Category: Refunds under GST

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What will be the amount of bond furnished for exports and how will the bond be secured

The bond would cover the amount of tax involved in the export based on estimated tax liability as assessed by the exporter himself. FORM RFD -11 under rule 96A of the CGST Rules requires furnishing a bank guarantee with bond as a security. The bank guarantee should normally not exceed 15% of the bond amount. If Commissioner is satisfied with the track record of an exporter then furnishing of bond without bank guarantee would suffice. [Refer Circular No. 4/4/2017-GST dated July 7, 2017].

(ICAI FAQ PUBLICATIONS 06-09-2017 QUESTIONS ON NOTIFICATIONS AND CIRCULARS: FAQ NO. 26)

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What are the categories of persons eligible for submitting a Letter of Undertaking in place of a Bond

According to Notification No. 16/2017 – Central Tax dated July 7, 2017, following registered person shall be eligible for submission of Letter of Undertaking in place of a bond:
(a) a status holder as specified in paragraph 5 of the Foreign Trade Policy 2015- 2020; or
(b) who has received the due foreign inward remittances amounting to a minimum of 10% of the export turnover, which should not be less than one crore rupees, in the preceding financial year,
(c) has not been prosecuted for any offence under the Act or under an existing law where the amount of tax evaded exceeds two hundred and fifty lakh rupees.

(ICAI FAQ PUBLICATIONS 06-09-2017 QUESTIONS BASED ON NOTIFICATIONS AND CIRCULARS :FAQ NO. 25)

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What are the prior procedures for persons making zero rated supplies to claim refund of taxes paid in relation to supply of goods or services under bond or Letter of Undertaking

Any registered person availing the option to make a zero rated supply of goods or services without payment of integrated tax shall furnish a bond or a Letter of Undertaking in FORM GST RFD-11 prior to execution of such supply.

(ICAI FAQ PUBLICATIONS 06-09-2017 REFUNDS: FAQ NO. 24)

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What is the procedure for claim and grant of refund of IGST paid on goods exported out of India

FORM RFD-01 is to be filed after:
(a) the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export delivers it under Section 41 of Custom Act 1962; and
(b) the applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR- 3B, as the case may be. Upon the receipt of the information regarding the furnishing of a valid return as mentioned above, the system designated by the Customs shall process the claim for refund and an amount equal to the IGST paid in respect of each shipping bill shall be electronically credited to the bank account of the applicant.

(ICAI FAQ PUBLICATIONS 06-09-2017 REFUNDS: FAQ NO. 23)

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Under what circumstances would refund be paid to the applicant

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)