G

S
t
Section
54 Refunds of tax
Description
CHAPTER - 19
REFUNDS
INDEX

55 Refund in certain cases.

56 Interest on delayed refunds.
57 Consumer Welfare Fund.
58 Utilisation of Fund.

Rules Description
89 Application for refund of tax, interest, penalty, fees or any other amount
90 Acknowledgement
91 Grant of provisional refund
92 Order sanctioning refund
93 Credit of the amount of rejected refund claim
94 Order sanctioning interest on delayed refunds
95 Refund of tax to certain persons
96 Refund of integrated tax paid on goods exported out of India
96A 96A. Refund of integrated tax paid on export of goods or services under bond or
Letter of Undertaking
97 Consumer Welfare Fund

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 Q.1 : What is the presumption for transfer of burden tax?
Ans :
Section 49(9) provides that Every person who has paid the “tax” on goods of
services or both under this Act shall, unless the contrary is proved by him, be
deemed to have passed on the full incidence of such tax to the recipient of
such goods or services or both.

Q.2 : Explain the Principal of unjust enrichment ?

Ans :
1) As per doctrine of unjust enrichment no person shall be allowed to enrich
himself at the cost of another.
2) Only the person who has not passed the incidence of tax will be eligible to
claim refund.
3) Under Unjust enrichment, a presumption is always drawn that the
businessman will shift the incidence of tax to the final consumer as in
Indirect tax incidence of tax is transferable and it is borne by the consumer.
4) Where the refund arises and it is paid to supplier, If it will be undeserved
benefit from the customer & from the government, resulting in unjust
enrichment.
5) Therefore refund should be paid to the consumer who has actually borne
the burden of duty. However is not practically possible to identity such
person then refund due should be transferred to consumer welfare fund. It
is for the reason that every refund claim if sanctioned is first transferred to
consumer welfare fund.

Q.3 : Write short notes : Refund.

Ans :
“Refund” includes refund of tax paid on-
Ü Zero rated supplies of goods or services or both or
Ü on inputs or input services used in making such zero-rated supplies, or
Ü refund of tax on the supply of goods regarded as deemed exports, or
Ü refund of unutilised input tax credit as provided under section 54(3)
Thus all kinds of refund will be dealt with as per this section [including export
incentives granted by way of refund.]

Q.4 : Specify he situations leading to refund claims?

Ans : A claim for refund may arise in the following situations
(i) Export of Goods or Services : Goods or services or both are exported or,
goods or services or both supplied to an SEZ developer/unit, on payment of
IGST and refund of such IGST paid on goods or services or both supplied is
claimed [Section 16(3)(b) of IGST Act].
(ii) Refund for ITC : A registered person may claim refund of any unutilised
input tax credit (ITC) at the end of any tax period in the following cases:
(a) Zero rated supplies: Supply of goods/services/both to an SEZ
developer/unit or export of goods or services or both, and

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 (b) Accumulated ITC on account of inverted duty structure: Where the
credit has accumulated on account of rate of tax on inputs being higher
than the rate of tax on output supplies (other than nil rated or fully exempt
supplies), except supplies of goods or services or both as may be notified
by the Government on the recommendations of the Council.
However, refund of unutilized ITC shall NOT be allowed if:
Ü the goods exported out of India are subjected to export duty;
Ü the supplier of goods or services or both avails of drawback in
respect of CGST or claims refund of the IGSTpaid on such supplies.
(iii) Deemed Export : Tax paid on the supply of goods regarded as deemed
exports may be claimed by recipient.
(iv) Refund of Balance of E-Cash Ledger : Refund of any balance in the
electronic cash ledger after payment of tax, interest, penalty, fee or any
other amount payable under this Act or the rules made there under may be
claimed [Section 49(6)].
(v) Refund on account of issuance of refund vouchers for taxes paid on
advances against which goods or services have not been supplied, may
be claimed [Section 31(3)].
(vi) Refund of tax wrongly collected and paid to the Government [i.e.
CGST & SGST paid by treating the supply as intra-State supply which is
subsequently held as inter-State supply and vice versa [Section 77 of the
CGST Act and section 19 of the IGST Act].
(vii) Refund to Tourist : The IGST paid by tourist leaving India on any supply of
goods taken out of India by him [Section 15 of IGST Act].
(viii) Refund on account of Court Order : Tax becomes refundable as a
consequence of judgment, decree, order or direction of the Appellate
Authority, Appellate Tribunal or any court.
(ix) Refund on account of Final Assessment : On finalization of provisional
assessment, if any tax becomes refundable to assessee (on account of
assessed tax on final assessment being less than the tax deposited by the
assessee) [Section 60].
(x) Refund to UN bodies etc.: Refund of taxes on purchase made by UN
bodies or embassies etc. [Section 54(2)].

