Skip to content

CBIC Issued New Guidelines for GST Refunds

Recently Central Board of Indirect Taxes & Customs has issued detailed guidelines for sanctioning, post-audit and review of refund claims. Let us discuss the Key feature and short summary of the guidelines. Instruction No. 03/2022-GST dated 14 June 2022. Central Board of Indirect Taxes & Customs has been observed that proper speaking orders have not been issued while issuing the orders for GST refund claims & also currently different GST officers adopted different practices & procedures for sanctioning refunds, which created confusion among the tax payers and business community.

With respect to promote the uniformity in practices adopted by GST officers, the GST policy wing of the CBIC has issued detailed guidelines for the refund claims sanctioning, post-audit & review of all refund claims.

Speaking Orders

  • Presently, certain refund applications are rejected without proper speaking orders (without providing detailed reasoning for such rejection).
  • With this Instruction- the GST officers will provide detailed speaking order with the reasons for sanction or rejection of the claims made on refund.

These guidelines to GST officers, helps:

  • Provide the details which is going to be mentioned in a speaking order.
  • Tax payers understand & respond to refund rejection order in a timely manner.

In the instructions which is issued to GST officers, CBIC has listed additional points to be checked by GST officer for sanction the refund. Thus we would have to do the double check on the below key points before applying refund applications;

Additional details should be checked by GST officers for sanctioning of Refunds

1. Refund of Input Tax Credit on account of zero rate supplies

  • Whether calculation of aggregate turnover/ turnover is correct according to the provisions
  • Whether calculation of NET Input Tax Credit is correct as per provisions
  • NET Input Tax Credit should not include input on capital goods
  • Input Tax Credit should be restricted to extent reflecting in GSTR 2A/2B.
  • Submission of E Bank Realisation Certificate / FIRC for service exports.

2. For supplies to Special Economic Zone’s by DTA

  • Supplies need to be for authorized operations basis LoA.
  • Supplies must cross checked with SEZ online portal.
  • Documents must endorsed by proper SEZ officer.
  • Payment need to be received by DTA from SEZ against supply.

Post Audit of Refund Claims

  • Post Audit is not required for Refunds upto INR 1 Lacs
  • For Refunds exceeding INR 1 lacs, GST department will conduct audit within 3 months from the refund date. Post-audit of refund orders will be took place in offline mode, till functionality for conducting post-audit online is developed at GST portal.

Review of Refund Claims by GST department

  • All refund claims are need to be reviewed. So that GST department can decide whether to go for appeal or not.
  • The review team should submit the report to the higher authorities at least 30 days prior for filing appeal.