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How to Manually File GST Refund Claims

by Sanjeev Archak Sanjeev Archak No Comments

The Government of India is introducing new policies for the benefit of their nation last year in November government introduced Demonetization to prevent hoarding of black money and in July 2017 it introduced Goods and Services Tax, a group of indirect taxes which replaced a lot of indirect taxes levied by State and Central Government. In November 2017 in order to simplify the process of GST refunds, Government introduced a Circular No. 17/17/2017 stating the process of –“How to Manually File GST Refund Claims”. Here I will help you to understand the procedure in a better and easy way.

Manually File GST Refund

According to guidelines laid under GST act, tax on the exported goods and services are considered as Zero-rated supplies. It means there will be no GST levied on any of export items. However, Imported goods and services are taxable. Therefore, Exporters can claim refunds of the input taxes paid by them on imports. But it was a very cumbersome process, So in order to make it, stress-free Government has introduced a circular containing the procedure of how to manually file GST refund. CBFC in a circular mentioned that “the refund module is currently unavailable on the common portal, hence it has been decided by the higher authorities, that the application should be filed manually, till further orders.”

Therefore, in an exercise of the powers conferred by sub-section (1) of section 168 of the Central Goods and Services Tax Act, 2017 (‘the CGST Act) and in order to ensure uniformity, a table is given below with a procedure for the manually filing of the GST refund claims:

SI. No. Category of Refund Process of Filing
 1. Refund of Integrated Goods and Services Tax

(I GST) paid on export of goods

No separate application is required as shipping bill itself will be treated as an application for refund.
 2. Refund of IGST paid on export of services / zero- rated supplies to SEZ units or SEZ developers Take a hard copy of a FORM GST RFD01A  which needs to be filed manually with the jurisdictional officer (either of Centre or State) along with relevant documentary shreds of evidence, wherever applicable.
3. Refund of unutilized input tax credit due to the accumulation of credit of tax paid on inputs or input services used in making zero-rated supplies of goods or services or both FORM GST RFD-01A needs to be filed on the common portal. The amount of credit claimed refund would be debited in the electronic credit ledger and proof of debt needs to be generated on the common portal. The hardcopy of the form should be submitted to the GST officer of your jurisdiction with documentary evidence required (if applicable)

Here is a detailed explanation of the process.

  1. According to sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 (IGST Act) read with clause (i) of sub¬section (3) and sub-section (6) of section 54 of the CGST Act and rules 89 to 96A of the Central Goods and Services Tax Rules, 2017 (CGST Rules), a registered individual may make zero-rated supplies of goods or services or both on payment of integrated tax and claim refund of the tax so paid, under bond or Letter of Undertaking without the payment of integrated tax and manually file GST refund of unutilized input tax credit in relation to such zero rated supplies.
  2. The refund of integrated tax paid on goods exported out of a country is governed by rule 96 of the CGST Rules. The shipping bill filed shall be considered to be an application which shall be deemed to have been filed only when an export report is filed and the applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR-3B, as the case may be. The Customs shall process the claim for refund and an amount equal to the integrated tax shall be credited to the applicant’s bank account.

3.The application for refund of integrated tax paid on the zero-rated supply of goods to a Special Economic Zone unit or in case of zero-rated supply of services  is required to be filed in FORM GST RFD-01A (as notified in the CGST Rules vide notification No. 55/2017 – Central Tax dated 15.11.2017) and the form shall be submitted to the jurisdictional proper officer as you are manually filing GST refund, along with all necessary documentary evidence as applicable  within the time stipulated for the filing of such refund under the CGST Act.

  1. The application for GST refund of unutilized input tax credit on inputs good and services used in making such zero-rated supplies shall be filed in FORM GST RFD-01A on the common portal and the amount claimed as refund shall get debited in your bank account in accordance with sub-rule (3) of rule 86 of the CGST Rules from the amount in the electronic credit ledger to the extent of the claim.

5.If the administrative order is issued by the Chief Commissioner of Central Tax and State Tax by Commissioner, then a registered person needs to manually file the GST refund claim with the jurisdictional tax authority to which the taxpayer has been assigned. In case, there is no such order the registered person is at liberty to apply for a refund before the Central and State Tax Authority until the administrative mechanism of assigning taxpayers to their respective authority is implemented.

