Rules of a Refund claim under GST

Goods and service tax has been introduced as a more effective and efficient way for manufacturers and exporters.

What is the GST refund?

A person registered under Goods and Services Tax has to pay tax. But when the payment exceeds the tax liability, the Goods and Services Tax refunds the extra amount in tax paid by the registered person there. This is called a GST refund or money withdrawal under this tax system. And this process is called the GST money back process. Here, is an example which we take to understand it batter.

Example of GST refund:

When a person is registered under GST, he has to pay GST tax under this tax system. Suppose the tax liability for the person for September is Rs 50000. But due to mistake, he gets a tax payment of Rs 5 lakh. This means that an additional GST payment of Rs 4.5 lakh can be claimed by them as a refund. The deadline for claiming payment is 2 years from the date of payment.

Where is the GST refund claimed?

Under GST, a standardized system for claiming GST refunds has been established. The entire GST refund is claimed and processed online on the GST portal. But the same can be claimed for GST money back. Who is eligible for this otherwise you can be fined. So make sure before applying for a GST refund that Are you eligible to claim or not?

Who are eligible for a GST refund?

According to the rule of the GST refund, there can be many causes or incidents in which a person is responsible for the refund of GST money. A detailed list of these cases is given below so that a person can know whether he/she can apply for a GST refund or not.

  • When a person has an export transaction where he has a cumulative balance of input tax credit or claim process exemption for such export transaction he/she get GST refund as per GST refund for exporters.
  • When a registered person has paid additional GST due to some misunderstandings then the person is also eligible for a GST refund.
  • When a registered person paid GST for goods that were exempted from taxes and thus the person has a total input credit deposit in the GST bookkeeping system, the person is also eligible for a GST refund.
  • When a person who has a GST Registration, submitted a deposit against the appeal mail by the defendant, then he will get back the amount which has been dissolved after the appeal is resolved or as part of his GST refund.
  • When imminent, the officer receives an input credit to the registered persons’ GST claim ledger account, then that amount will be presented as his refund.
  • When a GST registered person is selling goods at lower tax rates and paying a higher tax rate then he is eligible for a GST refund.
  • GST payment made by foreign nationals or international tourists is refundable.

When can a GST refund be claimed?

As per the GST refund rule, there are many cases where a refund can be claimed. Here are some of them –

  • An additional payment of tax is made due to mistake or omission.
  • Dealer exports under claim for rebate or refund on goods/services
  • Input tax credit system due to tax exemption or blue-retired output
  • Tax refund for international tourists
  • Provisional assessment finalized
  • Refund of the tax which has paid on purchases made by UN bodies or embassies.

Legal salaah provides the service of GST registration and GST return filing if you want to take these services you may contact on 8766393412 legal salaah experts team will assist you.

What is the duration of the GST refund?

After paying GST return, a person fined, that some extra money has reached him while paying GST by mistake. So he can claim additional GST made as a refund within 2 years from the date of payment as per GST rules. This means that if additional tax is paid in November 2019, applications of GST refund can be submitted by November 2021.

IMPORTANT: That is, according to the rule of refund, the claim for a GST refund or GST refund can be made within 2 years not anymore.

Relevant dates according to the situation for GST refund

Whenever we apply for a refund of GST, we do so under some circumstances, their time limit has also been fixed as per the rules of GST refund. This depends on their circumstances. Based on some circumstance, the following relevant date is given.

  1. In the situation of Goods exported by sea or air the Relevant date is the day on which a ship or aircraft is loaded into luggage leaves India.
  2. In the case of Land exports the “relevant date” is the date on which the limit of the good is passed.
  3. In the case of Post exported goods, the relevant date is shipping date by the concerned post office.
  4. In the case of Services exported, where service delivery is completed before payment is received the “relevant date” is the Payment received to date.
  5. In case of Services exported, where payment has already been received before the date of issue of the invoice the “relevant date” is Invoice issue date.
  6. In case of Inappropriate input tax credit the “relevant date” is the end of the financial year in which the claim for tax refund arises.

What are the required documents for the GST refund?

At that time while applying for a GST refund. First of all, it is mandatory to have a document for which the person is withdrawing money. So that the person can check that he is eligible for a GST refund. So when the registered person claims to return the money, the papers should follow:

  • Customer GSTIN
  • Bill type
  • Place of supply
  • GST Bill Number
  • Date of invoice
  • Taxable value
  • GST rate
  • HSN Code

How to get a refund under GST?

There can be many mistakes while filing GST challan for GST payment. Due to which the GST registered person has to pay additional GST also. This additional amount is shown as equilibrium in the electronic cash ledger.

The balance in the electronic cash ledger can be claimed as a refund by submitting the refund application form RFD-01. This is done online on the GST Portal / GSTN.

What is the procedure to claim a GST refund?

To know about the process of the GST refund claim please wait for the next article of legal salaah. You will learn about the process in the next article or you may visit Legalsalaah.com to learn about the process to claim GST refund.

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