Getting GST Refunds and Interest: Exporters, tourists

GST Refund for Tourists

Under the act of Section 15 of the Integrated Goods and Service Tax (IGST), the refund paid on integrated tax against the supply of goods to tourists leaving India is mentioned.

The integrated tax which will be paid by tourists leaving India for the supply of goods transported out of India by the tourist himself/herself will be refunded. The refund will be made in a manner subjected to specific conditions.

Tourists who visited and stayed in India for less than 6 months on legitimate, non-immigrant purposes will be eligible for claiming a refund on the IGST paid towards the supply of goods which was exported from India to some foreign country.

Circumstances for Delay in Refund and Interest

As per the GST law and the recommendation of the Subramanian Committee, the refund application must be processed within 90 days from the day of the application filing. If the refund application does not get processed within the period, then a 6% interest rate is applicable.

The Commerce and Industry Minister, Nirmala Sitharaman stated in a release that the refunds under GST will be processed within 7 days and if the processing is delayed for more than 2 weeks then the refund will be credited along with an interest.

Procedure of Refund Under GST

The procedures for claiming refund of GST are as follows

• File the application form while claiming for a refund through the GSTN portal.
• The applicant will receive an acknowledgment number via SMS or email after the application has been filed electronically.
• Any necessary adjustment will be made on the return or the cash ledger which will automatically reduce the carry-forward input tax credit.
• Within 30 days of the filing of the refund application, the submitted application and documents will be thoroughly inspected.
• A concept would be followed to examine each refund application and if it does not meet the criteria then the refund would instead be transferred to Consumer Welfare Fund.
• If the refund exceeds the anticipated amount then it will be put through a pre-audit process so that the refund can be sanctioned.
• Either via ECS, RTGS or NEFT the refund will be electronically credited to the applicant’s bank account.
• The application for refund can be submitted at the end of each yearly quarter.
• On claim amounts less than Rs. 1,000 no refund shall be paid.

The processing timeline for the applications for return in GST will be faster and more precise than the previous tax regime. Due to the fact that all the data will be uploaded in the GST portal automatically, verification and delivery of the excess tax refund will be swifter.