  1. An entry shall be made in a refund register of the jurisdictional proper officer in his/her office. Refer  the table given below for the entries to be made :
S. No. Applicant’s name GSTIN Date of receipt of application Period to which the claim pertains Nature of refund –Refund of
integrated tax paid/Refund of unutilized ITC
Amount of refund claimed Date of issue of acknowledgment in FORM GST RFD-02 Date of receipt of
complete application (as mentioned in FORM GST RFD-02)
1 2 3 4 5 6 7 8 9

Hence, this is how one can manually file GST refund in a quick and easy manner.

 

Get to Know About the Penalty for Late Filing of Service Tax Return [And More]

by Sanjeev Archak Sanjeev Archak No Comments

Every service provider in India is aware of service tax and many have at some point dealt with a penalty for late filing of service tax return. For those who are not aware, service tax is an indirect tax that is levied on the services provided by any service provider. Consumers are responsible for paying this service tax which is included in the invoice, and service providers are responsible for collecting it and paying it through the service tax return.

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GST FAQs on Composition Scheme

by Sanjeev Archak Sanjeev Archak No Comments

Our second part in the GST FAQs series deals with the Composition Scheme which was introduced under the Goods and Services Act keeping the best interests of small businesses in mind. SMEs often face the challenges of maintaining various compliances with the statutory bodies of the country in a timely manner.

Composition Scheme permits the taxpayer to choose for making GST payments as a fixed percent of the business turnover rather than paying those taxes under regular norms of the GST law.

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POEM Guidance For Companies Not Engaged in Active Business Outside India

by Sanjeev Archak Sanjeev Archak No Comments

Previously we discussed the parameters of determining a company to be considered as engaged in “active business outside India” and the POEM guidance associated with it. Today we talk about the guidelines for those companies that are not engaged in active business outside India.

POEM Guidance for companies not engaged in active business outside India

For companies not engaged in active business outside India, a two-stage process for the determination of Place of Effective Management is provided as follows:

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POEM Guidance For Companies Engaged in Active Business Outside India

by Sanjeev Archak Sanjeev Archak No Comments

In our previous post, we discussed the idea of Place of Effective Management and how it came into existence. Today we will be focusing on the POEM guidance for companies that are engaged in active business outside India.

Determination of “active business outside India”

A company shall be considered as engaged in “active business outside India” if the passive income is not more than 50% of its total income; and if the following conditions are met –

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Place of Effective Management Rules

by Sanjeev Archak Sanjeev Archak No Comments

The idea of Place of Effective Management or POEM was first introduced in the Finance Act 2015 for the purpose of determining the residential status of foreign businesses. As per the act, any business having its place of effective management in India will be considered as an Indian resident and accordingly, it’s global income will be taxable in India.17

But the Finance Act was missing the entire criteria and process for determining the place of effective management. For this purpose, the Central Board of Direct Taxes (CBDT) introduced the Guiding Principles for determination of Place of Effective Management (POEM) of a Company.

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Significance Of Having a Financial Plan For Your Business

by Sanjeev Archak Sanjeev Archak No Comments

You have always dreamt of starting a business of your own and finally, you got the right business idea which you are very enthusiastic and pumped up about. What’s the next step after this? What do all successful entrepreneurs have in common that makes them turn their small startup businesses into multi-million dollar companies? Well, one common advice that all these entrepreneurs would suggest is to have a sound financial plan for your business.

Planning is bringing the future into the present so that you can do something about it now.

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Valuation in GST – Rules for Supply of Goods or Services

by Sanjeev Archak Sanjeev Archak No Comments

Section 15 of the CGST Act and Determination of Value of Supply, CGST Rules, 2017 contains the provisions related to the valuation in GST for the supply of goods or services made in different circumstances and to different persons.

Valuation in GST

Every fiscal statue makes provision for the determination of value as the tax which is normally payable on ad-valorem basis. In GST also, the tax is payable on ad-valorem basis i.e percentage of value of the supply of goods or services.

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Accounts and Records under GST

by Sanjeev Archak Sanjeev Archak No Comments

Section 35 of the CGST Act and “Accounts and Records” Rules (hereinafter referred to as rules) provide that every registered person shall keep and maintain all records at his principal place of business. It has cast the responsibility on the owner or operator of warehouse or godown or any other place used for storage of goods and on every transporter to maintain specified records.

It also provides that every registered person whose turnover during a financial year exceeds Rs 1 crore shall get his accounts audited by a chartered accountant or a cost accountant.

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