December 17, 2021
Timely refund mechanism is essential in tax administration, as it facilitates trade through the release of blocked funds for working capital, expansion and modernization of existing business. Thus, under the GST regime, there will be a standardized form for making any claim for refunds. The claim and sanctioning procedure will be completely online and time-bound, which is a marked departure from the existing time consuming and cumbersome procedure. Situations Leading to Refund claims in GST The relevant date provision embodied in Section 54 of the CGST Act, 2017, a provision contained in Section 77 of the CGST Act, 2017 and the requirement of submission of relevant documents as listed in Rule 1(2) of Refund Rules is an indicator of the various situations that may necessitate a refund claim. A claim for refund may arise on account of:
  • Export of goods or services
  • Supplies to SEZs units and developers
  • Deemed exports
  • Refund of taxes on purchase made by UN or embassies etc.
  • Refund arising on account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court
  • Refund of accumulated Input Tax Credit on account of inverted duty structure
  • Finalization of provisional assessment
  • Refund of pre-deposit
  •  Excess payment due to mistake
  • Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India
  • Refund on account of issuance of refund vouchers for taxes paid on advances against which, goods or services have not been supplied
  • Refund of CGST & SGST paid by treating the supply as intra State supply which is subsequently held as inter-State supply and vice versa.
Thus, practically every situation is covered. The GST law requires that every claim for refund is to be filed within 2 years from the relevant date.

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