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GST Payments - GST Refund Online & Offline
GST Payments - GST Refund Online & Offline
GST Payments - GST Refund Online & Offline
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Table of Contents :
In a majority of cases, the supplier of goods/services pays GST to the government and recovers charge at the
applicable rate from the receiver. In relatively fewer cases, the buyer pays the GST directly to the government
(instead of the seller). The process by which GST liability of the supplier is shifted to the receiver of
goods/services is termed as the reverse charge mechanism.
Gross GST Liability – This is the gross GST liability of the registered business/individual
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TDS (Tax Deducted at Source) – By using TDS mechanism, the dealer deducts tax before making payment
to the supplier. TDS, if paid, is deducted from Gross GST liability.
TCS (Tax Collected at Source) – The TCS mechanism is commonly used by e-commerce aggregators on
sales made through their website. TCS, if paid, is deducted from the Gross GST liability.
ITC (Input Tax Credit) – This is a special mechanism introduced under GST which can be availed by
registered businesses/individuals to decrease their overall tax burden. By implementation of ITC, the GST
burden on a supplier’s output is decreased to the extent GST has been paid on inputs purchased by the
registered business/individual.
Cash Ledger: This ledger contains details of all deposits made by the taxpayer including cash deposits,
TCS/TDS transactions made on behalf of the GST registered person/business by others. The cash ledger
balance can be used to make various GST-related payments.
Credit Ledger: The GST credit ledger primarily reflects details of ITC i.e. input tax credit applicable to the
registered business/individual. The credit balance in this ledger can be utilized only for making tax
payments related to GST. The balance cannot however be utilized for payment of penalties, late fees or
interest.
Liability Ledger: This electronic GST ledger contains details of the total tax liability of the registered
business/individual for the specific month. This ledger will also contain any late payment
charges/interest that may be applicable to the taxpayer. This along with details of the other ledgers can
be accessed and viewed from the GST tax payer’s dashboard.
1) Using balance in the Credit Ledger: A GST registered business/individual can make GST payment using
the credit ledger balance available in lieu of input tax credit received. This balance cannot however be used for
making other GST-related payments such as late fees, interest, etc.
2) Using Cash Ledger Balance: The taxpayer can also use cash ledger balance to pay GST dues via either the
online route or the offline route. Under currently applicable rules, GST dues have to be mandatorily paid
online if total tax payable is over Rs. 10,000. A GST payment challan is mandatory when making GST
payments.
In case of late GST payment, late fees are applicable at the rate of Rs. 200 per day (Rs. 100 for late CGST +
Rs. 100 for late SGST payment). There is however no late payment fee for late IGST payment. The late fee
applicable in this case is capped at Rs. 5000.
Apart for the late fee, interest charges are also applicable on the unpaid tax at 18% p.a. The taxpayer has
to calculate these interest charges and pay them as applicable.
Short payment of GST i.e. paying less taxes than owed as per GST computation feature a heftier fine. The
penalty in such cases is the higher amount among Rs. 10,000 and 10% of GST short paid. Apart from this,
the short paid amount also needs to be repaid along with applicable interest at 18% per annum. Know
more about GST Penalties and Offences
GST Refund
A GST registered person/business may be eligible for a GST refund in case the tax paid exceeds the actual GST
liability. Under GST rules, the process of claiming refunds has been standardized with time limits applicable to
the submission of GST refund claims. The process of GST refunds is different from the process of ITC or input
tax credit.
If an export supplier’s input tax credit (ITC) exceeds GST payable or in case of a claim of rebate on
exports.
In case excess tax was paid by mistake by the GST registered taxpayer.
In case there is pending balance in the GST credit ledger due to zero tax or tax exempt.
By foreign embassies and UN bodies when purchases are made by them in India.
By foreign tourists who are subject to GST refund.
In case credits/discounts are received by supplier due to issue of credit notes.
In case refund is due after finalization of provisional assets.
*The above list is indicative and there may be other instances where GST refunds are issued.
*The above list is indicative and there may be other instances where GST refunds can be claimed.
Form GST RFD 01: This document is available on the Official GST Portal and can be filled out and
submitted electronically through a notified Facilitation Centre or online through the common GST portal.
The GST RFD-01 is the primary document that needs to be filled out and submitted in order to claim a
GST refund.
Copy of Order: Supporting documentary evidence is necessary if GST refund is due as a result of an
order passed by an applicable appellate authority or court. The reference number of the order along
with copy of the order needs to be provided along with refund application as documentary evidence.
Statement of Shipping Invoices: If an export supplier claims GST refunds, a statement with date and
number of shipping bills/bills of export along with copies of relevant export invoices needs to be
provided as documentary evidence for refund claim.
Statement of Invoices: In case the GST registered business supplies goods manufactured in a SEZ (special
economic zone), the applicable documentary evidence of refunds is a statement containing the date and
number of invoices.
Copy of Final Assessment Order: A copy of the final assessment order along with reference number of
assessment order needs to be provided if the GST refund is being processed due to finalization of
provisional assessment.
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Form GST RFD 02: This form is essentially an acknowledgement that the application for a GST Refund has
been filed and submitted using GST RFD 01. The GST RFD-02 is available from the common GST Portal
and is automatically generated based on information provided by the taxpayer in GST RFD-01. It is
important to note that the GST RFD-02 is only an acknowledgement of refund application receipt and
does not guarantee that GST refunds will actually be provided to the taxpayer.
*The above list of documents is indicative and other documents may be required to process a GST refund
claim depending on the type of applicant.
Net ITC = Input tax credit availed by the taxpayer on various inputs/input services for relevant period
Adjusted Total Turnover = The value of turnover in a state excluding the value of exempt supplies for relevant
period
The details of the interest payable on GST refunds are provided to the taxpayer using Form GST RFD-05 which
is prepared by the appropriate government authority. Key details included in the GST RFD-05 are the total
amount, the period for which interest is payable on the refund and the total amount payable as interest.
Under existing rules, interest is payable by the government only on the amount to be refunded and not on
any unused input tax credit available in the taxpayer’s electronic ledger.