Q.5 : What is the time limit within which refund claim can be filed?
Ans.: Any person claiming refund of any tax, interest, if any, paid on such tax or
any other amount paid by him, may make an application before the expiry of
2 years from the ‘Relevant Date’ in such form and manner as may be
prescribed [Section 54(1)].
A registered person may claim refund of any unutilised ITC in case of zero
rated supplies or accumulated ITC on account of inverted duty structure
at the end of any tax period [Section 54(3)].

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 Q.6 : Explain the meaning of relevant date?
Ans.:
S.No. Cases Relevant Date
1. In case of goods exported out of India where a refund of tax
paid is available in respect of goods themselves or, as the
case may be, the inputs or input services used in such goods
and
(i) Goods are exported by sea Date on which the ship or the
or air aircraft in which such goods are
loaded, leaves India
(ii) Goods are exported by land Date on which such goods pass
the frontier
(iii) Goods are exported Date of dispatch of goods by
by post the Post Office concerned to
a place outside India
2. In case of supply of goods Date on which the return
regarded as deemed exports relating to such
where a refund of tax paid is deemed exports is furnished
available in respect of the goods
3. In case of services exported out of India where a refund of tax
paid is available in respect of services themselves or, as the
case may be, the inputs or input services used in such
services, and
(i) the supply of services had Date of receipt of payment in
been completed prior to the convertible
receipt of such payment foreign exchange
(ii) payment for the services Date of issue of Invoice
had been received in
advance prior to the
date of issue of the invoice
4. Where tax becomes refundable Date of communication of
as a consequence of judgment, such judgment, decree, order
decree, order or direction of or direction
the Appellate Authority,
Appellate Tribunal or any court
5. In case of refund of unutilised End of the Financial Year in
ITC in case of zero rated which such
supplies or accumulated ITC claim for refund arises
on account of inverted duty
structure
6. In the case where tax is paid Date of adjustment of tax after
provisionally under this Act or the final assessment thereof
the rules made thereunder
7. In the case of a person, other Date of receipt of goods or
than the supplier services or both by such person
8. Any other case Date of payment of tax

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Q.7 : Specify the cases where Doctrine of unjust enrichment is not
applicable ?
or
Cases where refund is directly payable to applicant
or
Amount not transferable to consumer welfare fund.
Ans :
Cases where refundable amount shall be paid to the applicant:
Section 54(8) stipulates that the refundable amount shall, instead of being
credited to the Consumer Welfare Fund, be paid to the applicant, if such
amount is relatable to —
(a) Tax on zero rated supply : refund of tax paid on zero rated supplies of
goods or services or both or on inputs or input services used in making
such zero-rated supplies.
(b) Excess ITC of zero rated supply or inverted structure : refund of
unutilized ITC in case of zero rated supplies or accumulated ITC on
account of inverted duty structure.
(c) Refund of Tax on issue of refund voucher : refund of tax paid on a
supply which is not provided, either wholly or partially, and for which
invoice has not been issued, or where a refund voucher has been issued.
(d) Payment of Tax under wrong head : refund of tax in pursuance of
section 77, i.e. tax paid tax on a transaction treated to be an intra-State
supply, but which is subsequently held to be an inter-State supply or vice-
versa.;
(e) Refund if burden is not shifted : the tax and interest, if any, or any other
amount paid by the applicant, if he had not passed on the incidence of
such tax and interest to any other person; or
(f) Notified cases of Government : the tax or interest borne by such other
class of applicants as the Government may, on the recommendations of
the Council, by notification, specify.

Q.8 : What are the applications of refund claims of tax, interest, fees or
any other amount?
Ans.:

Person claiming Refund Application to be filed

electronically on GSTR
1. Ü Any person who is eligible for refund RFD-01
other than Person covered u/s 55
(i.e.person required UIN)
Ü Refund of IGST on goods exported out
of India
2. Registered person claiming refund of any Claim refund in GSTR-3/
balance in the E-Cash ledger as per GSTR-4/ GSTR-7 of
Sec 49(6) relevant tax period.

Important Comment :
1. In case of CTP/NRTP the amount shall be refunded only after filing return u/s 39 (last
return) for entire period for which registration held.
2. In case deemed exports, the application shall be filed by the recipient of the deemed
export supplies.

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 3. In case of supplies made to SEZ unit or developer of SEZ
(a) supplier of goods after such goods have been admitted in full in the SEZ for
authorised operations, as endorsed by the specified officer of the Zone.
(b) supplier of services along with such evidence regarding receipt of services for
authorised operations as endorsed by the specified officer of SEZ [Second proviso to
rule 89(1)].

