund of CGST & SGST paid by treating the supply as intra-State supply which is subsequently held as inter-State supply and vice versa.
- Automated GST refund for exporters From June 2019
- Recredit of Rejected GST Refund Claim to Electronic Credit Ledger
- New Rule for Claiming GST Refund of Supply to SEZ from 01.02.2019
- GST Refunds – Analysis
- List of Documents required for GST Refund Processing
- Advisory for Taxpayers to file GST Refund for Multiple Tax period
- No refund of GST Challan payment if wrong GSTIN mentioned
- GST Refund Application (By Embassies/ International Organizations)
- How to file GST Refund Application (By Embassies/ International Organizations) user manual
- GST Refund of Excess amount from Electronic Cash Ledger : FAQ’s
- GST Refund on Export of Goods (With Payment of Tax) : FAQ
- GST Refund of Export of Services (With Payment of Tax)
- GST Refund of ITC paid on Exports without payment of Integrated Tax : FAQs
- GST Refunds Process in India – Analysis after CGST & IGST Act 2017
- How to File GST Refund Manually in India : Steps
- GST Refund of Supplies made to SEZ Unit/ SEZ Developer (Without Payment of Tax)
- GST Refund on Account of Supplies made to SEZ Unit/ SEZ Developer (With Payment of Tax)
- GST Refund of ITC accumulated due to Inverted Tax Structure (RFD-01A)
- GST Refund on Tax paid on an Intra-State Supply which is subsequently held to be Inter-State Supply and Vice Versa