Is Refund Claim Under GST for tax and ITC is allowed?

Narendra Kumar

31 Mar, 2021

Yes, the refund claim under GST for tax and ITC is allowed fulfilling all the requirements embedded in it. To claim any refund under GST, first, make sure you have GST Registration. Without GST registration you will not be allowed to claim any refund in tax or ITC.

Getting GST Registration in India is a very simple job that can be done in no time. Furthermore, the Government has given the facility of online GST Registration where you can get your GST registration while sitting on your sofa.

The GST bill issued in Rajya Sabha on 4^th April 2017 has made some changes in revised GST model law^[1] that was released in November. Today in this article we will tell about the refund claim under GST for tax and ITC is allowed or not?

Three major topics will be covered in this article on the refund that is as follows-

1. The time limit for filing the refund claim
2. Refund of Input Tax Credit under GST cases and exceptions
3. The situation for payment of the refund under GST to the applicant

What is a Refund claim under GST for Tax and Input Tax Credit?

1. The Time period allowed for filing the refund claim
   

Any person who claims for refund of the GST tax or any interest paid should file an application within a time period of two years from the date of using the form GST RFD-01 electronically. Any person who has GST registration may claim the balance that is available in the electronic cash ledger by just filing the return on prescribed dates stated by GST council.

Into the bargain, not only Indian companies but an agency of the United Nations Organization or any Multilateral Financial Institution notified under the United Nations, Consulate or foreign embassies can also claim a refund under GST on the inward supply of goods or services or both. To claim that refund, an application has to be filed for the refund before the expiry of 6 months from the last day of the quarter in which such goods or service were received.

2. Refund of ITC cases and the Exceptions

We all are aware of the GST Registration process very well so there is no need to spent time on that. Therefore, the Refund of an Input Tax Credit under GST can be claimed in the following two ways-

1. You can claim a refund on Zero-Rated Goods or Services on which no payment of tax was made
2. Accumulation of Unutilized ITC where higher tax paid on inputs as compared to outputs

However, no refund is allowed for unutilized ITC under the following situations-

1. In case of excise duty, the unutilized ITC for GST paid on goods exported out of India attracting the excise duty,
2. If the supplier of the goods has availed the duty drawback on the excise duty paid or claim the refunds on the integrated tax paid or claims the refund on the integrated tax paid on the supply.

The application process for claiming the refund shall include the followings-

1. Documentary evidence that establishes that a refund is due to the applicant
2. Such documentary or evidence, proving that the amount of tax or interest is paid by the applicant and that he has not passed the tax burden on another person.

Furthermore, if the amount of refund claimed is less than 2 lakhs then the taxpayers can file an application based on the documentary or other evidence after certifying the incidence of such tax that it is not passed to any other person.

3. Situations for Payments of Refund to the applicant

The Refund amount claimed by the applicant is related to-

1. Refund paid on zero-rated supplies of goods or services or both or on input or inputs services used in making such zero-rated supplies
2. Refund of tax paid on the supply of foods and services that were provided wholly or partially and the invoice was not issued
3. Refund of tax paid in excess due to confusion in any transaction being an interstate or in state
4. The tax and the Interest if any or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person or the tax or interest borne by such other class of applicants as the government may on the recommendations of the Council by notification specify

You can easily claim your refund claim under GST for tax and ITC.

Read our article:TDS and TCS Provisions are notified under GST