Q.9 : How to calculate refund of ITC in case of zero rated supply ?

Ans.:
Rule 89(4) stipulates that in the case of zerorated supply of goods or services
or both without payment of tax under bond/LUT in accordance with the
provisions of section 16(3) of the IGST Act, 2017, refund of ITC shall be
granted as per the following formula:

(Turnover of zero-rated supply of goods +

Refund Turnover of zero-rated supply of services)
Amount = × Net ITC
Adjusted Total Turnover
where,-
A. "Refund amount" means the maximum refund that is admissible;
B. "Net ITC" means ITC availed on inputs and input services during the
relevant period
Amendment other than the input tax credit availed for which refund is claimed
under sub-rules 89 (4A) or 89 (4B) or both.
C. "Turnover of zero-rated supply of goods" means the value of zerorated
supply of goods made during the relevant period without payment of tax
under bond/LUT
Amendment other than the turnover of supplies in respect of which refund is
claimed under sub-rules 89(4A) or 89 (4B) or both.
D. "Turnover of zero-rated supply of services" means the value of
zerorated supply of services made without payment of tax under bond or
LUT, calculated in the following manner, namely:-

payments ZRSS where a d v a n c e s

Turnover of
received during supply has been received for zero-
Zero-rated
the relevant completed for rated supply of
supply of
= period for ZRSS + which payment - services for which
services
h a d b e e n the supply of
(ZRSS)
received in services has not
advance in any been completed
period prior to the during the relevant
relevant period period.

E. "Adjusted Total turnover" means the turnover in a State or a Union

territory, as defined under section 2(112), excluding
(a) the value of exempt supplies other than zero-rated supplies and
Amendment (b) the turnover of supplies in respect of which refund is claimed
under sub-rules (4A) or (4B) or both, if any
during the relevant period.
F. “Relevant period” means the period for which the claim has been filed.

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Rule 89 (4A) - Deemed Export
In the case of supplies received on which the supplier has availed the benefit
of the Government of India, Ministry of Finance, notification No. 48/2017
Central Tax.
Refund of input tax credit, availed in respect of other inputs or input
services used in making zero-rated supply of goods or services or both, shall
be granted.
Notification No. 48/ 2017 Following supply are notified as a deemed
export
(a) Supply of goods by a registered person against Advance Authorisation

(b) Supply of capital goods by a registered person against Export

Promotion Capital Goods Authorisation

(c) Supply of goods by a registered person to Export Oriented Unit

(d) Supply of gold by a bank or Public Sector Undertaking specified in the

notification No.50/2017- Customs, dated the 30th June, 2017
(as amended) against Advance Authorisation.

Rule 89 (4B) - Penultimate Supply

In the case of supplies received on which the supplier has availed the benefit
of the notification No. 40/2017-CT (Rate)
refund of input tax credit, availed in respect of inputs received under the
said notifications for export of goods and the input tax credit availed in respect
of other inputs or input services to the extent used in making such export of
goods, shall be granted.
Comment : As per notification 40/2017 CT Supply of taxable goods by
registered Supplier to a registered recipient for export then exemption is
available as in excess of amount calculated at the rate of 0.05% subject to
prescribed conditions.

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Q.10 : Explain the provision of grant of provisional refund?
Ans.:
The proper officer may, in the case of any claim for refund on account of
zero-rated supply of goods or services or both made by registered
persons, (other than such category of registered persons as may be notified
by the Government on the recommendations of the Council,)
Ü refund on a provisional basis, 90% of the total amount so claimed,
excluding the amount of ITC provisionally accepted
Ü in such manner and subject to such conditions, limitations and safeguards
as may be prescribed** and
Ü thereafter make an order under section 56(5) for final settlement of the
refund claim after due verification of documents furnished by the applicant.
Conditions, limitations and safeguards (Rule 91)
It stipulates as following:
Ü Where the amount of tax evaded exceeds ` 2.5 crores, the provisional
refund shall be granted subject to the condition that the person claiming
refund has, during any period of 5 years immediately preceding the tax
period to which the claim for refund relates, not been prosecuted for any
offence under the Act or under an existing law.
Ü The proper officer, after scrutiny of the claim and the evidence submitted in
support thereof and on being prima facie satisfied that the amount claimed
as refund is due to the applicant in accordance with the provisions of section
54(6), shall make an order in prescribed form, sanctioning the amount of
refund due to the said applicant on a provisional basis within a period not
exceeding 7 days from the date of the acknowledgement.
Ü The proper officer shall issue a payment advice for the amount sanctioned
and the same shall 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.

Q.11 : Specify the cases of withholding of refund claim ?

