Goods and Service Tax (“GST”) provides an option to file an appeal against the order of lower authorities. Therefore, if the refund application of any taxpayer gets rejected or GST Refund out of Appeal then he may file an appeal with the next appellate authority. Rejection order is passed in form GST RFD-06.
CBIC received various representations asking to clarify procedure of claiming refund finalised through Appeals or any other Forum. Accordingly, CBIC has clarified such issue vide Circular No. 111/30/2019-GST about manner of handling such issue in following manner:
Procedure of handling GST Refund out of Appeal
1. Pre-requiste of filing appeal against GST RFD-06
- As of now, appeals against rejection of refund claims are handled in offline form as electric mode is yet to be implemented.
- As per Rule 93 of CGST Rules, if a taxpayer files appeal against rejection of refund order then he is not allowed to re-credit amount debited in Electronic Credit ledger till appeal is finally rejected.
- Therefore, such amount in dispute remains debited in electronic credit ledger.
2. Application for claiming refund subsequent to favorable order
- If favourable order is received, then registered person shall file a fresh refund application under ” Refund on account of assessment/provisional assessment/appeal/any other order”.
- As corresponding amount involved has already been debited in electronic credit ledger, therefore, registered person shall not be required to re-debit such amount in his credit ledger at the time of filing fresh refund application.
- Registered person shall be required to furnish following information and documents while filing refund application:
- Type of order (Appeal/any other order)
- Order Number
- Order Date
- Order Issuing Authority
- Copy of order of appellate or other authority
- Copy of refund rejection order in form GST RFD-06 issued earlier against which appeal was preferred
3. Procedure of granting refund by proper officer
- Upon receipt of application, GST officer shall sanction the amount of refund as allowed in appeal or in subsequent forum.
- Proper officer shall make an order in form GST RFD-06 and shall issue payment order in GST RFD-05.
- Any amount of refund rejected in appeal or subsequent forum shall get re-credited in electronic credit ledger of registered person in accordance with guidelines given under Para 4.2 of Circular No. 59/33/2018-GST dated 04.09.2018
4.Illustration of GST Refund out of Appeal
| Particulars | Amount (INR) |
| Application for refund filed in form GST RFD-01 | 1,000 |
| Amount debited in Electronic Credit Ledger | 1,000 |
| Refund allowed by Proper officer | 700 |
| Refund Rejected by Proper Officer (Order in form GST RFD-06)- )(Amount not re-credited to electronic credit ledger) | 300 |
| Amount for which appeal was filed | 300 |
| Refund allowed by Appellate authority (GST RFD-06 and GST RFD-05) | 100 |
| Refund Denied | 200 |
| Fresh refund application is to be filed under ” Refund on account of assessment/provisional assessment/appeal/any other order” | 100 |
| Amount to be re-credited to electronic credit ledger provided registered person is not challenging order in higher forum | 200 |
Notes:
- FORM GST RFD – 01B under the original ARN which has so far not been uploaded will be uploaded with refund sanctioned amount as Rs.800/- (INR 700+ INR 100) and the amount to be re-credited will be Rs. 200/-.
- If proper officer who rejected the refund claim originally (INR 1000) and proper officer handling fresh refund application (INR 100) are not same then the latter shall communicate to the proper officer who rejected the refund claim to close the ARN only after obtaining the undertaking as referred in para 4.2 of Circular no. 59/33/2018 – GST dated 04/09/2018.
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