Instruction on sanction of GST refund & Post audit of refund orders

1. INSTRUCTION ON SANCTION OF GSTREFUND & POST AUDIT OF REFUNDORDERS https://taxguru.in/goods-and-service-tax/instruction-sanction-gst-refund-post-audit-refund-orders.html CBIC recently issued Instruction no. 03/2022-GST Dated: 14th June, 2022on procedure relating to sanction of refund and Post audit of refundorders. Detailed guidelines for sanction of refund claims had been provided under Circular No.17/17/2017-GST dated 15.11.2017(for manual processing of refunds) and Circular No.125/44/2019-GST dated 18.11.2019(for electronic filing and online processing ofrefunds). However, considering the inconsistent practices and procedures followed by the Department, the Board has issued this specific instructions/guideline to be followed for sanction, post-audit, and review of refund claims to ensure uniformity ofpractices. Instruction issued by department broadly focus on thefollowing: Details to be specified in speakingorder Additional details to be in case of Zero-rated supplies (with or without payment of taxes), Invertedduty Additional details in case of refund of tax paid on supplies regarded as deemedexport Additional details in case of refund of excess balance in cashledger Additional details in case of refund files under the othercategories Post Audit andReview Details to be specified in speakingorder Period for which refund claim has been filed, date of filing and the category ofclaim. Check that the refund for the same period under same/any other category is not filed more thanonce. Details of deficiency memo if any issued previously for the said claim.(RFD-03) Whether the claim has been filed within the limitation oftime. Whether all documents uploaded along with the refund claim. Details of documents furnished by the applicant in soft copy or hard copy and confirm if it is in terms of rule89(2).

2. Whether all the returns due are filed or not, whether any dues are pending for recovery in terms of section 54(10) of theAct. Whether any SCN issued, reply received and Personal hearingdetails. Discussion and finding in respect of applicant’s submissions, case laws reliedupon. Whether provision of unjust enrichment is applicable or not, if yes then Documents if any submitted in terms of section 54(4) of the Act certifying/establishing not passing burden oftax. Additional details to be in case of Zero-rated supplies (with or without payment of taxes), Invertedduty Whether amount claimed as refund is debited from the electronic credit ledger in terms of rule89(3). In case of zero-rated supplies with payment of tax – IGST has been paid through GSTR3B. Calculation given for refund of Export/Zero rated, adjusted aggregate turnover, turnover of inverted duty supplies iscorrect. Whether the calculation of Net ITC considered is correct and verification of admissibility of ITC as per the provision ofLaw. Verification of ITC on capital goods not considered in calculation of netITC. Whether it has been verified that ITC in respect of input service and capital goods not included in net ITC in case of refund under inverted dutystructure. Whether it has been verified that all invoice under net ITC claimed are uploaded by supplier in GSTR-1 and are reflected in GSTR-2A of the applicant. GSTCircular 135/05/2020 dated 31-03-2020. In case of export of goods, verification of Shipping bill/Bill of export withICEGATE in case of export of services, verification of BRC/FIRC or document evidencing receipt of export remittance. In case of supply by DTA to SEZ – Verification that the supply is towards authorized operation as per LOA and the documents are endorsed by specified/authorised officer of the zone or from the SEZ online portal The DTA supplier has received payment for the supply made to SEZ in case of supply of services to SEZ Additional details in case of refund of tax paid on supplies regarded as deemedexport Whether necessary procedure followed while making procurement/supplying of goods as deemed exports. CGST Notification No. 48/2017-Central Tax- Dated: 18th October,2017. Whether ITC claimed w.r.t the deemed exports has been debited from the electronic -credit ledger of supplier. ITC is not claimed by recipient when the supplier is claiming therefund.

3. Additional details in case of refund of excess balance in electronic cashledger the amount claimed for refund has been debited from the electronic cashledger the amount of refund calculated in accordance with provision of section 49(6) of theAct. Additional details in case of refund filed under othercategories Verification of correctness of details/documents with GSTR-1, GSTR-3B, ICEGATE portaletc. The details of verification done with the reasons for granting/rejecting therefund. Whether the amount claimed as refund is debited from the electronic creditledger. Post Audit andReview As already mentioned in Circular 17/17/2017-GST dated 15.11.2017, refund claims shall not be subjected to pre-audit. However, the post-audit of refund claims may continue. Considering the large number of refund claims filed in GST, it has been decided that post-audit may henceforth be conducted only for refund claims amounting to Rs. 1 Lakh or more till furtherinstructions. The following are the guidelines for post-audit and review of refundclaims: All the refund orders are to be transmitted in online facility mentioned above after issuance of refund order in RFD-06. The review and post audit officers shall have access to all documents/statement on ACES-GSTPortal. To undertake the post-audit of a refund order, a Post-Audit Cell under a DC/AC along with superintendents and inspectors may be created in CommissionerateHeadquarters. Post audit to be concluded and findings be communicated within 3 months from the date of issuance of RFD-06order. The review of refund order has to be concluded at least 30 days before the expiry of the time limit for filing of appeal under section 107(2) i.e., 6 months from the date ofRFD-06