Ans.:
Where any refund is due in case of the proper officer may:
zero rated supplies or accumulated (a) withhold payment of refund
ITC on account of inverted duty due until the said person
structure, to a registered person has furnished the return or
Ü who has defaulted in furnishing any paid the tax, interest or
return or penalty, as the case may
Ü who is required to pay any tax, be;
interest or penalty, which has not (b) deduct from the refund
been stayed by any Court, Tribunal or due, any tax, interest,
Appellate Authority by the specified penalty, fee or any other
date (Specified date shall mean the last date for amount which the taxable
filing an appeal under this Act [Section 54(10)].) person is liable to pay but
which remains unpaid
under this Act or under the
existing law.

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 Where an order giving rise to a refund Proper officer may, after giving
is the subject matter of an appeal or the taxable person an
further proceedings or where any opportunity of being heard,
other proceedings under this Act is withhold the refund till such
pending and the Commissioner is of time as he may determine
the opinion that grant of such refund is [Section 54(11)].
likely to adversely affect the revenue in
the said appeal or other proceedings
on account of malfeasance or fraud
committed

However, where a refund is withheld under section 54(11), the taxable person shall,
notwithstanding anything contained in section 56, be entitled to interest @ 6% p.a., if
as a result of the appeal or further proceedings he becomes entitled to refund
[Section 54(12)].

Q.12 : How to calculate refund of ITC in case of inverted duty structure ?

Ans.:
Rule 89(5) of the CGST Rules, 2017 stipulates that in the case of refund on
account of inverted duty structure, refund of ITC shall be granted as per the
following formula -
Amendment

Maximum Turnover of inverted rated supply of Tax payable on

Refund goods or services x Net ITC such inverted rated
Amount = - supply of goods
Adjusted Total Turnover
or Services Amendment

where,-
A. "Refund amount" means the maximum refund that is admissible
B. "Net ITC" means input tax credit availed on inputs and input services
during the relevant period
Amendment other than input tax credit availed for which refund is
claimed under sub-rules 89(4A) or 89(4B) or both.
C. "Adjusted Total turnover" means the turnover in a State or a Union
territory, as defined under section 2(112), excluding
(a) the value of exempt supplies other than zero-rated supplies and
(b) the turnover of supplies in respect of which refund is claimed
Amendment under sub-rules (4A) or (4B) or both, if any
during the relevant period.

Where the application relates to refund of ITC, the electronic credit ledger
shall be debited by the applicant by an amount equal to the refund so
claimed [Rule 89(3)].

Comment : As per N/n 5/2017 CT(Rate) no refund would be allowed for

inverted rate for following goods.
(a) woven fabrics (b) knitted or crocheted fabrics (c) rail locomotives and
railway coaches/ vehicles, etc.

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Example : Refund on account of inverted duty structure : From the following
information you are required to determine the maximum amount of refund
admissible on account of inverted tax structure.
Particulars `
(i) Input tax credit availed on inputs 3,60,000
(ii) Input tax credit availed on input services 36,000
(iii) Turnover of inverted rated supply of goods 30,00,000
(taxable @ 5%)
(iv) Turnover of other supplies of goods 15,00,000
(includes exempted supplies ` 5 lakh)

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 Q.13 : Explain the Provision Refund to un Bodies, Embassies, etc.
[Section 55 read with Section 54(2) of CGST act]?
Ans.:
Supplies made to UN bodies and embassies may be exempted from
payment of GST as per international obligations.
The exemption has been given by way of a refund mechanism. So, a taxable
person making supplies to such bodies would charge the tax due and
remit the same to Government account.
However, the UN bodies and other entities notified under section 55 of the
CGST Act, 2017 can claim refund of the taxes paid by them on their
purchases.

Detailed provisions have been discussed hereunder:

(1) Who is entitled to refund under section 55?
Government may, on the recommendations of the Council, by notification,
specify:
(i) any specialised agency of the United Nations Organisation; or
(ii) any Multilateral Financial Institution and Organisation notified under
the United Nations (Privileges and Immunities) Act, 1947; or
(iii) Consulate or Embassy of foreign countries; and
(iv) any other person or class of persons as may be specified in this behalf,
who shall, subject to such conditions and restrictions as may be
prescribed, be entitled to claim a refund of taxes paid on the notified
inward supplies of goods or services or both received by them.
(2) Time Limit for filing refund claim [Section 54(2) read with rule 95(1)]
Persons may make an application of such refund, once in every quarter,
but before the expiry of 6 months from the last day of the quarter in
which such supply was received.
(3) Form and documents for filing the refund claim [Rule 95(1)]
Persons eligible to claim refund under section 55 shall submit the
application for refund:
Ü in a different prescribed form, electronically on the common portal,
Ü along with a Statement of the Inward Supplies of goods or services or
both in Form GSTR-11 prepared on the basis of the Statement of
the Outward Supplies furnished by the corresponding suppliers in Form
GSTR-1.
(4) Acknowledgment for refund claim [Rule 95(2)]
An acknowledgement for receipt of the application for refund shall be
issued in a prescribed form.
(5) Conditions to be satisfied for sanction of refund [Rule 95(3) & (4)]
Refund of tax paid by the applicant shall be available if all the following
conditions are satisfied-
(a) the inward supplies of goods or services or both were received from a
registered person against a tax invoice and the price of the supply
covered under a single tax invoice exceeds `5,000, excluding tax
paid, if any.

