How to Claim Your Tax Refund Under GST? A Comprehensive Guide

How to Claim Your Tax Refund Under GST? A Comprehensive Guide

With the implementation of the GST regime, many tax formalities have been standardized. With GST, the process of taxation and tax refund gets more simple. Tax refund process under GST offers a clearer and efficient tracking system which is based on the invoices. It authenticates every transaction on an individual basis and facilitates systematic checking on each transaction.

What is Tax Refund Under GST?

In simple words, the situation in which GST is paid more than the actual amount, the registered taxpayer gets liable to claim its refund. As mentioned above the process of claiming tax refund has been standardized under GST regime which has eliminated the confusion and hassle.

Through this online process, one can claim the refund within the stipulated time. Generally, the tax refunds include the following things:

  • Refund of tax on all the goods and services exported out of India.
  • Refund of tax on the input of goods which is exported out of India.
  • Refund of tax on the deemed exports, and
  • Refund of tax as of Unused Input Tax Credit.

When a Taxpayer Can Claim for Tax Returns

There are many situations when a person can claim the tax refund. Following are some cases of claiming tax returns:

  • In a case when a registered taxpayer pays excess tax.
  • In the case when a registered supplier accepted wrong taxability on supply erroneously. For e.g. Considering inter-state supply in place of intra-state or vice-versa.
  • When UNO or its agency has made purchasing on which GST has been paid, in such case tax refund can be claimed by them.
  • A taxpayer can also pay GST on the goods when GST on input is more than out.
  • If a person has paid tax on goods of Zero-Rated supply, then the tax can be claimed.
  • If the foreign or an international tourist paid GST, the refund is such case is subjected to refund.
  • The tax refund also is claimed post provisional assessment.
  • Tax can be refunded in the case when out is being tax exempted or is listed as nil-rate and tax has been paid on such outputs.

What is The Process of Claiming Tax Refund Under GST?

The process to claim tax refund under GST has been set. The standardize tax refund process compact with the following steps:

  • Visit the official GSTN portal. Fill the required application form to claim the refund.
  • After you file the application on the portal you will receive an e-mail or SMS with an acknowledgment number.
  • Post the acknowledgment all your return and cash ledger will be adjusted. The carry-forward input tax credit will also be reduced automatically.
  • Within 30 days after filing refund application the authorities will also be scrutinized the application and other provided documents.
  • If the authority does not qualify your refund, it will be shifted to Consumer Welfare Fund.
  • There will be a pre-audit process in case of excess refund claimed.
  • Refund of tax will be done.
  • Tax refund will be claimed electronically in the applicant’s account.

When can an Applicant Submit Application for the Tax Refund?

The best time for a registered taxpayer or an individual to submit their application is the end of each quarter. This time has been set under the standardized process of the tax refund.

What Are the Different Forms of Application of Tax Refund?

Form No. Particulars 

GST RED-01 

Application for Refund 

GST RED-02 

Form for the acknowledgment at GSTN common portal 

GST RED-03 

Communication of Deficiencies 

GST RED-04 

It is a provisional form used in ordering the sanction of a refund amount 

GST RED-05 

Advice of Payment 

GST RED-06 

Final Order Sanctioning the amount of refund 

GST RED-07 

The order giving details of adjustment of outstanding demands with the refund amount 

GST RED-08 

A form/ notice to be filled in case the refund is unsatisfactory. 

GST RED-09 

The reply to the notice issued. 

GST RED-010 

The applications filed by the embassies and such organization. 

Who Are Eligible to Claim Refund on Unutilized Income Tax Credit

Input Tax Credit is that amount which a taxpayer can claim while filing income tax return. There are certain eligibility criteria for claiming Input Tax Credit:

  • The one who exports goods and/or services.
  • Supply to Sez unit or developer
  • It can be claimed when the rate of tax on input is more the rate of tax on the outputs.

Is There Any Time Limit for Claiming Tax Refund?

Yes, to claim the refund on tax under GST, there is a time limit and it is 2 years from the relevant date.

The thing to notice here is that the relevant date varies in each case. Following are different cases and the relevant dates.

  1. In case of excess GST payment – Date of Payment
  2. In case of completion of provisional assessment – Date on which tax is adjusted.
  3. In case of deemed export of Goods and Services. - Date of Loading/ Dispatched
  4. In the case where ITC is gathered as output – Last date of the financial year.

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