GST Refund Process with Single Authority Disbursement

In a bid to enable seamless GST refund processing and communication between taxpayers and tax officers, the GSTN portal has been incorporated with an Online GST Refund Processing System. As per the new refund system, the taxpayer shall need sanction order from a single authority to have his refund disbursed, unlike the previous system wherein the orders from the both Central as well as State/UT authorities would be required to sanction the GST refund, which would further slow the process down.

In order to help taxpayers understand the electronic refund processing, the following advisory was released by the CBIC:

Changes to be noted

GST Refund applications filed by the taxpayers in RFD-01 form shall be processed electronically/ online by the tax-officer and all communications between the tax officers and the taxpayers shall take place electronically.
The GST refund amount shall be disbursed by the accredited bank of Central Board of Indirect Taxes and Customs (CBIC) through the Public Financial Management System (PFMS) after bank account validation.

Online GST Refund Processing and Single Authority Disbursement Advisory

The taxpayers are advised to make a note of changes in various refund forms as enlisted below:

Form RFD 01 – GST Refund Application by the Taxpayer

The Taxpayer will be able to file his refund application through form RFD 01, while the previous refund form – RFD-01A has been disabled on the portal.
However, the taxpayer shall be able to view the status of RFD-01A applications also along with the new ones.
The bank account details mentioned in the refund application shall be validated by PFMS after filing of RFD-01. The taxpayers must ensure that the bank account details selected in the refund application are valid and correct.
The taxpayer will need to change/ edit the bank account details (through a non-core amendment in registration in REG-14) if there is a failure of bank account validation by PFMS. After performing this step, the taxpayer needs to enter the updated bank account by clicking on ‘Update Bank Account’ functionality provided with the ARN of the refund application.
The taxpayer shall be able to view the status of bank account validation on his dashboard. It will also be communicated through e-mail/ SMS.

Form RFD 02 – Acknowledgment by Tax Officer

The tax officer shall issue RFD-02 electronically to the taxpayer.
The taxpayer shall be able to view the acknowledgement in RFD-02 on his dashboard.
The taxpayer will also receive communication through email and SMS.

Form RFD 03 – Deficiency Memo by Tax Officer

The tax officer issued RFD-03 manually and there was no auto re-credit of ITC/cash.

Form RFD 04 – Provisional GST Refund Order by Tax Officer

The tax officer shall issue RFD-04 electronically to the taxpayer.
The taxpayer shall be able to view the provisional sanction order in RFD-04 on his dashboard.
The taxpayer will receive communication through email and SMS.

RFD 05 – Payment Order by the Tax Officer

The tax officer shall issue RFD-05 electronically to the taxpayer. The tax officer is not required to send the copy of RFD-05 to the central nodal authority and state AAs.
The taxpayer shall be able to view the payment order in RFD-05 on his dashboard.
The bank account details mentioned in the refund application shall be validated by PFMS after issuance of RFD-05 by the tax-officer.
The taxpayer will need to change/ edit the bank account details (through a non-core amendment in registration in REG-14) if there is a failure of bank account validation by PFMS. After performing this step, the taxpayer needs to enter the updated bank account by clicking on ‘Update Bank Account’ functionality provided with the ARN of the refund application.
The taxpayer shall be able to view the status of bank account validation and disbursement on his dashboard.
The taxpayer will receive communication through email and SMS.

RFD06 – Final GST Refund Sanction or Rejection order by the Tax Officer

The tax officer shall issue RFD-06 electronically to the taxpayer.
The taxpayer shall be able to view the final sanction/ rejection order in RFD-06 on his dashboard

Form RFD 7B – Withholding order by the Tax Officer

The tax officer shall issue RFD-07B electronically to the taxpayer.
The taxpayer shall be able to view the withholding order in RFD-07B on his dashboard.
The taxpayer will receive communication through email and SMS.

Form RFD 08 – Show Cause Notice by the Tax Officer

The tax officer shall issue RFD-08 electronically to the taxpayer.
The taxpayer shall be able to view the show cause notice in RFD-08 on his dashboard.
The taxpayer is expected to give reply to the SCN within 15 days of receipt of the SCN. If the taxpayer does not respond within 15 days of the issuance of SCN, the tax officer can take action on the refund application.
The taxpayer will receive communication through email and SMS.

Form RFD 09 – Reply to Show-Cause Notice by the Taxpayer

The taxpayer is required to reply the SCN electronically/online in RFD-09 form which would be available on his dashboard.
The taxpayer shall be able to reply to the SCN and upload supporting documents electronically through RFD-09.
The tax officer may not process the reply to the SCN if not given electronically in RFD-09 by the taxpayer.

Form PMT 03 – Order for Re-credit of Rejected Amount by the Tax Officer

The tax officer shall issue PMT-03 electronically.
With the issuance of PMT-03, the inadmissible ITC shall get re-credited to the electronic credit ledger of the taxpayer automatically.
The taxpayer is required to give an undertaking that he will not file an appeal against the refund order if he/she desires to get a re-credit of the rejected amount. This undertaking has to be submitted to the tax officer manually.
The taxpayer shall be able to view the re-credit order in PMT-03 on his dashboard.

Benefits of the Online Refund Processing

Taxpayers and Tax officers will be able to communicate with each other online
The taxpayer will be notified via SMS and Email at every important stage of their GST refund application
The taxpayer will be able to keep a track of his GST refund status through the dashboard.
The taxpayer will be able to reply to any notice received from the tax officer.

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