What are the Cases of GST Refund in India?

As of now, all of us are aware of GST, which stands for Goods and Services Tax. It is an indirect tax that has erased a number of indirect taxes in India since its implementation, such as excise duty, VAT, Service Tax, etc.  GST came into effect from July 2017, however, the idea of GST was invented way before. It is a single domestic indirect tax law for the whole country. A number of users are confused and facing problems in GST refund cases, as they are not aware of the proper process. Here in this blog, we will let you know all about GST refund and its cases.

Components of GST

There are three taxes applicable under GST:-

• CGST:- This tax is collected by the Central Government on the intra-state sales, means transactions which are taking place within a state.
• SGST:- This tax is collected by State Government on Intra-state sale, means transacations taking place within the same state.
• IGST:- It is the tax, collected by the Central Government for inter-state sale, means transacations which are taking place from one state to another state.

GST Refund is one of the most common cases people struggle with, as it requires to follow specific steps, submit documents and declaration (If required) in order to claim GST refund from GST authorities. In order to claim GST refund, you have to choose the right form, as it varies as per the case of GST refund. 

A quick and efficient refund system is very important in tax administration. It helps businesses by releasing money that gets stuck during trade. This money can then be used for day-to-day operations, growing the business, or upgrading equipment and technology.

Under the Goods and Services Tax (GST) system, the rules for claiming a refund are clearly defined and follow a standard process. This makes it easier and more consistent for everyone. One of the major benefits of the GST refund system is that the entire process is done online and within a set time limit. This is a big improvement compared to the old system, which was often slow and complicated. 

Objectives of GST

1. One Nation, One Tax Ideology

GST replaces various indirect taxes with a single nationwide tax. It ensures uniformity in tax rates and structures, promoting a common national market and simplifying the tax system for businesses across different states.

2. Elimination of the Majority of Indirect Taxes

GST merges central and state taxes like VAT, Excise, and Service Tax. This reduces the complexity of multiple tax laws, minimizes confusion, and makes compliance easier for businesses by introducing a single, streamlined taxation process.

3. Eliminating the Cascading Effect of Taxation

GST allows input tax credit at every stage of the supply chain. This avoids tax-on-tax, reduces overall costs for consumers, and ensures that tax is charged only on the added value at each stage.

4. Curbing Tax Evasion

With its digital infrastructure, GST enhances transparency in transactions. Invoice matching and strict return filing help track tax liabilities and prevent fraud, making tax evasion more difficult and improving overall tax compliance.

5. Ease of Doing Business through Online Procedures

GST offers a fully digital system for registration, return filing, and payments. This reduces paperwork, speeds up processes, lowers operational costs, and encourages startups and small businesses to comply easily with tax laws.

Cases of GST Refunds

There are several situations where a business or taxpayer may be eligible for a refund under GST. These are explained in the GST law, mainly in:

(a) Export supply of goods or services with payment of tax

(b) Supplies to SEZs units and developers

(c) Supply of goods regarded as Deemed Exports

(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

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

(g) Finalisation of provisional assessment

(h) Refund of pre-deposit

(i) Tax paid in excess/by mistake

(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 any other reasons. Thus, practically every situation is covered. The GST law requires that every claim for refund is to be filed within 2 years from the relevant date.

(m) Refund on account of accumulated Input Tax Credit

Connect CRSPL for Professional Assistance in GST Refund

Now you must have come to know what are the cases of GST refund, if you are struggling with GST refund and unable to claim refund. In that case, do contact CRSPL Business Consultants, our experts will assist you in all cases and help you claim the GST refund. For more assistance, contact us, we will be right back with another post.