How To Check GST Refund Status: Eligibility, Filing Process And Common Delays

GST refunds play a pivotal role in promoting exports of goods and services. Exporters in turn give a thrust to the economy by bringing valuable foreign exchange into the country's reserves. Smooth and timely processing of GST refunds is vital for the release of blocked funds thereby not affecting the liquidity of businesses and ensuring smooth flow of working capital, thus providing an impetus to the exporting community.

The process of GST Refunds enables a taxpayer to claim back from the revenue department the amount of tax or input tax credit initially paid however available as a cashback to them considering the extant provisions of the GST law and by complying with the practical procedure being enumerated under the GST Rules, as per Siddharth Surana, CA and PGDM by IIM Bangalore.

How to Check Your GST Refund Status?

Here is a comprehensive guide from Siddharth Surana, CA and PGDM at IIM Bangalore, on how to verify the status of your GST refund.

• GST Refunds are processed in an online mode with minimal officer interface. The department's intent to make the refund process electronic and faceless is clear and though increased efforts are put in the said direction, it may take some time for the process to become fully electronic and eliminate the difficulties still faced by the taxpayers while getting their refunds processed.
• GST Refund filing right from the stage of making an application till the final sanctioning of the refund claim is an automated process and all the legs of the refund mechanism such as the filing of the application, issue of acknowledgement, issue of deficiency memo/show cause notice, replying to clarifications seeking notices/show cause notices, issuance of order sanctioning/rejecting refund is vide the online refund module.
• The refund application in the prescribed form RFD 01 is to be filed online on the GST Portal. On successful filing of the application along with the annexures referred to in the regulations, an Application Reference Number (ARN) is generated which can be used to track the status of the refund application. ARN is to be preserved by the taxpayer since it is the sole critical identifier of the refund application and is used throughout the life of the application until the final credit of the refund amount.
• The refund status can be checked by navigating to Services - Refunds - Track Application Status.
• The status of refunds can even be tracked without necessarily logging into the GST account. For a more detailed status, the taxpayer may access his dashboard and navigate through User Services - My Applications - Refunds - Enter From and To Date - Search.
• The taxpayer would then be directed to the refund applications filed during the selected period with an exhaustive status such as issuance of acknowledgement, any deficiency notice, reply to such notice etc. along with downloadable supporting documents.

Who is eligible for GST refund?

Here is a list of eligibility requirements for checking the status of a GST refund, as explained by Siddharth Surana, CA, and PGDM at IIM Bangalore.

1. Refunds under GST can be filed (Form GST RFD 01) by an exporter (including suppliers to SEZ) of goods or services in relation to below two scenarios;

• Accumulated input tax credit (ITC) attributable to their zero-rated turnover
• IGST (tax) paid on export of goods or services

2. In the case of export of goods with payment of IGST, the refunds are sanctioned directly by processing through Customs (ICEGATE) upon verification of the data reflecting on the Shipping Bill vis-à-vis the details furnished in the GST Returns. In the case of export of services with payment of IGST, a refund application is to be filed by the taxpayer on the GST Portal.

3. One of the significant categories of GST refunds is the refund of unutilised ITC on account of zero-rated supplies made under the cover of the Letter of Undertaking. The refund formula to arrive at the amount of eligible refund (unutilised ITC refunds are not permissible in relation to capital goods) is enumerated in the GST Rules. Apart from zero-rated supplies, ITC refunds are also available in instances of inverted duty structure where the rate of GST on inputs is higher than the rate chargeable on output supplies and may be applied for by the taxpayers engaged in making such supplies.

4. GST refunds can also be filed under several other categories inter-alia including:

• Erroneous excess payment of GST
• Unutilised balances in Electronic Cash Ledger
• Supplier of Deemed Exports
• On account of Appeal/Any Other Order

5. It is important to note that the refund application is to be filed by adhering to the statutory timelines laid down under the Act and the due date of filing the application is ascertained as 2 years from the 'relevant date' which differs depending upon the category of refund.

How To File GST Refund Form?

Here is detailed guidance on how to file a GST refund form, as instructed by IIM Bangalore's Siddharth Surana, CA and PGDM.

• GSTN has devised a robust online module for filing of refunds by a taxpayer. One would have to login to the portal and navigate to Services - Refunds - Application for Refund. Select the Refund Type and the Period. The refund application is to be filled with the necessary details, uploaded with the relevant supporting documents and the application is then filed using the DSC or the One Time Password.
• The GST refund applications are liable for dismissal if the documentary requirement (in case of refunds of accumulated ITC) i.e. the statement of export invoices along with copies, transaction-wise ITC register, Foreign Inward Remittance Certificate (FIRC) and the reference to Letter of Undertaking filed for the concerned period is not furnished while making the online application.
• After the filing of the application, the same gets forwarded to the jurisdictional officer for their processing and in case the refund application is found to be complete to their satisfaction, an acknowledgement in GST RFD 02 shall be issued within 15 days of the filing of the refund application. If any discrepancies are noticed, it is communicated by way of a deficiency memo issued in GST RFD 03 which necessitates re-filing of the application after making suitable corrections.

GST Refund Common Delays

Here is a list of common reasons for GST refund delays as guided by Siddharth Surana, CA and PGDM by IIM Bangalore.

• While the process of GST refunds runs in an online environment, however, there are delays observed in the processing of the application such as delayed receipt of acknowledgement, non-communication of deficiencies and issuance of show cause notice at a later stage for such deficiencies.
• At times, the officers conduct physical inspections of the business premises to verify the genuineness of the transactions and the place of business and seek additional clarification/documentation pursuant to their findings.
• GST law provides for the grant of 90% of a refund applied as a provisional refund after prima facie verification of the application and by the issuance of a provisional order in Form GST RFD 04 within 7 days from the issue of acknowledgement in GST RFD 02. However, in practicality, the refund officers are many times reluctant to issue provisional refunds thereby obstructing cash flows and delay in lawfully available refunds.
• Thus, the process is not free from hurdles and the sanctioning of refunds is still time-consuming requiring follow-ups and adhering to the additional requirements issued by the authorities over email or online on the GST Portal.
• Taxpayers must maintain adequate supporting documentation substantiating their valid claim of refunds which would enable them to respond to departmental queries in a timely manner and avoid further delays. Further, in case of delayed sanctioning of the refunds beyond the timelines available to the officer, the taxpayer may consider recovering interest at the rate of 18% per annum for the delayed period.