How To Claim A GST Refund In India?

One must know about India’s GST refund, applicable rules, and the eligibility criteria to avail it. In the beginning, one must understand what the GST refund is. Once a person/business is clear about the real meaning, he or she can proceed to know the process to claim a refund for GST and other things.

When looking for how to claim a GST refund in India, you must read the content to know all the applicable rules. All the information regarding the application, documents, and order are discussed below.

GST Refund: Application

As per the GST return India rules, A business entity or person claiming the tax/ interest refund needs to file a proper application in the “Form GST RFD-1” to avail the rebate just before two years expiry from the date of relevant. In simple terms, one can refer to the time of relevance in each refund case as per the given points*:

• Exported goods by the medium of post: The applicable date is the goods dispatch date initiated by the post office. 
• Exported goods by the medium of land: The relevant date is the date of the products on which it passed the frontier land. 
• Exported goods by the medium of air or sea: The relevant date was the date when the aircraft or ship left India wherein all the products were kept.
• Exported services where the service supply was completed in advance of the payment receipt: The critical date is the payment receipt date.
• Exported services where the advance payment is received before the invoice issuing date: The relevant date is when the invoice is issued.
• ITC (Input tax credit) unutilized: The critical date is the financial year-end date on which the tax refund claim is raised.

*If there’s a case of a regular person/dealer, then the refund claim for the e-cash ledger balance should be made with the monthly return filing of “Form GSTR-3.” And if there’s a case of a composition person/dealer, then the refund claim must be initiated using the “Form GSTR-4.” 

Documents necessary for the refund

For the refund claim, one must know the documents required as per the different cases mentioned-below:

• If the claimed refund amount is made as a tax refund lower than 5 lakhs INR, then the person needs to file a declaration as per the evident documents acquired with him. The papers must certify that the interest/tax incidence is not related to someone else.
• If the claimed refund amount is made as a refund more than 5 Lakhs INR, then there must be the following documents accompanied by the refund application:

1. Evident document indicating that the GST applicable refund is due for the person claiming for it.
2. Evident document indicating that the paid amount was made from his or her side, and the interest/tax incidence is not laid upon someone else.

GST Refund: ITC

Want to know about the GST Input Tax Credit refund on the unutilized credit? For this, you can learn all the necessary information from below:

The refund amount must be of:

• E-credit ledger balance at the refund filing time.
• E-credit ledger balance at the time when the refund filed period ends.

GST Refund: Reaching to the order

If the claimed amount of refund is on the exported goods/services account, the authorized person must make a refund of 90% of the total claimed refund amount as per the “Form GST RFD-4.” It will be done in provisional terms. After the documents verification is done, the authorized person needs to initiate the release of an order for the refund claim final settlement amount.

For the provisional grant of refund, some conditions subjected to it might be*:

• The refund claim is initiated by the person who doesn’t stand in the list of tax evasion prosecutors for an amount above 250 Lakhs INR in the preceding period of 5 years. 
• No existence of pending, revision, or review appeal is present for the refund amount.

*No claim will be initiated when the amount claimed by a person/business is below 1,000 INR.