Regarding Guidelines for Refund Processing under the HGST Act -Standard Operating Procedure for manual application and processing.
1645/GST-III, 1646/GST-III, 1647/GST-III Dated:- 25-5-2018 Haryana SGST
GST – States
Excise & Taxation Commissioner,
Haryana, Panchkula.
Memo No. 1645/GST-III,
dated: 25-05-2018
Order
Subject: Regarding Guidelines for Refund Processing under the HGST Act -Standard Operating Procedure for manual application and processing.
MEMORANDUM
Please find enclosed herewith a copy of guidelines regarding refund under HGST Act -Standard Operating Procedure for manual application and processing on the basis of various relevant provisions under HGST Act, Rules, Notifications and Circulars. It is requested to bring this to the knowledge of all the assessing authorities working under your control for their information and necessary action.
Endst. No. 1646 GST-III, Panchkula, dated the 25-05-2018
A copy alongwith a copy of guidelines regarding refund under
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for manual
application and processing
Prepared by:
Excise & Taxation Department
Govt. of Haryana
INTRODUCTION
Efficient Processing of refunds is extremely critical for any tax
administration in view the fact that any inefficiency in relation thereto may
stress the capital inflow of the whole economic cycle. On the other hand, it is
imperative upon the tax authorities to exercise utmost vigil while processing
the refund applications so that the public exchequer is not imperiled.
GST is a technological driven tax administration and is still at a very
nascent stage of implementation. Feedbacks from various quarters keep
pouring in regarding difficulties being faced by the various stakeholders in
its implementation. Taxing authorities of the state, in particular, are seeking
guidance and clarifications on various issues related to the provisions of the
law for effective processing of the refund applications and the procedure
associated thereto. Hence these guidelines.
Th
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different provisions of GST law are
tabulated as under:-
(i) Export of Goods or Services or both
(ii) Supplies of Goods or Services or both to SEZs units and SEZ
developers
(iii) Deemed Export supplies
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(iv) Refund of accumulated Input Tax Credit on account of zero-
rated supplies or inverted duty structure
(v) Refund arising on account of judgment, decree, order or
direction of the Appellate Authority, Appellate Tribunal or any
court
(vi) Excess payment due to mistake
(vii) Refund of pre-deposit
(viii) Refund of CGST & SGST paid by treating the supply as Intra-
State supply which is subsequently held as Inter-State supply
and vice versa.
(ix) Refund on account of issuance of refund vouchers for taxes paid
on advances against which goods or services have not been
supplied
(x)
Finalisation of provisional assessment
(xi) Refund of taxes on purchase made by UN or embassies etc
(xii) Refunds to International tourists of GST paid on goods in India
and carried a
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egrated tax on export supply of goods to a place
outside India
Any refund related to balance lying in electronic cash register in
accordance with sub-section 6 of section 49 can be made through return
furnished for the relevant period.
All applications for refunds have to be filed within two years of the
relevant date.
The application for refund should be accompanied by such
documentary evidence which establishes that: (i) the refund is due to the
applicant and, (ii) to the effect that refund claimed by the applicant was
collected from, or paid by, him and the incidence of such tax and interest has
not been passed on to any other person.
B. Submission of the Application:
The application for refund shall be filed in FORM GST RFD-01A on
common portal. The print-out of the application form RFD-01A, as submitted
on the national portal, shall be submitted manually to the jurisdictional
Proper Officer with all the necessary documentary evidences within the
stipulated time.
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or
processing of refund application shall be counted from such date.
In case where the refund relates to claim arising from electronic cash
register, an acknowledgment GST RFD-02 shall be issued online from the
portal itself.
In all other cases (other than seeking refund from electronic cash
ledger), the Proper Officer shall examine the application in form GST RFD-
01A for its completeness in terms of sub-rule (2), (3), (4) of Rule 89. The
Proper Officer shall validate the GSTIN details on the portal to see whether
return has been filed. A declaration has to be filed by the claimant to the
effect that no refund has been claimed against the relevant invoices. This
process of examination of GST RFD-2 has to be completed within a period of
15 days of filing the application. If the application for refund GST RFD-01A is
found to be complete as described above, the acknowledgment, GST RFD-02
shall be issued.
In case, any deficiency is noted in the course of examination with
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refund amounting to 90% of the total refund claimed. The provisional refund
has to be paid within seven days after giving the acknowledgement, GST RFD-
02.
The persons who have been prosecuted in the last five years for any offence
under the GST law or any other law subsumed in GST, for an amount
exceeding 2.5 Crore, are not eligible for provisional refund.
The Proper Officer shall examine the application and on being prima
facie satisfied that the amount of refund claimed by the applicant is due to
him, shall make an order in the FORM GST RFD-04 sanctioning the
provisional refund within a period not exceeding seven days from the date of
GST RFD-02.