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 (b) name and GSTIN or UIN of the applicant is mentioned in the tax invoice.
(c) such other restrictions or conditions as may be specified in the
notification are satisfied.
(6) Supremacy provision in case of inconsistency [Rule 95(5)]
Where an express provision in a treaty or other international agreement, to
which the President or the Government of India is a party, is inconsistent
with the provisions of these rules, such treaty or international agreement
shall prevail.

Q.14 : What are the documents required for filing refund claims?
Ans.: Basic documents
As per Sec 54(4) application shall be accompanied by
(a) such documentary evidence as may be prescribed to establish that a
refund is due to the applicant; and
(b) such documentary or other evidence (including the documents referred
to in section 33) as the applicant may furnish to establish that there is no
unjust enrichment

If claim of refund is less than 2 Declaration by applicant certifying

Lakhs theat there is no unjust enrichment.
If claim of refund is 2 Lakhs Certificate from CA/CMA will have to
or more be given

Documents required as per Sec 89(1)

1 If refund resulted due to Ü Reference number of order &
order, order of Appellate Ü Copy of order
Authority / Tribunal or Passed by Appellate authority or
Court. Appellate Tribunal or Court
2 If refund is on account of Ü Statement containing the number &
export goods date of shipping bills or bills of export &
Ü date of relevant export invoices.
3 If refund is on account Ü Statement containing the number &
of export of services. date of invoice &
Ü The relevant Bank realization certificates
or foreign Inward Remittance certificates.
4 If supply of goods made Ü Statement containing the number & date
to SEZ Unit or a SEZ of invoice
developers. Ü evidence regarding goods admitted in
full for authorized operations as
endorsed by the specified officers of
SEZ
5 If supply of Services Ü Statement containing the number & date
made to SEZ Unit or a of invoice
SEZ developers. Ü evidence regarding goods admitted in
full for authorized operations as
endorsed by the specified officers of
SEZ
Ü the details of payment, along with proof
there of made by the recipient to
supplier for authorised operation.

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 6 If deemed export a statement containing the number & date
of invoices along with such other evidence
as may be notified in this behalf.
7 If ITC accumulated on a statement containing the number & date
Account of inverted rate of invoices received & issued during a tax
structure (other than Nil period.
rated as fully exempted)
8 Finalisation of Ü reference no. of the final assessment
provisional assessment order &
Ü Copy of said order
9 Intra-State supply sub- Statement showing the details of transaction
sequently become inter considered as intra-state supply but which
state supply or via versa. subsequently held to be inter-state supply
10 Excess payment of Tax Statement showing the details of the
amount of claim on account of excess
payment of tax.

Q.15 : Specify the cases where declaration by the applicants nor a

certificate by a CA/CMA is not required eventhough amount more than 2
Lakhs ?
Ans.:
(a) refund of tax paid on zero-rated supplies of goods or services or both or on
inputs or input services used in making such zero-rated supplies
(b) refund of unutilised ITC in case of zero rated supplies or accumulated ITC
on account of inverted duty structure
(c) refund of tax paid on a supply which is not provided, either wholly or
partially, and for which invoice has not been issued, or where a refund
voucher has been issued. The expression “invoice” referred here means
invoice conforming to the provisions contained in section 31.
(d) refund of tax in pursuance of section 77, i.e. tax paid tax on a transaction
treating it as an intra-State supply, but which is subsequently held to be an
inter-State supply or vice-versa.
(e) the tax or interest borne by such other class of applicants as the
Government may, on the recommendations of the Council, by notification,
specify.

Q.16: How acknowledgement of refund claim will be issued by common

portal ?
Ans.:

Where the application An acknowledgment in prescribed form

relates to a claim for shall be made available to the applicant
refund from the through the Common Portal electronically,
electronic cash ledger clearly indicating the date of filing of the
claim for refund [Rule 90(1)].

