Step By Step Guide to GST Refund Process

The GST refund process allows taxpayers to claim refunds on any excess GST paid. Businesses can file for refunds under various situations like exports, inverted duty structure, excess payment etc. The GST refund process involves filing the RFD-01 application on the GST portal along with supporting documents and tracking the status till receipt of the sanctioned refund amount.

In this blog, we explain the about the process step-by-step including the application, acknowledgement, processing, order and receipt of refund. We also cover the documents required, common reasons for rejection and how to file an appeal for rejected GST refund process claims.

Step-by-step guide to the GST refund process

Step 1: File GSTR-1 and GSTR-3B

The first step in the GST refund process is to file your GSTR-1 and GSTR-3B returns for the tax period in which you wish to claim the refund. Ensure all invoice details, input tax credit and tax liability is declared correctly in these returns. You can only file for refund after filing these returns.

Step 2: Prepare RFD-01

Access the refunds section on the GST portal and prepare form RFD-01. Select the type of GST refund process – export with or without payment of tax or claiming refund due to inverted duty structure. Provide relevant details like GSTIN, tax period, reasons for refund and the amount claimed.

Step 3: Enter Invoice Details

In Table 5 of the RFD-01, enter details of invoices on which GST refund process is claimed like GSTIN of recipient, invoice number, date, taxable value, integrated tax paid etc. The total refund amount should match amount claimed earlier.

Step 4: Attach Supporting Documents

Attach the required supporting documents based on the type of GST refund process:

• Exports – Shipping bill, export invoice, bank certificate etc.
• Inverted duty – Statement of invoices showing accumulation of input tax credit.
• Excess payment – Invoices, bank statements etc.

Step 5: Submit the RFD-01 Form

Preview all details in the RFD-01 thoroughly before submitting it on the GST portal. You will get an Application Reference Number (ARN) once submitted.

Step 6: Provisional Refund Order

The officer will process the GST refund process application and may issue a provisional refund order RFD-04 specifying the amount eligible as provisional refund.

Step 7: Receive Refund

The provisional refund amount gets credited to the bank account provided in the RFD-01. You will get the remaining refund after verification.

Step 8: Final Refund Order

Post verification of documents, the officer will issue a final refund process order RFD-06 on the portal. In case of any discrepancy, you may be asked to provide clarification or additional documents.

Step 9: File an Appeal

If the refund process claim is rejected, you can file an appeal with the Appellate Authority within 2 years from the date of rejection in Form GST RFD-09.

Refund Scenarios :

Let us understand the GST refund process in some common scenarios:

A) Zero Rated Supplies:

1. Export goods and file GSTR-1 and GSTR-3B.
2. File LUT for zero rating on GST portal if required.
3. File RFD-01 and select export without payment of tax as reason.
4. Attach shipping bill, export invoice, bank certificate as documents.
5. Follow remaining GST refund process steps outlined earlier.

B) Inverted Duty Structure:

1. File GSTR-1 and GSTR-3B showing input tax credit accumulation.
2. File RFD-01 and select inverted duty structure as reason.
3. Attach statement of invoices showing credit accumulation.
4. Follow remaining GST refund process steps outlined earlier.

C) Excess Payment of Tax:

1. Identify transactions where excess tax was paid.
2. File RFD-01 and select excess payment of tax as reason.
3. Attach invoices, bank statements showing excess tax payment.
4. Follow remaining GST refund process steps outlined earlier.

Key Recommendations :

Here are some key recommendations regarding the GST refund process:

• File accurate and timely GSTR-1 and GSTR-3B returns.
• Ensure invoice details match across returns and RFD-01.
• Attach all supporting documents evidencing eligibility.
• Carefully review RFD-01 before filing.
• Track status of GST refund process on the portal.
• Respond promptly to any deficiency memo.
• Provide additional information sought timely.
• Claim refund within the 2 year limitation period.

Conclusion

We hope this detailed step-by-step guide to the GST refund process helps you understand the procedures and timelines involved. Maintaining consistency of data and providing accurate information will help avoid rejection of claims.

Do reach out for any assistance on the GST refund process.