On receipt of application, where the proper officer is satisfied as regards the refund application filed, he would pass an order sanctioning the refund. In the following situations, the refund sanctioned would be paid to applicant, –
1. refund of tax paid on zero-rated supplies of goods and/or services or on inputs or input services used in making such zero-rated supplies;
2. refund of unutilized input tax credit under Section 54(3);
3. refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued;
4. refund of tax in pursuance of Section 77;
5. the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or
6. the tax or interest borne by such other class of applicants as the Central or a State Government may, on the recommendation of the Council, by notification, specify. In all other cases, the amount sanctioned shall be credited to the Fund.
ICAI FAQ PUBLICATIONS 06-09-2017 REFUNDS: FAQ NO. 18)