The Goods and Services Tax (GST) is an indirect tax system that has replaced many indirect taxes in India. GST has brought a lot of changes to the way businesses to operate in India. One of the key aspects of GST is the refund process. In this blog, we will discuss the key aspects of GST refunds that you need to know in GST training courses.
GST Refund Process
GST refunds are initiated when the amount of tax paid by a taxpayer is more than the tax liability. The refund process in GST involves filing an application with the GST authorities. The application should contain all the necessary details such as the amount of tax paid, the period for which the refund is claimed, and other relevant details.
Once the application is filed, the GST authorities will verify the details provided in the application. The verification process may involve an audit or inspection of the taxpayer’s records. Once the verification is complete, the refund amount will be credited to the taxpayer’s bank account.
Key Aspects of GST Refunds:
1. Time limit for claiming refunds
The time limit for claiming GST is two years from the relevant date. The relevant date refers to the date of payment of tax. If the refund is not claimed within the prescribed time limit, the taxpayer will not be eligible for a refund.
2. Eligibility for GST refunds
A taxpayer is eligible for GST refunds in the following cases:
If a taxpayer exports goods or services, he is eligible for a refund of the tax paid on the exported goods or services.
b. Inverted tax structure:
If the tax paid on inputs is more than the tax liability on the output, the taxpayer is eligible for a refund of the excess tax paid.
c. Deemed exports:
If a taxpayer supplies goods to a recipient who is eligible for a refund of the tax paid on such supplies, the taxpayer is eligible for a refund of the tax paid on such supplies.
d. Refunds on account of assessment or provisional assessment:
If a taxpayer has paid tax in excess of the tax liability on account of assessment or provisional assessment, he is eligible for a refund of the excess tax paid.
3. Documents required for claiming GST refunds
The following documents are required for claiming GST refunds:
a. Export invoices
b. Shipping bills
c. Proof of payment of tax
d. A statement containing the details of exports
e. A statement containing the details of input tax credit availed
f. A statement containing the details of the tax liability and tax paid
4. Time limit for granting GST refunds
The time limit for granting GST refunds is 60 days from the date of receipt of the refund application. Interest is payable to the taxpayer if the refund is not granted within the prescribed time limit.