GST Policy Wing Clarifies Refund Process

The GST Policy Wing has finally come out to clarify the process of refund through form RFD-01A. The taxpayers had raised doubts over the processing of their refund application when wrong administrative authority is assigned on the GST portal.

The field formations had reported that the administrative assignment to the taxpayers was not in-line with the jurisdiction applicable to such taxpayers. There are instances of the common portal assigning the refund application to the Central tax authority when it had to be assigned to the State tax authority and vice-versa.

In case the application is wrongly mapped, then the assigned tax authority should electronically re-assign the application to the concerned tax authority. But, the tax authorities have reported that this facility is not yet available on the common portal.

The tax authorities have raised doubts on processing refunds for applications that were wrongly assigned. There was a lack of clarity regarding their power to refund applications that were erroneously transferred by the common portal.

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The Policy Wing has clarified this by saying that there should be no holding up of the refund on applications electronically assigned by the common portal. The designated tax authority should first process the refund and then inform the common portal of the incorrect mapping so that future refunds are assigned to the correct tax authority.

The taxpayers and tax authorities are relieved with the Policy Wing’s clarification. The refunds are expected to be processed faster than ever before.

The policy wing has exercised its power under Section 168(1) of the Central Goods and Services Tax Act (CGST Act), 2017 to clarify the issues. Until 31 December 2018, the refunds were processed after the submission of printed copies were made to the jurisdictional tax office. Henceforth, there is no requirement of submitting refund applications to the jurisdictional tax office as per the Circular No.79/53/2018-GST issued on 31 December 2018. The common portal now must link each the refund application to the right jurisdictional tax authority.