System-Based Risk Scoring and Provisional Refund Mechanism for Zero-Rated and Inverted Duty Structure Claims (Effective 01.10.2025)

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.... The 56th meeting of the Goods and Services Tax Council held on 3rd September 2025, recommended amendment in rule 91(2) of CGST Rules, 2017 to provide for sanction of 90% of refund claimed on provisional basis by the proper officer on the basis of identification and evaluation of risk by the system. In addition, a proviso has been inserted in rule 91(2) to provide that, on case-by-case basis, where the proper officer is of the opinion that in a particular case, provisional refund should not be granted, he can, for reasons to be recorded in writing, instead of grant of refund on provisional basis, proceed with detailed examination of the application. Further, vide notification No. 14/2025-Central Tax dated 17.09.2025, category of register....

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....017, whereby the officer, for reasons to be recorded in writing, may proceed with the examination of the application in accordance with the provisions of rule 92, instead of grant of refund on provisional basis. d. For refund applications, which are not categorised as "low-risk" by the system, refund shall not be sanctioned on provisional basis and in such cases, the proper officer shall proceed with detailed scrutiny of refund application and further action as per the extant guidelines. 3.2 The statutory conditions prescribed for grant of provisional refund, including non-eligibility of the notified category of registered persons under section 54(6) vide notification No. 14/2025-Central Tax dated 17.09.2025, the requirement und....

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....74A of the CGST Act, as is presently being done. 4. As the amendment in rule 91(2) of CGST Rules, 2017 has been notified vide notification No. 13/2025-Central Tax dated 17.09.2025 to come into effect from 01.10.2025, therefore the provisions related to risk-based sanction of provisional refund shall be applicable for all refund applications filed on or after 01.10.2025. 5. It is worthwhile to note that the GST Council, in its 56th meeting, has also recommended amending Section 54(6) of the CGST Act, 2017, to provide for sanction of 90% of the refund amount claimed on provisional basis, in case of refund claims filed on account of inverted duty structure (IDS), similar to the provisions in place for zero-rated supplies. However, the sa....