New
Published on:
February 23, 2023
By
Pranjal Gupta

GST Refunds- What you should Know

Goods and Services Tax (GST) has brought significant changes to the indirect tax system in India. One of the significant changes is the introduction of the GST refund process. GST refund refers to the process of claiming a refund of the tax paid on goods or services or both.

The GST refund is a significant relief to the taxpayers as it ensures that there is no accumulation of taxes and the cash flows of the taxpayers are not impacted. In this article, we will discuss various aspects of the GST refund process, including the types of refunds, eligibility criteria, and the procedure to claim the refund.

Types of GST Refunds:

There are mainly two types of GST refunds:

Refund of GST on Export of Goods and Services:

The GST paid on the supply of goods or services or both for export can be claimed as a refund. This is known as the refund of the Integrated Goods and Services Tax (IGST).

Refund of Excess Input Tax Credit (ITC):

The GST paid on input goods or services can be claimed as a credit against the GST liability. In some cases, the ITC accumulated on account of inverted duty structure or exports can exceed the GST liability. The excess ITC can be claimed as a refund.

Eligibility for GST Refunds:

The eligibility for GST refunds depends on the type of refund claimed. The following are the eligibility criteria for the two types of GST refunds:

Refund of GST on Export of Goods and Services:

The following are the eligibility criteria for the refund of GST on exports:

Goods or services must have been exported out of India.

Export must have been made within the time limit specified under the GST law.

Invoice issued for the export must contain all the details required under the GST law.

Supplier must have filed all the GST returns.

Recipient of the export must not have claimed a refund of the IGST paid.

Refund of Excess Input Tax Credit (ITC):

The following are the eligibility criteria for the refund of excess ITC:

The ITC should have accumulated due to the inverted duty structure or export of goods or services or both.

ITC should not have been utilized for payment of any other tax liability.

Taxpayer must have filed all the GST returns.

Procedure to Claim GST Refunds:

The following is the procedure to claim GST refunds:

Refund of GST on Export of Goods and Services:

The refund of GST on export of goods and services can be claimed by filing GSTR-1 and GSTR-3B. The refund application can be filed either manually or through the GST portal.

Refund of Excess Input Tax Credit (ITC):

The refund of excess ITC can be claimed by filing Form RFD-01 on the GST portal. The refund application must be filed within two years from the relevant date.

Conclusion:

GST refund is an essential process that ensures the smooth flow of cash for the taxpayers. It is important to understand the eligibility criteria and the procedure to claim the refund to avoid any delays or rejections. It is also advisable to maintain proper documentation to support the claim for the refund.

Why do businesses need Swipe?

Swipe is a fintech SAAS startup with the fastest growth in India. 4L+ SMEs adore and employ its straightforward Invoicing, Payments & GST software. It quickly expanded to more than 5000 cities and attracted clients from all across India. It is renowned for its simplicity, usability, and high-priority customer care in all regional languages, including Tamil, Telugu, Kannada, Marathi, Bengali, Gujarati, and Hindi, among others

Suggestions

Ticker Tape: A Beginner’s Guide
Procedures of Export under LUT & Refund of IGST in GST Regime
Detailed Analysis of GST Applicability on YouTube Content Creator

Updated on:
May 4, 2023