How to claim Provisional refund under GST – Step by step procedure to claim provisional refund under GST

1.0 Introduction

Provisional refund is one of ways to promote ease of business in India. The concept of provisional refund is very special because it provides liquidity business so early on the basis of certain documents.

Let us understand how one can claim provisional refund under GST.

2.0 Grant of provisional refund (only in case of exports)

1. In the case of any claim for refund on account of export of goods and/or services made by registered taxable persons, other than such category as may be notified, the proper officer may refund 90% of the total amount so claimed on provisional basis subject to some conditions and restriction.

2.1 Conditions to claim the provisional refund

1. The provisional refund can only be claim in case of export of goods and/or services.

2. The refund shall be granted to the person only if he has not been prosecuted for any offence under the Act or under an existing law where the amount of tax evaded exceeds two hundred and fifty lakh rupees during last 5 years.

3. The refund amount shall exclude any amount of input tax credit provisionally accepted.

Meaning of provisionally accepted Input tax credit (ITC)

Any credit of input tax claimed, as self-assessed in his return, such amount shall be credited to his electronic credit ledger is known as provisionally accepted input tax credit.

4. No proceeding of any appeal, review or revision is pending on any of the issues which form the basis of the refund and if pending, the same has not been stayed by the appropriate authority or court.

2.2 Initial verification and order of refund by Proper Officer

1. The proper officer shall conduct a scrutiny of the claim and the evidence submitted in support of provisional refund.

2. After the scrutiny, if he is satisfied that the amount claimed as a refund on a provisional basis is due to the applicant, he shall make an order in FORM GST RFD-4, sanctioning the amount of refund due to the said applicant on a provisional basis.

3. He shall pass the order within a period not exceeding seven days from the date of the acknowledgement.

4. The proper officer shall issue a payment advice in FORM GST RFD-8, for the amount sanctioned under sub-rule (2) to be electronically credited to any of the bank accounts of the applicant mentioned in his registration particulars and as specified in the application for refund.

3.0 Final order sanctioning refund

Once provisional refund is finalized, then order sanctioning final refund shall be made as per the following criteria;

1. Where, upon examination of the application, the proper officer is satisfied that a refund is due and payable to the applicant, he shall make an order in FORM GST RFD – 5, sanctioning the amount of refund to which the applicant is entitled.

2. In case where the amount of refund is completely adjusted against any outstanding demand under the Act or under any earlier law, an order giving details of the adjustment may be issued in FORM GST RFD-6.

Cases where refund is not admissible

1. Where the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the amount claimed as a refund is not admissible or is not payable to the applicant, he shall issue a notice in FORM GST RFD-7 to the applicant.

2. He shall require him to furnish a reply within fifteen days of the receipt of such notice and after considering the reply, make an order in FORM GST RFD-5, sanctioning the amount of refund in whole or part, or rejecting the said refund claim and the said order shall be made available to the applicant electronically.

3. However, no application for refund shall be rejected without giving the applicant a reasonable opportunity of being heard.

4.0 Refund to be paid to applicant

1. Where the proper officer is satisfied that the amount refundable is payable to the applicant, he shall make an order in FORM GST RFD-5 and issue a payment advice in FORM GST RFD-8, for the amount of refund to be electronically credited to any of the bank accounts of the applicant mentioned in his registration particulars and as specified in the application for refund.

5.0 Refund to be paid to Consumer Welfare Fund

1. Where the proper officer is satisfied that the amount refundable under is not payable to the applicant, he shall make an order in FORM GST RFD-5 and issue an advice in FORM GST RFD-8, for the amount of refund to be credited to the Consumer Welfare Fund.

6.0 Conclusion

If you have any query, you can email the same to info@hubco.in.

Related Links:

• GST Registration
• GST Return Filings
• GST Software

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