While assessing the refund form i.e. Form RFD-01, the government officer may find some irregularities in the refund application. If the officer has reasons to believe that these irregularities may lead to whole or part rejection of the refund application, then he can disburse the refund on a provisional basis to the extent of 90% of the refund claimed amount. This form in which he specifies the amount of refund to be disbursed on a provisional basis is known as Form GST RFD-04.
Form RFD-04 needs to be issued within 7 days from the date of generation of acknowledgement -Form RFD-02. And Form RFD 03 is the deficiency memo which is issued by the officer.
The refund shall be provided on a provisional basis, only if a person claiming refund has not been prosecuted for any offence of the Act or under an existing law where the amount of tax evaded exceeds INR 250 Lakhs.
Form RFD-04 can be issued in the following cases:
- Refund in case of export of services with payment of tax
- Refund of accumulated ITC on account of export of goods/services under Bond/LUT without payment of integrated tax.
- Supplies made to SEZ Unit/SEZ Developer with payment of Tax
- Supplies made to SEZ Unit /SEZ Developer without payment of Tax
Following are the details of Form RFD-04:
The form starts with Sanction Order No and it is more like a letter which addresses the applicant.
The body of this order contains:
- Application reference number (ARN) with Date
- Acknowledgement Number with Date
- A table which provides details of the amount sanctioned amount claimed and the bank account in which the refund is processed.
A total of 9 points are mentioned in this table of Form RFD-04:
- Amount of refund claimed: This refers to the actual amount which is claimed by the applicant
- 10% of the amount claimed as the refund (to be sanctioned later): This is the balance amount which is kept on hold due to irregularities in the refund application
- Balance amount (i-ii): This is simply the difference between point (i) and (ii) above
- Amount of refund sanctioned: This is the amount which has been sanctioned in the order. There have been cases where the balance amount in (iii) above and amount sanctioned in (iv) are different. This is mainly because it is not necessary that the office sanctions complete 90% in one single order.
- Bank Account No. as per the Application: This is the bank account number in which refund is processed and the amount is credited.
- Name of the Bank: The name of the bank in which refund is credited
- Address of the Bank/Branch: The address of the bank/branch in which refund is credited
- IFSC: IFSC code of the branch in which refund is credited
- MICR: MICR code of the branch in which refund is credited.
In our next blog, we will cover RFD-05.
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