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1) Refund scenarios in GST


A) Refund of unutilized Input tax credit allowed only in cases Sec.38(2)

(i) Exports of goods and services. It can be tax paid on the inputs used in the use of goods and services which are exported at zero rate or if tax is paid on such exports ; such tax

(No refund of Unutilized ITC, if goods exported outside India are subjected to export duty) (proviso to 38(2)

(ii) On account of accumulation of account of rate of tax on inputs higher than the rate of taxes on Outputs.(Credit accumulation due to output being tax exempt or nil-rated and Credit accumulation due to inverted duty structure i.e. due to tax rate differential between output and inputs). There will be no refund of ITC of goods lying in stock at the end of the Financial year. It is proposed to be carried forward.


B) On Finalization of provisional assessment under Sec.44A(5)

A dealer can apply for Provisional assessment u/s.44A after which the officer is bound to do final assessment. If on final assessment refund is due to the dealer, it shall be paid.


C) Refund of Pre – deposit for filing appeal including refund arising in pursuance of an appellate authority’s order (when the appeal is decided in favor of the appellant .

D) Excess payment of tax due to mistake or inadvertence:- Such excess payment may be on account of wrong mentioning of nature of tax/GSTIN/ of tax amount. In case of wrong mentioning of tax/GSTIN, the tax administration has to verify the correctness of tax payers claim while verifying the refund application filed by the him, which should be decided within the prescribed period. In case of wrong mentioning of tax, the refund of excess amount of tax, at the option of the taxpayer, would either be automatically carried forward or adjustment against future tax liabilities or be refunded.

E) Tax wrongfully collected and deposited with the Central or State Government.

A taxable person who has paid IGST/CGST/SGST mistakenly as an Interstate/intrastate supply, but the nature of which was subsequently clarified, then, upon payment of CGST and SGST in the appropriate State or IGST, he shall be allowed to take refund of the tax paid under the mistaken head, subject to Rules which will be made and provisions of Sec.38. (IGST Sec.30 and Sec.53 GST).


F) Refund of tax payment on purchases made by Embassies or UN

The United Nations Organization and Consulates or Embassies are required to take a Unique Identity Number and purchases made by them will be reflected against their number in GSTIN and refunds can be granted. A separate process will be notified in the Rules. GST Sec.19(6).

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