March 21, 2023

Refund claim should not be rejected due to deficiency of GST network/software

In general, if a refund claim has been filed by a taxpayer in the prescribed form and manner and all required documents have been submitted, then it should not be rejected solely on the grounds of a deficiency in the GST network or software. The GST law provides that if a refund claim is not rejected within 60 days from the date of filing of the claim, it shall be deemed to have been sanctioned.

However, if the refund claim is found to be inadmissible on other grounds, such as non-fulfillment of the conditions for claiming a refund, or if the claim is fraudulent or incorrect, then it may be rejected after due verification and examination.

It is important for taxpayers to ensure that they provide all the required information and documents accurately and in a timely manner when filing a refund claim, to avoid any delay or rejection of the claim.

The GST system has faced various technical glitches since its inception, leading to difficulties for taxpayers in filing returns and claiming refunds. In this context, the Central Board of Indirect Taxes and Customs (CBIC) has clarified that no refund claim should be rejected due to a deficiency of the GST network or software.

According to the GST law, a taxpayer is entitled to claim a refund of any unutilized input tax credit or excess payment of tax. The refund claim needs to be filed in the prescribed form and manner, along with supporting documents.

However, due to technical glitches, taxpayers have faced issues in filing refund claims, which have led to rejections or delays in processing. In such cases, the CBIC has clarified that the rejection of a refund claim cannot be solely based on the deficiency of the GST network or software. The authorities must consider the merits of the refund claim and provide an opportunity to the taxpayer to rectify any technical issues.

The CBIC has also advised taxpayers to exercise due diligence while filing refund claims, such as ensuring the correct filing of returns, reconciling the input tax credit with the electronic credit ledger, and providing accurate supporting documents.

In addition, the CBIC has taken several measures to address the technical issues faced by taxpayers, such as regular updates to the GST system, a help desk for technical assistance, and a grievance redressal mechanism.

Overall, the CBIC's clarification provides relief to taxpayers who have faced challenges in claiming refunds due to technical issues with the GST system. It underscores the need for a robust GST network and software, as well as the importance of providing timely and effective support to taxpayers.

Meaning of the "deficiency of GST network/software"

The "deficiency of GST network/software" refers to any issues or errors that arise due to technical glitches or inadequacies in the Goods and Services Tax Network (GSTN) or the GST software used by taxpayers. These issues may prevent taxpayers from completing their required filings or may cause errors in the calculation of tax liabilities or refund claims.

Can a refund claim be rejected due to a deficiency of GST network/software

As per the GST law and circulars issued by the GST authorities, a refund claim cannot be rejected due to a deficiency of the GST network/software. Refund claims are processed on the basis of the documents and information furnished by the applicant, and the GST authorities are required to verify the details and process the refund as per the provisions of the law.

If there is any discrepancy or deficiency in the documents submitted, the GST authorities may seek clarification or additional information from the applicant. However, the rejection of a refund claim solely on the ground of a deficiency of the GST network/software is not permissible.

In case a refund claim is wrongly rejected due to such reasons, the applicant may approach the concerned GST authority or appellate authority for redressal of their grievance.


Q: What is the meaning of the "deficiency of GST network/software"?

A: The GST network/software refers to the technology infrastructure used by the GST department for the processing of GST returns and related activities. A deficiency in the GST network/software means any technical glitch, downtime, or system failure that prevents the processing of refund claims submitted by taxpayers.

Q: Can a refund claim be rejected due to a deficiency of GST network/software?

A: As per the GST law, a refund claim cannot be rejected due to a deficiency in the GST network/software. If a refund claim is otherwise eligible for processing and the only reason for its rejection is the deficiency in the GST network/software, it cannot be rejected. The GST department must make all efforts to address any technical issues in the GST network/software and ensure that refund claims are processed in a timely and efficient manner.

Q: What can a taxpayer do if their refund claim is rejected due to a deficiency of GST network/software?

A: If a refund claim is rejected due to a deficiency of GST network/software, the taxpayer can file a representation with the GST department explaining the issue and requesting the refund claim to be processed. If the representation is not addressed, the taxpayer can approach the GST ombudsman or other appellate authorities for relief.

Q: What are the other common reasons for the rejection of refund claims?

A: Some common reasons for the rejection of refund claims include:

1. Non-submission of supporting documents or information

2. Incorrect details in the refund claim or supporting documents

3. Excess or ineligible input tax credit claimed

4. Non-fulfilment of conditions for claiming refund

5. Non-reconciliation of GST returns and financial statements

It is important for taxpayers to ensure that they meet all the conditions and requirements for claiming a refund and provide all the necessary supporting documents and information to avoid rejection of refund claims.


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