Manner of processing and sanction of withheld IGST refunds

As per the provisions of the Central Goods and Services Tax Act, 2017, the manner of processing and sanction of withheld IGST refunds is as follows:

1. Once a taxpayer has filed a claim for IGST refund, the tax authorities will verify the eligibility of the claim and the amount to be refunded.

2. If the tax authorities are satisfied that the refund is eligible, they will sanction the refund and issue an order for the same.

3. In some cases, the tax authorities may withhold the refund temporarily for verification of certain documents or details provided by the taxpayer.

4. If the tax authorities are not satisfied with the documents or details provided, they may initiate an inquiry and seek additional information from the taxpayer.

5. If, after conducting the inquiry, the tax authorities are satisfied with the eligibility of the claim and the amount to be refunded, they will sanction the refund and issue an order for the same.

6. If the tax authorities are not satisfied with the eligibility of the claim, they may reject the refund claim and issue a show cause notice to the taxpayer.

7. If the taxpayer does not respond to the show cause notice or the response is unsatisfactory, the tax authorities may reject the refund claim and issue an order for the same.

In cases where the refund has been withheld, the tax authorities may take the assistance of the Internal Review Cell to identify any issues or bottlenecks in the refund process and ensure that the refund is processed in a timely and efficient manner.

Time limit for processing and sanctioning IGST refunds

As per the provisions of the Central Goods and Services Tax Act, 2017, the time limit for processing and sanctioning IGST refunds is two years from the relevant date. The relevant date is defined as follows:

1. For exports, the relevant date is the date on which the shipment of goods is made;

2. For supplies made to a Special Economic Zone (SEZ) unit or developer, the relevant date is the date on which the payment is received and the return is furnished;

3. For supplies made to a merchant exporter, the relevant date is the date of the invoice;

4. For supplies made on payment of integrated tax under reverse charge, the relevant date is the date of payment of tax.

The two-year time limit for processing and sanctioning IGST refunds includes the time taken for verification of documents and information furnished by the taxpayer. If the refund is not processed and sanctioned within the two-year time limit, the taxpayer is entitled to receive interest at the prescribed rate on the amount of refund due.

Role of the Goods and Services Tax Network (GSTN) in processing IGST refunds

The Goods and Services Tax Network (GSTN) plays a crucial role in processing IGST refunds. It is responsible for developing and maintaining the IT infrastructure for the implementation of the Goods and Services Tax (GST) regime in India.

When a taxpayer files an application for IGST refund on the GST portal, the GSTN verifies the details provided by the taxpayer and forwards the refund claim to the respective jurisdictional tax authority. The tax authority is responsible for verifying the authenticity of the claim and the documents submitted by the taxpayer.

Once the tax authority approves the refund claim, it sends the approved refund amount to the GSTN. The GSTN then credits the approved amount to the taxpayer's bank account through the electronic payment system.

The GSTN also maintains a record of all the refund applications and the status of their processing, which can be accessed by the taxpayer on the GST portal. This helps the taxpayer to track the status of their refund application and take appropriate action if there is any delay or discrepancy in the processing of the refund.