Understanding the Fully Electronic Refund Process in GST – Circular No. 125/44/2019
<p>Circular No. 125/44/2019 marks a significant milestone in the Goods and Services Tax (GST) refund process by introducing a fully electronic refund mechanism for various types of claims. This development aims to enhance the efficiency of refund applications, ensuring a smoother and faster processing experience for taxpayers.</p><p><strong>Key Highlights:</strong></p><ul><li><strong>Fully Electronic Refund Process</strong>: Effective from September 26, 2019, all refund applications for various categories, including unutilized input tax credit (ITC) on exports, deemed exports, and excess payment of tax, must be filed electronically through FORM GST RFD-01 on the common portal. This replaces the previous manual and semi-electronic processes.</li><li><strong>Types of Refunds Covered</strong>: The refund process now applies to multiple refund categories such as refunds for unutilized ITC on export of goods and services, supplies made to Special Economic Zones (SEZs), inverted tax structure, excess balance in the electronic cash ledger, and more.</li><li><strong>Simplified Submission</strong>: Taxpayers are required to upload all relevant documents and invoices along with their refund claims, directly on the portal. The submission is now paperless, eliminating the need for physical submission to tax offices.</li><li><strong>Streamlined Processing</strong>: Once a refund application is filed electronically, an Application Reference Number (ARN) is generated, and the application is transferred to the jurisdictional officer for processing. This ensures a faster and more streamlined workflow, with deficiency memos or acknowledgements being issued electronically.</li><li><strong>Disbursement Process</strong>: The disbursement of refund amounts, under both central and state tax heads, will be handled by the respective tax authorities, and payments will be made through the Public Financial Management System (PFMS) to the taxpayer's validated bank account.</li><li><strong>Provisional Refunds</strong>: For cases where the proper officer has concerns over the refund claim, provisional refunds of 90% can be issued, with the final refund subject to further scrutiny.</li></ul><p>This circular aims to expedite the GST refund process, offering relief to taxpayers by minimizing paperwork and ensuring quicker disbursements.</p><p><a href="https://cms.plasament.com/storage/chirag-singla/circular-cgst-125.pdf">circular-cgst-125</a><br> </p>