TaxTMI 
TaxTMI 
Regarding Guidelines for Refund Processing under the HGST Act -Standard Operating Procedure for manual application and processing.
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....& Taxation Commissioners (Appeals) in the State of Haryana. 3. The Senior Deputy Accountant General (Audit), Haryana, Chandigarh. 4. PS/ACSET. Endst. No. 1647/GST-III, Panchkula, dated the 25-05-2018 A copy alongwilh a copy of guidelines regarding refund under HGST Act is forwarded to the following in the Head Office for information and necessary action:- 1. All the Addl. Excise and Taxation Commissioners. 2. All the Jt. Excise and Taxation Commissioners. 3. The Jt. Director (L-)-I and II. 4. The Dy. Excise and Taxation Commissioners. 5. DA-I and II. 6. DDA-I & II. 7. PS/PA to ETC. Superintendent(GST) For Excise & Taxation Commissioner, Haryana. ============= Document 1 2018 Refund under GST Standard Operating Procedure 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 vi....
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....pplied (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 abroad at the time of their departure from India Standard Procedures for Refunds First of all, the standard procedure for processing of refunds needs to be elaborated. The whole process of refunds under GST has been designed so as to bring about standardisation in the processing of all types of refunds to the extent possible. The forms have been standardised like forms for making claims of refunds, deficiency memo, show cause notice, sanctioning refunds etc. Therefore, standard step-by-Step Procedure for Refunds is described as under: A. Application Form Presently, refunds applications are being processed manually. Therefore, procedures described hereunder confined to manual processing of refunds only. All persons seeking refunds have to apply for refunds in the form GST RFD-01A, which are to be processed manually. The refund application in format GST RFD-01A is not applicable in the following categories: • Refunds by UN agencies or embassies Page 3 Refund of Inte....
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....n 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 regard to its completeness, a deficiency memo in form GST RFD-03 communicating the deficiencies shall be issued. The applicant can file his refund application afresh by making good the deficiencies and mentioning the same ARN number and debit entry, if any, as in his original application within 30 days of communication of the deficiency memo. The Proper Officer has to examine this application as a fresh application. Acknowledgement GST RFD-02 shall be issued if the deficiencies have been rectified. The stipulated time period for sanctioning the refund shall be counted from the date of G....
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....e Page 6 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-06 and payment advice in form GST RFD- 5 shall be issued accordingly. The Proper Officer shall adjust any amount which is due towards the applicant under the GST law or any of the laws subsumed in G....
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.... As has been stated above, an application for refund has to be accompanied with documents evidencing that the amount of refund is due to the applicant and to establish that the incidence of tax has not been passed on to any other person. Refunds under GST arise under various situations laid down in different provisions of law. So, major types of refund are described category-wise for its specifics. 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. Page 8 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 (....
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....r services to SEZ developer or Unit on payment of tax: In cases where supplies of goods or services are made to SEZ unit or SEZ developer, the supplier of goods or services shall file application for refund in form GST RFD-01A. In case of supplies of goods to SEZ unit or SEZ developer, the goods should have been admitted in full in the SEZ for authorized operations which will be endorsed by the Specified Officer of the Zone. In case of supplies of services to SEZ unit or SEZ developer, receipt of the services for authorized operations shall be endorsed by the Specified Officer of the Zone. Therefore, the application for refund under this category shall be accompanied with following documents: . A declaration to the effect that SEZ unit or SEZ developer has not availed of the 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 regardin....
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....redit 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 seeking refund on his zero rated supply) will be entitled to refund of credits on inputs or input services other than those on which his supplier has taken the benefit of deemed export and which have been used in making zero-rated supplies. The amount of such credit will be excluded from the net ITC. Explanation: Similarly, Sub-rule (4B) of rule 89 of GST Rules provides that a person will be entitled to refund of credits on inputs on which suppliers have availed the benefits of concessional rate of tax for supply to exporters of 0.05% and 0.01% under State GST and Integrated GST respectively when used in making zero-rated supplies of goods. Such persons shall also be entitled to refund of other credits of inputs or input services to the extent of used in making such exports. However, the amount of such credits will be excluded from the net ITC used for computation of amount of refund. "Turnover of zero-rated supply of goods" means the value of zero- rated supply of goods....
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.... 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 in full and its matching. The undertaking shall be submitted manually along with the application in form RFD-01A. The applicant shall have to submit statement prescribed as Statement- 1 and statement 1A of form RFD-01A. C. Refund arising from Deemed Export: The Government has notified certain supplies of goods as deemed export under section 147 of the GST law. Rule 89(1) of GST Rules allows both, recipient or the supplier, to apply for refund of tax paid on such deemed export supplies. In case the refund is sought by supplier, an undertaking has to be submitted by the recipient to t....
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....efund 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 Page | 15 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 which have been received from suppliers who have avail concessional rate of tax @ 0.05%/0.1%, are allowed to export the goods only under LUT/Bond but cannot export on payment of integrated tax. However....