New Delhi, September 26, 2019: As decided by the GST Council, the refund processing by tax officers has been made online and disbursal through a single authority.
The refund is sought by taxpayers largely on account of exports. The other categories are for refund of excess Input Tax Credit, inverted duty (where tax on inputs is higher that the tax on output), refund of excess cash in cash ledger
etc. As far as refund of export of goods on payment of IGST is concerned, the same has been fully online since inception where the return (GSTR-1) of the taxpayer is treated as refund application. After filing of GSTR-01 and GSTR3B, GST System processes the refund and shares the export invoice data along with details like shipping bills, port code etc. with Customs System called ICEGATE, which then matches the details with shipping bills in its system and status of refund claimed on the same. Based on this, the eligible amount gets transferred to the bank account of taxpayers thru PFMS system of the Government. More than half of refund amount goes thru this route. Till date more than Rs 95,000 crores has been refunded under this method.
For other set of refunds like export of services, inverted duty structure cases, accumulated ITC etc., the taxpayers applied for refunds online, on the GST Portal, along with the required statements in RFD 01-A form. The refund
application was transmitted electronically to the dashboard of the tax officer. However, the processing of the refund application by the tax officer was done manually, which included issue of deficiency memo, sow cause notice, payment
advice, refund order etc.
Now, with the deployment of online refund functionality, the taxpayers can file refund application (in RFD 01 form) and the tax officers can process the refund application online. All communications between the taxpayers and the tax
officers will also be online. The online refund process has become effective from 26th September, 2019 on the GST portal.
Earlier, the refund processing was done for both Central and State GST by one tax authority to whom the taxpayer was assigned administratively but disbursement was done by accounting authorities of central and state tax departments separately. This used to lead to delay on account of sharing of sanction order with counterparty accounting authorit through that tax authority. The new system has done away with this and after processing is completed by the tax officer, the sanctioned amount will get credited to the bank account of the Taxpayer through PFMS System.
After processing the refund application filed by the taxpayers, the tax officials will issue payment advice online and the amount will be refunded/ credited to taxpayer’s account, as provided by them in their refund application. In case
there is problem with the bank account number given by the taxpayers, they will be intimated about the same and requested to correct bank account details, so that refund amount can be credited to their bank account. The process has been made simple and it will change the face of the refund process and refunds. It is also expected to cut down the time from filing of application to disbursal of amount.
Prakash Kumar, CEO-GSTN, said that, “starting from 26thSeptember, 2019, the New Refund process will create a seamless experience for both Taxpayers and Tax Officers. This will boost the disbursement speed of refunds and further
improve the GST compliance. Taxpayers can view the various stages of processing of their refund application on the GST Portal and can give replies to notice, if any, online on the GST Portal now. They will also be given information via SMS and Email, at important stages of processing of their refund application. Most importantly, the payment of amount will now be done from one disbursement authority i.e. PFMS unlike the earlier method where sanction was done by one authority but payment was made by State and Central Authorities separately.”
Meanwhile, all refund applications filed before September 26, 2019 will be processed manually as done under the old
Goods and Services Tax Network (GSTN) is a Section 8 (under new companies Act, not for profit companies are governed under section 8), nongovernment, private limited company. Instituted in March 2013, the Company has been set up primarily to provide IT infrastructure and services to the Central and State Governments, tax payers, and other stakeholders for implementation of the Goods and Services Tax (GST).