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 Where the application Ü The application shall be forwarded to the
relates to a refund claim proper officer.
othe r tha n c la im for Ü The proper officer shall, within a period of
refund from the 15 days of filing of the said application,
electronic cash ledger scrutinize the application for its
completeness.
Ü Where the application is found to be
complete in terms of rule 89, an
acknowledgment in prescribed form shall
be made available to the applicant through
the common portal electronically, clearly
indicating the date of filing of the claim for
refund [Rule 90(2)].

Q.17 : Explain the order of refund [Section 54(5),(7) read with rule 92]?
Ans.:
Ü Section 54(5) stipulates that if, on receipt of any such application, the proper
officer is satisfied that the whole or part of the amount claimed as refund is
refundable, he may make an order in FORM RFD-06 accordingly and
the amount so determined shall be credited to the Consumer Welfare
Fund
Ü Refund order shall be issued by the proper officer within 60 days from the
date of receipt of application complete in all respects [Section 54(7)].
The time limit of 60 days shall be counted from the date of filing claim for
refund as mentioned in the acknowledgment

Where the proper officer he shall make an

is satisfied that the Ü order in Form GST RFD-06 and
amount refundable is Ü issue a payment advice for the amount of
payable to the applicant refund and
under section 54(8) Ü the same shall 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 [Rule 92(4)].
Where the proper officer he shall make an order in Form GST RFD-
is satisfied that the 06 and issue an advice for the amount of
amount refundable is not refund to be credited to the Consumer
payable to the applicant Welfare Fund [Rule 92(5)]
under section 54(8)

Q.18 : Explain the provision of issue of Show Cause Notice(SCN) and

rejection of refund claim ?
Ans.:
Ü Where the proper officer is satisfied, for reasons to be recorded in writing,
that the whole or any part of the amount claimed as refund is not
admissible or is not payable to the applicant, he shall issue a notice to the
applicant.

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 Ü Applicant will be required to furnish a reply within 15 days of the receipt of
such notice.
Ü The proper officer shall, after considering the reply furnished by applicant
and after giving him an opportunity of being heard, make an order in Form
GST RFD-06, sanctioning the amount of refund in whole or part, or
rejecting the said refund claim.
Ü The said order shall be made available to the applicant electronically and
the provisions of rule 92(1) relating to order sanctioning refund shall,
mutatis mutandis, apply to the extent refund is allowed.
Ü No application for refund shall be rejected without giving the applicant an
opportunity of being heard [Rule 92(3)].

Q.19 : What is a minimum amount of refund claim [Sec 54(14)] ?

Ans.: No refund shall be paid to an applicant, if the amount is less than ` 1000

Q.20 : Explain the provision credit of amount of rejected refund claim

[Rule 93] ?
Ans.:
(1) Where any deficiencies have been communicated under rule 90(3), the
amount earlier debited under rule 89(3) shall be re-credited to the electronic
credit ledger.
(2) Where any amount claimed as refund is rejected under rule 92, either fully
or partly, the amount debited, to the extent of rejection, shall be recredited to
the electronic credit ledger by an order made in prescribed form.

Explanation : For the purposes of this rule, a refund shall be deemed to be

rejected, if the appeal is finally rejected or if the claimant gives an
undertaking in writing to the proper officer that he shall not file an appeal.

Q.21 : Explain the provision of Interest on Delayed Refunds [section 56

Of CGST Act]?
Ans.:
A. Interest on amount refundable consequent to order passed by Proper
Officer under section 54(5)
Ü Where any tax ordered to be refunded ( Sec. 54(5) ) to any applicant is not
refunded within 60 days from the date of receipt of application (Sec
54(1)), interest shall be payable to the applicant.
Ü Interest is payable on such refund @ 6% p.a.
Ü Interest is payable from the date immediately after the expiry of 60 days
from the date of receipt of application (Sec 54(1)) till the date of refund of
such tax [Sec 56 of CGST Act].
(N/N 13/2017 CT dated 28.06.2017)
B. Interest on amount refundable consequent to order passed in an
appeal or further proceedings

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Ü Where any claim of refund arises from an order passed by an Adjudicating
Authority or Appellate Authority or Appellate Tribunal or Court which has
attained finality and the same is not refunded within 60 days from the
date of receipt of application filed consequent to such order, interest
shall be payable on such refund.
Ü Interest is payable on such refund @ 9% p.a.
Ü Interest is payable from the date immediately after the expiry of 60 days
from the date of receipt of application till the date of refund. [Proviso to
Section 56 of CGST Act].
(N/N 13/2017 CT dated 28.06.2017)

C. Order sanctioning interest on delayed refunds [Rule 94]

Ü Where any interest is due and payable to the applicant under section 56,
the proper officer shall make an order along with a payment advice in
prescribed form.
Ü Such order shall specify therein:
F the amount of refund which is delayed,
F the period of delay for which interest is payable and
F the amount of interest payable.
Ü Such interest shall 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.