The amount of provisional refund shall be calculated by taking into
account total ITC without making any reduction for credit being provisionally
accepted.
The Proper Officer shall also issue a payment advice in the form GST
RFD-05 for the sanctioned amount which shall be credited electronically to
any of the accounts of t
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he
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applicant may respond to this notice by furnishing a reply in FORM GST RFD-
09 within 15 days of receipt of notice.
So, it is advised that Show Cause notice in form GST RFD-08, if
required, be issued within a period of 35 days of date of GST RFD-02 so that
whole process is completed well within the time limit of 60 days.
The Proper Officer shall pass an order in FORM GST RFD-06, after
considering his reply, sanctioning the amount of refund in whole or part, or,
rejecting the said refund claim.
The amount of provisional refund shall be adjusted accordingly.
In case, Proper Officer is satisfied that the amount of refund is not
payable to the applicant under the provisions laid down under section 54(8),
the sanctioned amount of refund shall be credited to the consumer welfare
fund (CWF).
In case where Proper Officer is satisfied that the amount of sanctioned
refund relates to applicant under the provisions of section 54(8), the
sanctioning order in form GST RFD-
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ed amount in relation to Central tax,
Integrated tax, Cess shall be made by Central tax authorities and in relation to
state tax by the State tax authorities. So, the refund orders issued by the State
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tax authorities or the Central tax authorities shall be communicated to the
counterpart concerned tax authorities within seven days for the purpose of
payment of the relevant sanctioned amount of refund.
It should be ensured that the timeline specified under section 54(7) of
the GST law (60 days) and the Rule 91(2) of the GST rules( 7 days for
provisional refund) be adhered to.
F. Withholding of Refunds:
Refund amount found due to any applicant can be withheld under the
provisions of sub section (10) or (11) of section 54 of GST law. A refund
amount of any person can be withheld if he has defaulted in furnishing any
return or has not paid any amount of tax, interest or penalty which has not
been stayed by any court, Tribunal or Appellate Authority. Refunds in this
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ecifics.
A. Refunds arising from Zero-Rated Supplies
The refunds arising from zero rated supplies constitute one of the
major categories of refunds. Zero rated supply has been defined under
Section 16 of the Integrated Goods and Services Tax Act, 2017. Zero rated
supply includes supplies of goods or services or both in the course of export
and to Special Economic Zone (SEZ) Developer or Special Economic Zone
Unit.
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The supplier of zero rating supplies will be entitled to claim input tax
credit in respect of supply of goods or services or both even though the
supplies might be non-taxable or exempted supplies.
Every supplier making zero rated supplies has two options: (i) either
he can make his supplies under bond/LUT and claim refund on accumulated
input tax credit; or (ii) he can make his supplies on payment of integrated tax
and claim refund thereof.
GST law also provides for grant of provisional refund amounting to
90% of the total refund claimed by applicants
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d tax.
(v) Supply of goods or services or both to SEZ Developers or SEZ
Unit without payment of Integrated tax under Bond/ LUT
(i) Export of services outside India on Payment of Integrated Tax: In this
case, the supplier will first pay integrated tax on his supplies of services
outside India in the course of export. The supplier is entitled to refund of
the amount of integrated tax paid on such supplies. The applicant will file
his application in form GST RFD-01A along with the statements containing
number and date of invoices and relevant Bank Realization Certificate
(BRC) or Foreign Inward Remittance Certificate (FIRC). The statement has
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been prescribed as Statement 2 attached with GST RFD-01A. The receipt
of payment by the supplier in foreign convertible exchange is
prerequisite for supply of service in the course of export.
Export of Services) with
payment of tax (Refund of IGST
paid on export of services)
Copy of FORM GST RFD-01A filed on
common portal
Co
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input tax credit of the tax paid by the supplier
In case of supply of goods, a statement containing number and date
of invoice along with evidence regarding endorsement of Specified
Officer of the Zone to the effect that goods have been admitted in
SEZ for authorized operations
âš« In case of supply of services, a statement containing number and
date of invoice along with evidence regarding endorsement of
Specified Officer of the Zone to the effect that services have been
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received in SEZ for authorized operations and the details of
payment and the proof therof
Statement 4 attached with GST RFD-01A has been prescribed for such
persons.
(iii), (iv) & (v) Refund of Unutilized Credits of Inputs and Input Services
on account of Zero-rated supplies: The refund of unutilized credits of
input and input services on account of zero-rated supplies shall arise
when supplies of goods or services are made without making payments of
Integrated tax in the course of export o
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file a declaration to this effect as evidence.
