GST Refunds processing!

What are the steps involved in processing the refund application?

Listed below are the steps involved in processing the refund application:

1. Applicant files the refund application on the GST Portal in Form GST RFD-01. Such application will be available on the Dashboard of Tax Official as a pending work item.

2. The refund application filed by the applicant has to be processed by the Refund Processing Officer.

3. The Refund Processing Officer will scrutinize the application and attachments filed by the applicant.

On the basis of scrutiny of the refund application filed by the applicant, if the refund application is found to be complete in all aspects, Acknowledgement in Form GST RFD-02 will be issued by the Refund Processing Officer, within 15 days from the date of filing of the refund application. 

Based on scrutiny of the refund application and attachments filed by the applicant, in case, any deficiencies are noticed in the refund application, a Deficiency Memo will be issued in Form GST RFD-03 on the refund application by the Refund Processing Officer. In case of issuance of a Deficiency Memo in Form GST RFD-03, there would be auto re-credit of the refund claimed amount in the Electronic Cash/ Credit Ledger if the ledger has been debited at the time of filing the refund application. In this case, the applicant needs to file a fresh refund application for the same period again, if needed, after rectification of the deficiencies mentioned in the deficiency memo.

4. The Refund Processing Officer can issue online notice for rejection of an application for refund or recovery of an erroneously granted refund for seeking any clarification in Form GST RFD-08 if required.

5. Applicant is required to furnish a reply to the notice (issued in Form GST RFD-08) in Form GST RFD-09 online on the GST Portal, within 15 days of issuance of notice.

6. Tax Official may issue a Provisional Refund Order in Form GST RFD-04 within 7 days from the date of acknowledgment up to 90% of the refund claimed amount if the applicant is eligible to get a provisional refund. The refund Processing Officer can issue a Provisional Order in Form GST RFD-04 in the following cases:

• Refund in case of export of services with payment of tax
• Refund of accumulated ITC on account of export of goods/services under Bond/LUT without payment of integrated tax.
• Supplies made to SEZ Unit/SEZ Developer with payment of Tax
• Supplies made to SEZ Unit /SEZ Developer without payment of Tax

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7. The Refund Processing Officer will issue a Refund Sanction/ Rejection Order in Form GST RFD-06.

Note:

In case of refund applications, in which a provisional refund order has been issued in Form GST RFD-04, the final order Form GST RFD-06 will quantify the total sanctioned amount out of the claimed amount and the net balance amount will be sanctioned by issuing Form GST RFD-06, after further verification and examination of the application by the Tax Official.

In case of complete adjustment of refund towards any demand, the Refund Processing Officer may adjust it through Form GST RFD-06.

8. Payment Order needs be issued in Form GST RFD-05 after issuance of Form GST RFD-04 or Form GST RFD-06 in case of sanction of refund.

9. The sanctioned refund amount may be withheld by the Refund Processing Officer by issuing Form GST RFD-07 (Part B). In such case, Tax Official will not issue Form GSTRFD-05, till the withholding order is in operation.

10. Order for re-credit of the amount to Electronic Cash or Credit ledger on rejection of refund claim (Form GST PMT-03) is required to be issued in case if the ledger has been debited at the time of filing refund application for such amount and any amount of refund is marked as inadmissible/rejected by refund processing officer by issue of an Order in Form GST RFD-06.

What are the various tabs available to the Applicant on his dashboard after filing the refund application?

Listed below are the various tabs available to the applicant after filing the refund application

1. Applications: To view filed refund application details

2. Notice/ Acknowledgement: To view acknowledgment and notices issued by the Tax Official and file a reply to those notices

3. Replies: To view filed replies

4. Orders: To view orders issued by the Tax Official 

5. Audit History: To view the history details or action taken on refund application filed by the applicant

What are the various statuses while processing a refund application?

Listed below are the various statuses while processing refund applications: 

1. Acknowledged: When the Refund Processing Officer issues Acknowledgement in Form GST RFD-02

2. Deficiency Memo Issued: When the Refund Processing Officer issues a Deficiency Memo in Form GST RFD-03

3. Pending for Processing: When the applicant files a refund application and the same is pending for processing by the Refund Processing Officer

4. Provisional Order Issued: When the Refund Processing Officer issues a Provisional Order in Form GST RFD-04

5. Pending for Order-Reply Received: When taxpayer replies in Form GST RFD-09 to SCN issued by Tax Official in Form GST RFD-08

6. Pending for Order-Reply not Received: When a taxpayer doesn't reply in Form GST RFD-09 to SCN issued by Tax Official in Form GST RFD-08

7. Refund Applications Withheld: When the Refund Processing Officer issues a withheld order in Form GST RFD-07 (Part B).

8. Refund Rejected: When the Refund Processing Officer issues Form GST RFD-06 and the Refund claimed is rejected

9. Refund Sanctioned: When the Refund Processing Officer issues Form GST RFD-06 granting a Refund of the full amount, as claimed by the applicant

10. Refund Sanctioned Partially: When the Refund Processing Officer issues Form GST RFD-06 and the Refund sanctioned is less than the amount claimed by the applicant

11. Show Cause Notice Issued: When the Refund Processing Officer issues a Show Cause Notice in Form GST RFD-08 to seek any clarification from the applicant.

Conclusion

Understanding the step-by-step process of GST refund applications is essential for businesses to ensure timely and successful claims. From filing Form GST RFD-01 to receiving the final refund sanction or rejection, each stage involves specific forms, timelines, and compliance requirements. By keeping track of application statuses and responding promptly to notices, taxpayers can avoid unnecessary delays or rejections. 

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