Refiling Erroneous Nil GST Refund Application

Ever since the introduction of GST into the Indirect Taxation System, the occurrence of errors in the filing procedures has been a common scenario. Among these scenarios, one such scenario that has been of utmost concern for the Taxpayers is Erroneous Nil GST Refund application, wherein the taxpayer had a genuine refund claim for the given period but no option of re-filing was available.

Understanding genuine hardship to taxpayers, CBIC has issued a Circular No. 110/29/2019 – GST dated 3^rd October 2019, wherein it provided an option to re-file refund application if taxpayer has inadvertently filed NIL GST refund application.

What is Erroneous NIL GST refund application?

While filing refund application GST RFD-01/1A for a specific category and period, the registered person is displayed a message through a popup box to file NIL refund for the given period. However, with the lack of information/know-how about such options, taxpayers often inadvertently file a NIL refund application in GST RFD-01/01A for the period during which they were genuinely entitled to refund. Such filings are considered as Erroneous NIL GST refund. To add more to the taxpayer’s plight, once an application is filed on the GST portal, the option to re-file such application is not available.

Thus, upon requests through multiple representations, the board, upon detailed analysis of the matter, has decided to allow such taxpayers to re-file the application, only for the specific time and under that specific category for which the Erroneous claim was filed.

However, while resolving the issue, in order to ensure the genuineness of the claim, the board has laid down two conditions to be satisfied by a taxpayer, before he can apply for the refund

Conditions for refiling accidental NIL GST Refund application

CBIC is clarified vide circular that if a registered person has filed “NIL” refund application for a period under a particular category then he may re-file for the same period under same category only if he satisfies following 2 conditions:

Condition-1: Such person has already filed a NIL refund application for such period.
Condition-2*: Registered person has not filed refund application under such category during any subsequent period.

* Condition-2 shall apply for refund claims falling under following categories:

Refund of unutilized input tax credit (ITC) in case of exports without payment of tax;
Refund of unutilized ITC in case of supplies made to SEZ Unit/SEZ Developer without payment of tax;
Refund of unutilized ITC on account of accumulation due to inverted tax structure;

How to Re-file Refund application?

If the given taxpayer satisfies the aforementioned conditions, he is eligible to refile for his refund as follows:

In order to re-file the Refund application, the taxpayer will be required to file the application under “Any Other” category instead of NIL i.e. the category under which the original “NIL” GST RFD-01/01A was filed.
The filed GST RFD-01/01A should pertain to the same period for which NIL refund application was filed.
The application shall be accompanied with all supporting documents, which is otherwise required to claim a refund.

Procedure of Granting Refund

Once the authorised office receives the application for a refund, he is required to calculate the admissible amount as per applicable provisions given in para 3 of Circular No.59/33/2018-GST dated 04.09.2018 (wherever applicable).
Upon detailed scrutiny of the application, if the authorised officer accepts the whole or any part of the amount claimed as payable for refund, in such case he shall request the taxpayer in writing to debit such amount from his electronic credit ledger through FORM GST DRC-03.
Once the proof of such debit is received by the proper officer, he shall issue the refund order and payment order in form GST RFD-06 and form GST RFD-05, respectively

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