GST Refund
- What is GST refund?
Usually when the GST paid is more than the GST liability a situation of claiming GST refund arises. The process is online and time limits have also been set for the same.
You can set-off excess payment of GST from liability arise in next month. So we suggest you to apply for GST refund only if you want to close your business.
- When can the refund be claimed?
There are many cases where refund can be claimed. Here are some of them –
Excess payment of tax is made due to mistake or omission.
- Dealer Exports (including deemed export) goods/services under claim of rebate or Refund
- ITC accumulation due to output being tax exempt or nil-rated
- Refund of tax paid on purchases made by Embassies or UN bodies
- Tax Refund for International Tourists
- Finalization of provisional assessment
- How to calculate GST refund?
Let’s take a simple case of excess tax payment made.
Mr. B’s GST liability for the month of September is Rs 50000. But due to mistake, Mr. B made a GST payment of Rs 5 lakh.
Now Mr. B has made an excess GST payment of Rs 4.5 lakh which can be claimed as a refund by him. The time limit for claiming the refund is 2 years from the date of payment.
- What is the time limit for claiming the refund?
The time limit for claiming a refund is 2 years from relevant date.
The relevant date is different in every case.
Here are the relevant dates for some cases –
Reason for claiming GST Refund | Relevant Date |
Excess payment of GST | Date of payment |
Export or deemed export of goods or services | Date of dispatch/loading/passing the frontier |
ITC accumulates as output is tax exempt or nil-rated | Last date of financial year to which the credit belongs |
Finalization of provisional assessment | Date on which tax is adjusted |
Also if refund is paid with delay an interest of 24% p.a. is payable by the government.
- How to claim GST refund?
The refund application has to be made in Form RFD 01 within 2 years from relevant date.
The form should also be certified by a Chartered Accountant.
You can file your returns very easily using ClearTax GST Software.
Sign-up now and try it yourself.
