TaxTMI 
TaxTMI 
GST Refunds An Introduction Overview
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....ST Refunds An Introduction Overview<br>By: - YAGAY andSUN<br>Goods and Services Tax - GST<br>Dated:- 15-7-2025<br>1. Introduction The Goods and Services Tax (GST) regime envisages the seamless flow of credit through the taxation chain. Nevertheless, certain taxpayers-such as exporters, zero-rated service providers, or those caught in inverted duty structures-often experience accumulated Input Tax....
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.... Credit (ITC) beyond utilisation. For such businesses, seeking a refund is not merely beneficial-it is fundamental to upholding cash flow and ensuring fair taxation. 2. Meaning & Legal Definitions Under Section 54 of the CGST Act, 2017, a "refund" is defined as the repayment of tax erroneously or excessively paid, or of ITC that remains unutilised, subject to specified conditions and procedure. ....
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.... Additionally: * IGST paid exports allow refund of tax paid; * Exports without payment (under LUT/Bond) enable ITC refund; * Other categories include supplies to SEZ/EOUs, inverted duty scenarios, and more. 3. Refund Scenarios: With IGST vs. Without Tax 3.1. With IGST Payment (Section 54(3)) * Exporter pays IGST, sells goods abroad. * Applies for refund of IGST post-export. * Timelin....
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....e: Bank credit within 60 days from complete application; 90% may be disbursed provisionally within 7 days. Interest at 6% per annum applies beyond 60 days 3.2. Without IGST Payment Under LUT * Exporter exports zero-rated supplies without IGST via LUT. * Claims refund of unutilised ITC under rule 89(4): * Refund = (Turnover of zero-rated supplies x Net ITC) / Adjusted Total Turnover 4. Calc....
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....ulation Formula (Rule 89(4)) Refund Amount = (A + B) x C / D - A = Turnover of zero-rated goods (without tax) - B = Turnover of zero-rated services (without tax) - C = Net ITC availed during the period - D = Adjusted Total Turnover during the period 5. Claim Procedure * Submit Form RFD-01 (refund application). * For provisional refunds, submit RFD-02. * Upload supp....
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....orting documents: * Shipping bills, LUT/Bond copies, invoices, FIRC, etc. * For IGST-paid exports: shipping bill validation via ICEGATE; certificate of tax payment. * Bank account validated via PFMS. * Processing: Customs handles IGST-paid refunds; jurisdictional offices handle LUT-based ITC refunds. * If delays: interest applies; system may auto-flag or require follow-ups. 6. Integrati....
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....on Issues: ICEGATE & ECCS * Accurate export data from ICEGATE is critical. * Mismatches between GSTN returns (GSTR-1/GSTR-3B) and ICEGATE shipping bills (errors like SB001, SB006) often result in refund delays. * Lack of full integration between ICEGATE and ECCS (Express Cargo Clearance System) may complicate verification, especially for courier exports. 7. Supplementary Claims * Suppleme....
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....ntary refunds-for example, additional IGST when export prices rise-are permitted. * As per Circular No. 226/20/2024-GST (dated July 11, 2024), exporters can claim refunds on additional IGST paid due to post-export price revisions. * Process: file Form RFD-01 under "Any Other" category, attaching contracts, debit notes, FIRC, CA certificate, shipping bills, statements 9A/9B. 8. Time ....
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....Limits & Limitations * General rule: refund must be filed within two years from the "relevant date" as explained in Section 54 and Rule 89 of CGST. * For additional IGST claims, filing deadline is two years from July 11, 2024 (or from relevant date if later). * Minimum claim threshold: ?1,000 - claims below this are non-refundable. 9. Bottlenecks & Common Hurdles * Data mismatch....
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....es between GSTR-1, GSTR-3B, and ICEGATE shipping bills. * Technical errors (portal glitches, JSON errors, delay in RFD-02 processing). * PAN/Aadhaar mismatches delaying pre-application procedures. * Non-integration between ECCS & ICEGATE, causing courier-export verification delays. 10. Departmental Clarifications & Circulars * Notification 01/2023-IGST: default export under LUT; IGST rout....
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....e permissible only for notified goods/services. * Circular 24/2023-Customs: Customs must block non-compliant IGST routes. * Circular 226/20/2024-GST: outlines supplementary IGST refund procedure. * Cross-check circulars: Circulars regarding eligible/ineligible refund amounts, verification requirements (Rule 46, 48). 11. Conclusion The GST refund regime ensures neutrality and fair play, esp....
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....ecially for exporters and taxpayers stuck with unutilised ITC. While the law offers a well-defined framework-covering both IGST-paid and LUT-driven refunds-a number of procedural hurdles persist: data mismatches, portal errors, system integrations, and tight timelines. Key takeaways for taxpayers: * Ensure perfect reconciliation across returns and ICEGATE. * File refunds within statutory dead....
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....lines. * Monitor for technical or system-related errors promptly. * Leverage supplementary claims, where applicable. * Stay updated with CBIC circulars for seamless compliance. With meticulous preparation and compliance, GST refunds can meaningfully improve working capital and yield rightful tax relief. For detailed case-specific advice, consult a GST expert or tax professional.<br> Scholar....
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....ly articles for knowledge sharing by authors, experts, professionals ....