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 Q.22: Explain the provision of refund of integrated tax paid on goods
exported out of India?
Ans.:
The shipping bill filed by an exporter shall be deemed to be an application for
refund of integrated tax paid on the goods exported out of India and such
application shall be deemed to have been filed only when:
(a) the person in charge of the conveyance carrying the export goods duly
files an export manifest or an export report covering the number and the
date of shipping bills or bills of export; and
(b) the applicant has furnished a valid return in Form GSTR-3/Form GSTR-
3B.
Ü The details of the relevant export invoices contained in Form GSTR-1
shall be transmitted electronically by the GST common portal to the
system designated by the Customs. The said system shall electronically
transmit to the common portal, a confirmation that the goods covered by
the said invoices have been exported out of India.
Ü Upon the receipt of the information regarding the furnishing of a valid
return in Form GSTR-3/Form GSTR- 3B from the common portal, the
system designated by the Customs shall process the claim for refund and
an amount equal to the integrated tax paid in respect of each
shipping bill/bill of export shall be electronically credited to the bank
account of the applicant mentioned in his registration particulars and as
intimated to the Customs authorities.

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 Withholding of Refund
Ü The claim for refund shall be withheld where:
(a) a request has been received from the jurisdictional Commissioner of
central tax, State tax or Union territory tax to withhold the payment of
refund due to the person claiming refund in accordance with the
provisions of section 54(10)/(11); or
(b) the proper officer of Customs determines that the goods were
exported in violation of the provisions of the Customs Act, 1962.
Ü Where refund is so withheld, the proper officer of integrated tax at the
Customs station shall intimate the applicant and the jurisdictional
Commissioner of central tax, State tax or Union territory tax, as the case
may be, and a copy of such intimation shall be transmitted to the common
portal.
Ü Upon transmission of said intimation, the proper officer of central tax or
State tax or Union territory tax, as the case may be, shall pass an order in
prescribed form.
Ü Where the applicant becomes entitled to refund of the amount withheld,
the concerned jurisdictional officer of central tax, State tax or Union
territory tax, as the case may be, shall proceed to refund the amount after
passing an order.
Ü The Central Government may pay refund of the integrated tax to the
Government of Bhutan on the exports to Bhutan for such class of goods as
may be notified in this behalf and where such refund is paid to the
Government of Bhutan, the exporter shall not be paid any refund of the
integrated tax.

Q.23 : Explain the Provision of Refund of integrated tax paid on export of

goods or services under bond or Letter of Undertaking (LUT) [Rule 96A]?
Ans.:
Ü Any registered person availing the option to supply goods/services for
export without payment of IGST shall furnish, prior to export, a bond/LUT
in prescribed form to the jurisdictional Commissioner, binding himself to
pay the tax due along with the interest specified under section 50(1) [@
18% p.a.] within a period of:

(a) if the goods are not exported 15 days after the expiry of 3
out of India months from the date of issue of
the invoice for export

(b) i f t h e p a y m e n t o f s u c h 15 days after the expiry of one

services is not received by the year, or such further period as
exporter in convertible may be allowed by the
foreign exchange. Commissioner, from the date of
issue of the invoice for export

Ü The details of the export invoices contained in Form GSTR-1 furnished on

the GST common portal shall be electronically transmitted to the system
designated by Customs and a confirmation that the goods covered by the
said invoices have been exported out of India shall be electronically
transmitted to the common portal from the said system.

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 Ü Where the goods are not exported within the time specified in rule 96A(1)
and the registered person fails to pay the amount mentioned in said sub-
rule,
the export as allowed under bond/LUT shall be withdrawn
forthwith and the said amount shall be recovered from the registered
person in accordance with the provisions of section 79 [Discussed in
Chapter – Demands and Recovery].
Ü The export as allowed under the bond/LUT withdrawn shall be restored
immediately when the registered person pays the amount due.
Ü The Board, by way of notification, may specify the conditions and
safeguards under which a Letter of Undertaking may be furnished in place
of a bond.
Ü The provisions of rule 96A(1) shall apply, mutatis mutandis, in respect of
zero-rated supply of goods or services or both to a SEZ developer or a
SEZ unit without payment of integrated tax.

