While seeking a refund under GST Laws, the refund application shall be accompanied by:
- Documentary evidence to establish that a refund is due to the applicant and
- Evidence to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund was collected from, or paid by him and the incidence of such tax and interest had not been passed on to any other person.
However, if amount claimed as refund is less than two lakh rupees, it shall not be necessary for the applicant to furnish any documentary and other evidence but he may fade a declaration, based on the documentary or other evidence available to him, certifying that the incidence of such tax and interest had not been passed on to any other person.
After receipt of the application or declaration as the case may be, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order within sixty days from the date of receipt of application and the amount so determined shall be credited to the Consumer Welfare Fund. (Section 54(4),(5) & (7))
Interest on Delayed Refunds
Section 56 of the CGST Act, 2017 states that if any tax ordered to be refunded under section 54 is not refunded within sixty days from the date of receipt of application interest at such rate not exceeding six per cent as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application under the said sub-section till the date of refund of such tax.
Where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiring of sixty days from the date of receipt of application till the date of refund. Where any order of refund is made by an Appellate Authority, Appellate Tribunal or any court against an order of the proper officer under subsection (5) of section 54, the order passed by the Appellate Authority, Appellate Tribunal or by the court shall be deemed to be an order passed under the said sub-section (5).
Note – Please note that the above article is part of our continuous research on the related matters. It is based on our interpretation of related regulations which may differ person to person. Readers are expected to take expert opinion before relying on above.