Process to get GST Refund of Excess Amount from Electronic Cash Ledger

When one hears the word ‘refund’, we feel fortunate that we are going to be united with our funds which were once paid as taxes. There are many situations where a refund arises on GST. Understanding the refund norms and criteria’s is extremely important so that we do not excessively partake with our money.

When can a person get Refund under GST?

A claim of refund may arise on account of:

• Export of goods or services with payment of tax
• Unutilised Input Tax Credit (ITC) on account of exports without payment of tax
• Supplies to SEZs units and developers with payment of tax
• Unutilised Input Tax Credit (ITC) on supplies to SEZs units and developers without payment of tax
• Tax paid by supplier on deemed exports
• Taxes on purchase made by UN or embassies etc
• On account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court
• Unutilised Input Tax Credit (ITC) on account of inverted duty structure
• Finalisation of provisional assessment, final assessment, appeal or any other order
• Refund of pre-deposit
• Excess payment of tax due to mistake
• GST paid by international tourists on goods in India and carried abroad at the time of their departure from India
• Issuance of refund vouchers for taxes paid on advances against which goods or services have not been supplied
• Tax paid on intra-State supply which was subsequently held as inter-State supply and vice versa. [for instance, if CGST/SGST was paid instead of IGST, then a person can claim refund of CGST/SGST]
• Excess balance in the electronic cash ledger

Let us learn more about GST Refund of Excess Amount from Electronic Cash Ledger.

What do you mean by the Electronic Cash Ledger?

Electronic Cash Ledger is like an e-wallet. Any GST payment made in cash or through bank reflects in Electronic Cash Ledger. After deduction of ITC any balance tax liability has to be paid using balance in Electronic Cash Ledger.

It is a cash ledger that contains deposits that a taxpayer has made and any GST payments made through cash. The cash ledger segregates the information head wise such as IGST, CGST, SGST/UTGST, and CESS.

What are the refund provisions w.r.t excess balance in the electronic cash ledger?

As per Section 54 of the CGST Act, 2017 read with Rule 89 of the CGST Rules, 2017, the balance in Electronic Cash Ledger can be claimed as a refund by submitting a refund application form RFD-01. This can be done online on the GST Portal/GSTN.

What is the time limit for application of refund?

The excess GST paid can be claimed as a refund within two years from the date of payment. This means that if excess GST is paid in the month of December 2019, GST refund application can be submitted until December 2021.

Can the taxpayer save the application for refund?

Application for refund can be saved at any stage of completion for a maximum time period of 15 days from the date of creation of refund application. If the same is not filed within 15 days, the saved draft will be purged from the GST database.

To view your saved application, the applicant has to navigate to Services – Refunds – My Saved/Filed Applications option.

What is the procedure to file RFD – 01 on the GST Portal?

• Step 1: Login to the GST portal.
• Step 2: Go to ‘Services’ – ‘Refunds’ – ‘Application for Refund’
• Step 3: Select ‘Refund of Excess Balance in Electronic Cash Ledger’ and click on ‘Create’. Once you click on ‘Create’, balance amount available in Electronic Cash Ledger will be auto-populated in the form.
• Step 4: You can enter values of the refund to be claimed in the editable ‘Refund Claimed’ table. The refund amount can be less than or equal to the amount available in Electronic Cash Ledger. Click on “Click to view Electronic Liability Ledger” to get details of liabilities/dues relating to returns/other demands.
• Step 5: Click on “Go Back to Refund Form” after viewing the outstanding demand.
• Step 6: Select the bank account (in which you want the refund to be credited) from the drop-down.
• Step 7: To upload the supporting documents, give the description to the document. Click on “Choose File” to add the document. Click on “Delete” icon to delete the uploaded document. Click on “SAVE” after completion of uploading the document
• Step 8: Click on “Preview” to download the form in PDF. After reviewing the draft, click on “Proceed” to submit the form.
• Step 9: Select the checkbox in the declaration. Select the name of the ‘Authorised Signatory’ from the drop-down.
• Step 10: Based on the type of your organisation click on “Submit with DSC” or “Submit with EVC”. In case of DSC, select the certificate of the authorised signatory and click on ‘Sign’ button. In case of EVC, enter the OTP received on the mail ID or mobile number of the authorised signatory and click on ‘Verify’.
• Step 11: Once RFD-01 is filed ARN will be generated and “Refund ARN Receipt” can be downloaded as PDF document from ‘Services’ – ‘Refunds’ – ‘My Saved/ Filed Applications’.
• Step 12: Filed applications can be tracked using the “Track Application Status” under Refunds.
• Step 13: Once the ARN is generated on filing of refund application in Form RFD-01, the refund application along with the documents attached while filing the form would be assigned to Jurisdictional Refund Processing Officers for processing the refund. After inspection by GST authorities refund amount will be credited to the applicant bank account.

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Is there any limit for claim of refund in case of refund of excess amount from the cash ledger?

There is no minimum limit for claim of refund in case of refund of excess amount from the cash ledger.

Where can one download their filed refund application?

One has to navigate to Services – User Services – My Applications link to download their filed refund application

Effect on refund applications in the Union Territories of Dadra and Nagar Haveli and Daman and Diu and Ladakh

The Commissioner of Dadra and Nagar Haveli and Daman and Diu in July 2020 issued the trade notice stating that upon Merger of Union Territories of Dadra and Nagar Haveli and Daman and Diu with effect from January 26, 2020, there arises a need to declare a single State Code for Persons Registered under Goods and Service Tax Laws in the Union Territories. So, if a taxpayer received an intimation that a new GSTIN was assigned for UT of Dadra and Nagar Haveli and Daman and Diu and the taxpayer had already filed a refund application with their old GSTIN, then all refund applications filed under old GSTIN, will be processed by designated Tax officials of the old GSTIN and amounts will be credited to the Bank details, as provided in old GSTIN. One does not need to file a fresh refund application for these cases, using the new GSTIN.

Effect on refund applications in the Union Territory of Ladakh

The President of India through the Ministry of Home Affairs, Department of Jammu & Kashmir Affairs on 30.10.2019 notified the Jammu and Kashmir Re-organization (Removal of Difficulties) Order, 2019, under which vide Para 7 of the Order, the following was provided in respect of GST:

• In the Union Territory of Jammu & Kashmir, The Jammu & Kashmir Goods and Services Tax Act, 2017 will be applicable for the levy of State GST in respect of transactions taken place therein.
• In the Union Territory of Ladakh, the Union Territory Goods and Services Tax Act, 2017 will be applicable.

So, if a taxpayer has received an intimation that a new GSTIN was assigned to him/her for UT of Ladakh, then the taxpayer has to file all their refund applications, for the refund due under new GSTIN, in the new jurisdiction assigned to them, for the period effective from 1st January 2020.

Is any interest available when refund is received late?

If the refund amount is not been credited to the bank account of the Applicant within 60 days from date of receipt of application, interest @ 6% is payable on the refund amount starting from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund of such tax.

In what cases will refund not be granted?

• No refund of unutilised ITC shall be allowed where the goods exported out of India are subjected to export duty
• No refund of ITC shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies
• Defaulted in furnishing any return
• Defaulted in payment of any tax, interest or penalty
• The Proper Officer is authorised to deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law.
• Where an order giving rise to a refund is the subject matter of an appeal / further proceedings / pending proceedings and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine.
• The amount of advance tax deposited by a casual taxable person or a non-resident taxable person shall not be refunded unless such person has furnished all the returns required under section 39.
• No refund shall be paid to an applicant, if the amount is less than Rs 1000.

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