Q.24 : Explain the concept of consumer welfare fund ? [Sec 57/58]

Ans :
Consumer Welfare Fund was created to promote and protect the welfare of
consumer, create consumer awareness and strengthen consumer movement
in the country, particularly in rural areas. Amount of refund which is not
payable to the applicant is credited to the Consumer Welfare Fund.
1) Amount to be credited to Consumer Welfare:
(a) Amount of refund determined by an order passed under section
54(5),
(b) any income from investment of the amount credited to the Fund;
and
(c) such other monies received by it,
2) Utilisation of Consumer Welfare Fund [Section 58 of the CGST Act,
2017 read with rule 97 of the CGST Rules, 2017]
Ü Purpose for which Fund may be utilized
u For the welfare of the consumers in such manner as may be
prescribed [Section 58(1) of the CGST Act].
uThe Government shall, by an order, constitute a Standing Committee
who shall make recommendations for proper utilisation of the money
credited to the Consumer Welfare Fund for welfare of the consumers
[Rule 97(4)].
uThe Central Consumer Protection Council and the Bureau of Indian
Standards shall recommend to the GST Council, the broad guidelines
for considering the projects or proposals for the purpose of incurring
expenditure from the Consumer Welfare Fund [Rule 97(8)].
3) Person who may apply for grant from Consumer Welfare Fund :
u Any agency or organisation engaged in consumer welfare activities for
a period of 3 years registered under the provisions of the Companies
Act, 2013 or under any other law for the time being in force,
including village or mandal or samiti level cooperatives of
consumers especially Women, Scheduled Castes and Scheduled
Tribes, or any industry as defined in the Industrial Disputes Act, 1947
recommended by the Bureau of Indian Standards to be engaged for a

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 period of five years in viable and useful research activity which has
made, or is likely to make, significant contribution in formulation of
standard mark of the products of mass consumption, the Central
Government or the State Government may make an application for a
grant from the Consumer Welfare Fund :
uHowever, a consumer may make application for reimbursement of
legal expenses incurred by him as a complainant in a consumer
dispute, after its final adjudication.
(4) Maintenance of Books of Accounts :
The Government or the authority specified by it shall maintain proper and
separate account and other relevant records in relation to the Fund and
prepare an annual statement of accounts in such form as may be
prescribed in consultation with the CAG (Comptroller and Auditor-
General of India).

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 REFUND OF DUTY
UNDER
CUSTOM ACT, 1962
SEC 27

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 REFUND OF DUTY UNDER CUSTOM
Procedure to Claim the Refund
PARTICULARS CUSTOMS
Presentation of claim by the Any person claiming refund of any duty and interest paid on such duty
applicant a) Paid by him in pursuance of an order of assessment, or
b) Borne by him
shall present a claim in proper (Form-R), along with
Ü All the relevant document supporting his claim and also
Ü The copies of documents/ records supporting his declaration that he has not passed on the
duty incidence.

Authority to whom refund claim to be AC/DC

filed
Time Limit for claiming the refund 1 year from relevant date
Note: No time limit if duty paid under protest
Order for refund The AC/DC may make the refund order, if he is satisfied that the whole or any part of duty (duty and
interest in case of customs) paid by the applicant is refundable. The amount so determined shall be
credited to Consumer Welfare Fund. But appellant is entitled to refund only if he had not passed on the
incidence of duty.

RELEVANT DATE FOR REFUND UNDER CUSTOMS

Normally, the relevant date is date of payment of customs duty & interest if any, but if

Duty is provisionally assessed u/s

If duty is paid by buyer
180 of Customs Act.

Relevant date is date of final Relevant date is date of purchase of

assessment goods

Circumstances under which refund will be paid to the assessee or in which Unjust Enrichment is not applicable.

Customs [SEC 27(2)]

1. The duty and interest, if any, paid on such duty paid by the importer, or the exporter, as the case may be if he had not passed on the incidence of such
duty and interest to any other person.

2. The duty and interest, if any, paid on such duty on imports made by an individual for his personal use.

3. The duty and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest to any other
person.

4. The export duty as specified in Section 26 [see below]

5. Drawback of duty payable under Sections 74 and 75

6. The duty and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the
Official Gazette, specify.

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 REFUND OF EXPORT DUTY [SEC 26 OF CUSTOMS]
Where on the exportation of any goods any duty has been paid, such duty shall be refunded
to the person by whom or on whose behalf it was paid, if -
a) The goods are returned to such person otherwise than by way of re-sale;
b) The goods are re-imported within one year from the date of exportation; and
c) An application for refund of such duty is made before the expiry of six months from the date
on which the proper officer makes an order for the clearance of the goods.

BELATED DISBURSEMENT OF REFUND BY C.G. [CUSTOMS-SEC 27A]

a) If any duty ordered to be refunded to an applicant is not refunded within three months
from the date of receipt of application, there shall be paid to that applicant interest.
b) Interest shall be paid even where refund is granted by an Appellate Authority.
c) Interest is payable @ 6% p.a. by the C.G.
d) Interest is payable from the date of expiry of 3 months from the date of receipt of
application till the date of refund of duty.

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