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Refund Under GST: Circumstances When You Can Claim Refunds

Timely refund mechanism is essential in GST, as it facilitates trade through release of blocked funds for working capital, expansion and modernization of existing business.

Refunds can be claimed in following circumstances as detailed in Section 54 of CGST Act, 2017:

(a) export of goods or services – refund of input credits related to exports.

(b) supplies to SEZs units and developers – refund of input credits related to supplies to SEZ

(c) supply of goods regarded as Deemed Exports – refund of input credits related to Deemed Exports

(f) refund of accumulated Input Tax Credit on account of inverted rate structure

(d) refund of taxes on purchase made by UN or embassies etc. under Section 55 of CGST Act, 2017;

(e) refund arising on account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court

(g) finalisation of provisional assessment – refund of excess taxes paid

(h) refund of pre-deposit to casual / taxable persons for taxes paid at time of registration

(i) tax paid in excess/by mistake can be claimed as refund as per Rule 92. ;

(j) Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India (not notified yet)

(k) refund of tax paid in wrong head under Section 77 of CGST Act, 2017 & Section 19 of IGST Act, 2017 (treating the supply as intra-State supply which is subsequently held as inter-State supply and vice versa)

(l) refund on account of long-term contract cancellations like refund of GST paid by unregistered person to builders and subsequently flat is cancelled and time period of issuing credit note by the builder has elapsed or refund on account of GST paid on future tenure of long-term insurance policies which is subsequently cancelled due to any reason. Refer our detailed article here Article.

Remember, the GST law requires that every claim for refund is to be filed within 2 years from the relevant date.

For detailed procedure on how to claim refund stay tune with us for other blogs on Refund of GST.


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