In case the amount of refund exceeds Rs.2 lakh, a certificate to the effect
that incidence has not been passed on to any other person issued by CA
should be submitted by the applicant along with his application.
Provisional refunds shall be granted in such cases as has been explained in
the foregoing paras.
The amount of refund in these cases shall be computed by formula
explained here as under:
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Refund Amount = (Turnover of Zero -rated supply of
Goods + Turnover of Zero-rated supply of services) X Net
ITC/Adjusted Total Turnover.
Where,-
“Refund amount” means the maximum refund that is admissible;
“Net ITC” means input tax credit availed on inputs and input services
during the relevant period other than the input tax credit availed for
which refund is claimed under sub-rules (4A) or (4B) or both of Rule
89 of the GST Rules;
Explanation: Sub-rule (4A) of rule 89 of GST Rules provides that a
person (the supplier
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s made during the relevant period without
payment of tax under bond or letter of undertaking, other than the
turnover of supplies in respect of which refund is claimed under sub-
rules (4A) or (4B) or both;
“Turnover of zero-rated supply of services” means the value of
zero-rated supply of services made without payment of tax under
bond or letter of undertaking, calculated in the following manner,
namely: Zero-rated supply of services is the aggregate of the
payments received during the relevant period for zero-rated supply of
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filed.
services and zero-rated supply of services where supply has been
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;
“Adjusted Total turnover” means the turnover in a State, as defined
under clause (112) of section 2, excluding –
(a) the v
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. The refund of accumulated credits on
account of inverted duty structure is also not admissible in such cases as are
notified by the Government on the recommendation of the Council.
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Refunds of inverted duty structure shall be filed for a tax period on a
monthly basis or quarterly basis for those taxpayers who are filing quarterly
returns for having turnover less than 1.5 Crore.
It is to be ensured that a valid return in form GSTR-3B is filed for the
last tax period before the one in which refund is filed.
Persons applying for refunds must give an undertaking to the effect
that the mount of refund sanctioned would be paid back to the Government
with interest in case the requirement of clause (c) of sub-section (2) of
section 16 read with sub-section (2) of section 42 of the GST law, are not
fulfilled.
Clause (c) of sub-section (2) of section 16 read with sub-section (2) of
section 42provies that credit shall be admissible only on payment of tax by
the supplier
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supplies along with the application form.
A statement in FORM Statement 5B of GST RFD-01A is required to be
furnished for claiming refund from deemed export supplies.
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D. Refund on account of payment of wrong tax
Refund is also admissible to persons who happen to make payment in
the wrong account of tax. A person may make payment in the account of
integrated tax whereas it was to be paid in the account of state GST or Central
GST and vice versa. Similarly, a person can make payment in the account of
CGST whereas it was required to be paid in account of State GST and vice
versa. Section 77 of GST laws and section 19 of IGST provide that this amount
shall be refunded.
However, no interest shall be charged and refund shall be allowed
without subjecting it to the provisions of unjust enrichment.
E. Refund from orders, pre-deposits, advances etc.
Refund arising from an order of Appellate Authority, Tribunal, or Court
should be accompanied with reference number of the
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Refund of Integrated Tax paid on export of goods or services is also not
admissible to such persons who have received supplies on which the
supplier has availed of the benefit of deemed export supplies.
D. It may be noted that refund of input tax credit, availed only in respect
of inputs received under concessional rate of tax of 0.05% each for
Central GST and State GST or 0.1% under Integrated Tax is allowed
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when used for making zero rated supplies of goods. However, input tax
credit arising from other inputs or input services used in making such
exports shall be allowed.
E. No refund of unutilized input tax credit shall be permitted in cases
where refunds of integrated tax are claimed on the goods or services
exported out of India or supplied to SEZ unit or SEZ developer.
F. No refund of unutilized input tax credit shall be permitted in cases
where the goods exported out of India are subjected to export duty.
G. It may be noted that exporter of such goods whi
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law.
iii) Refund of tax paid on supplies which is not provided, either
wholly or partly, and for which invoice has not been issued, or
where refund voucher has been issued.
iv) Refund of tax under section 77 of GST law
v) The tax and interest, if any, or any other amount paid by the
applicant, if he had not passed on the incidence of such tax and
interest to any other person.
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vi) The tax or interest born by such other class of applicants as the
Government may notify on the recommendation of the council.
These guidelines have been prepared on the basis of the provision of
GST law, Rules, Notifications and various Circulars to assist the State Taxing
Authorities in due discharge of their duties towards processing of refunds.
All the State Taxing Authorities are advised to carefully go through and
understand all the provisions relating to GST law, Rules and Notifications
made thereunder as well as Circulars issued by CBIC in relation to refund
processing. These C
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