Refund of Advance

[Ashiesh Prremji]

Dear Sir,

As per Circular No. 137/07/2020 dated 13 April 20, it is clarified that we need to go for Refund through Form RFD-01 in case of refund of Advances on which we paid GST & subsequently its cancelled before issuing Invoice. GST has been paid on gross value of advance (Ex - Adv Received 1000, GST 180), will there any issue in refund process ?

AI Summary

GST Refunds on Canceled Advances: Use Form RFD-01 for Refunds if Amount Returned, Per Circular No. 137/07/2020. A query was raised regarding the refund process for Goods and Services Tax (GST) paid on advances that were later canceled before issuing an invoice. The discussion referenced Circular No. 137/07/2020, which suggests using Form RFD-01 for refunds. Respondents agreed that the GST paid on the advance is refundable if the amount received is returned to the customer. They emphasized filing the refund as an excess payment of tax and confirmed that there should be no issues if the refund process is followed correctly.