GST Refunds in India

The Goods and Services Tax (GST) Act in India provides for GST refunds to eligible taxpayers. These refunds are granted to offset the tax paid on certain inputs or to provide relief on specific items.

Eligibility for GST Refunds:

• Inverted Wholesale Dealer (IWD): Taxpayers who purchase goods from abroad for resale at a higher price in India are eligible for refunds on the GST paid on imported goods.
• Zero-Rated Supplies: Supplies of goods to certain specified entities, such as embassies, international organizations, and certain religious institutions, are exempt from GST.
• Exported Goods: Goods exported out of India are eligible for a refund of the GST paid on the export.
• Input Tax Credit (ITC) Reversal: In certain cases, such as when a taxpayer ceases operations or there is a change in business structure, the ITC accumulated on inputs can be reversed and refunded.

Types of GST Refunds:

• Refund of Input Tax Credit (ITC): Refunds of ITC are granted to taxpayers who are eligible for the credit but have not utilized it.
• Refund of Integrated Tax (IGST): Refunds of IGST are granted to taxpayers who are eligible for the refund based on the above criteria.
• Refund of State GST (SGST): Refunds of SGST are granted to taxpayers who are eligible for the refund based on the above criteria.

Procedure for GST Refunds:

1. File GSTR-11: Taxpayers seeking GST refunds are required to file GSTR-11, a prescribed form, with the GST authority.
2. Attach Supporting Documents: Along with GSTR-11, taxpayers need to attach supporting documents, such as bills of entry, invoices, and proof of export.
3. Submit Form: The GSTR-11 and supporting documents are submitted electronically through the GST Common Portal.
4. Verification and Approval: The GST authority verifies the documents and approves the refund claims.
5. Payment: Once approved, the refund amount is credited to the taxpayer’s bank account.

Time Limit for Filing GSTR-11:

The time limit for filing GSTR-11 varies based on the type of refund claim. Generally, the refund claims must be filed within the following time limits:

• For IWD and Exported Goods: Within 180 days from the end of the financial year.*