Manual processing of refund claims in detailed

Manual processing of refund claims in detailed


Following are the Forms for Refund Procedures

GST RFD – 01 Application for Refund
GST RFD – 02 Acknowledgement for Application of Refund submitted
GST RFD – 03 Deficiency Memo
GST RFD – 04 Provisional Refund Order
GST RFD – 05 Payment Advice
GST RFD – 06 Interest on delayed refund order
GST RFD – 07 Order for complete adjustment of sanctioned refund/ order for withholding refund
GST RFD – 08 Notice for rejection of application for refund
GST RFD – 09 Reply to show cause notice
GST RFD – 10 Application for Refund by any specialized agency of UN or Multilateral Financial Institution and Organization, Consulate or Embassy of foreign countries, etc.


Filling of refund application online when refund of unutilized ITC
Filing of printout of FORM GST RFD – 01A
Initial scrutiny of the Documents by the proper officer
Issue Acknowledgement manually within 15 days in FORM GST RFD – 02
Grant of provisional refund within 7 days of issue of Acknowledgement
Detailed scrutiny of the refund application along with submitted documents
If the sanctionable amount is less than the applied amount
Pre Audit
Final sanction of Refund

a. Filing of refund application in FORM GST RFD – 01A online on the common portal (only when the refund of unutilized ITC is claimed): The corresponding electronic credit ledger of CT/ST/UT/IT/Cess would get debited and an ARN number would get generated. – Rule 89

b. Filing of printout of FORMGST RFD- 01A: The printout of the ARN along with an application of refund shall be submitted manually in the appropriate jurisdiction. – Rule 89 (1) Application

This Form needs to be accompanied with the requisite documentary evidence. – Rule 89(2) Requisite Documents

This form shall contain the debit entry in the electronic credit ledger of the amount claimed as the refund in FORM GST RED-01A. – Rule 89(3) Debiting of electronic credit ledger

c. Initial scrutiny of the Documents by the proper officer: The proper officer shall validate the GSTIN details on the portal to validate whether return in FORM GSTR – 3 or FORM GSTR – 3B as the case may be, has been filed. – Rule 90(2) 15-day time for scrutiny

A declaration is required to be submitted by the claimant that no refund has been claimed against the relevant invoices.

Deficiencies, if any in documentary evidence are to be ascertained and communicated in FORM GST REF -03 within 15 days of the filing of the refund application. Deficiency Memo should be complete in all respects and only one Deficiency Memo shall be given. – Rule 90(3) Issuance of Deficiency Memo

Submission of an application after Deficiency Memo shall be treated as a Fresh application. Resubmission of the application, after rectifying the deficiencies pointed out in the Deficiency memo shall be made by using the ARN and debit entry number generated originally. If the application is not filed afresh within 30 days of the communication of the deficiency memo the proper officer shall pass an order in FORM GST PMT -03 and recredit as the refund through FORM GST RED -01B. – Rule 90(3) Fresh refund application requirement and Rule 93(1) recredit of refund amount applied for

d. Issue Acknowledgment manually within 15 days in FORM GST RED – 02: The date of submission of the application for which acknowledgment has been given will be considered as the date for ensuring whether the refund application has sanctioned within the stipulated time period. – Rule 90(2) Acknowledgement

e. Approval of provisional refund within the period of 7 days of from the issue of Acknowledgement: The amount of provisional refund shall be calculated taking into account the total input tax credit, without any reduction for credit being provisionally accepted.

Provisional refund shall be granted separately for each head CT/ST/UT/IT/Cess within 7 days of acknowledgment in FORM GST RED -04 – Rule 91(2) Prima facie satisfaction, 7 days requirement

Before sanctioning of the refund a declaration shall be obtained that the application has not contravened rule 91(1). – Rule 91(1) Requirement of no prosecution for last 5 years

Payment advises to be issued in FORM GST RED – 05 & Refund would be made directly in the bank account mentioned in the registration. – Rule 91(3) – Payment advice, electronic credit to bank account

f. Detailed scrutiny of the refund application along with submitted documents: The Officer shall validate refund statement details with details in FORM GSTR 1 (or Table 6A of FORM GSTR -1) available on the common portal.

The Shipping bill details can be verified by an officer by logging ICEGATE SITE wherein the officer would check details of EGM (Export General Manifest) and shipping bill by keying in port name, shipping bill number, and shipping date.

Further, details of IGST paid also needs to be verified from FORM GSTR -3 or FORM GSTR – 3B as the case may be filed by the applicant and it needs to be verified that the refund amount claimed shall be less than the tax paid on account of zero-rated supplies as per FORM GSTR -3 or FORM GSTR – 3B as the case may be. – Rule 89(4) – Refund Amount Calculation

Ascertain what amount may be sanctioned finally and see whether any adjustments to any outstanding liability is required (FORM GST RFD -07 Part A). Rule 92(1) – Any adjustments made in the number of existing demands

g. If the sanctionable amount is less than the applied amount: Notice has to be issued to the applicant in FORM GST RFD – 08. – Rule 92(3) – Notice for refund not admissible/payable

The applicant has to reply within 15 days of receipt of the notice in FORM GST RED – 09. – Rule 92(3) – Requirement of reply to the notice within 15 days

Principles of natural justice to be followed before making the final decision. Final order to be made in FORM GST RFD – 06. – Rule 92(3), (4), (5) – Sanction of Refund order

h. Pre – Audit: Pre – Audit of the manually processed refund applications is not required to be carried out, irrespective of the amount involved till separate detailed guidelines are issued. Post audit of the orders may, however, continue on the basis of extant guidelines.

i. Final sanction of Refund: The proper officer shall issue the refund order manually for each head i.e. CT/ST/UT/IT/Cess. Amount paid provisionally needs to be adjusted accordingly. Payment advice is to be made in FORM GST RFD – 05.

The amount of credit rejected has to be re-credited to the credit ledger by an order in FORM GST PMT -03 and shall be intimated to the common portal in FORM GST RFD -01B. Refund if any will be paid by an order with payment advice in FORM GST RFD – 05.

The details of the refund along with taxpayers bank account details shall be manually submitted in PFMS system by the jurisdictional Division’s DDO and a signed copy of the sanction order shall be sent to PAO office for release payment. – Rule 92(3) (4) (5) – Sanction of Refund order and Payment Advice

Payment of interest if any: Amount if any will be paid by an order with payment advice in FORM GST RFD – 05.

Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice. Neither the authors accept any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.

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