GST-Refund-Claim-By-Order

Re-crediting order under GST

Re-crediting order under GST

If the proper officer rejects (whether wholly or partially) the refund claim filed by the applicant. Then, in such case, the proper officer is required to issue an order for re-credit of the rejected amount. Such an order for re-credit will be issued in Form GST PMT-03. The present article explains the types of refund and relevant debit ledger; provisions relating to refund claim and rejection of refund claim and provisions relating to the order to re-credit.

Various types of refund vis-à-vis ledger debit

The following table explains the different types of refund and corresponding ledger from which the amount gets debited-

Type of refund Ledger from which the amount is debited
Refund of the excess balance of cash in the electronic cash ledger. Electronic Cash Ledger
Refund of accumulation of input tax credit on account of inverted duty structure. Electronic Credit Ledger
Refund of accumulation of input tax credit on account of export of goods/ services without payment of tax. Electronic Credit Ledger
Refund on account of supplies made to Special Economic Zone unit or a developer without payment of tax. Electronic Credit Ledger
Refund to the recipient of deemed export supplies. Electronic Credit Ledger

Provisions relating to refund claim and rejection of refund claim

The flow of filing of refund application, the process of the same by the proper officer and action of the proper officer is explained hereunder-

Under Goods and Services Tax, the taxpayer can claim the refund of excess GST/ interest or any other amount paid by filing a refund application. As and when the refund application is filed, the electronic cash ledger or electronic credit ledger gets debited with the amount of refund claimed.

After scrutinizing the refund application, the proper officer will take any of the following action-

  • Allow the refund, if found appropriate, or
  • Reject the refund, if found inappropriate, or
  • Partially allow the refund.

Cases, wherein, the refund is allowed, an order in Form GST RFD-06 will be issued. However, in case of partial or full rejection of refund claim an order in Form GST PMT-03 will be issued.

Provisions relating to the order to re-credit

In case the amount claimed as refund is rejected either partially or fully. The amount already debited, to the extent of rejection, shall be re-credited to the electronic credit ledger.

However, such re-credit is possible only based on the re-credit order passed by the proper officer in Form GST PMT-03. Order in Form GST PMT-03 will contain following details-

  • Basic details like-
    • GSTIN of the applicant whose refund has been rejected.
    • Name, trade name and address.
  • Details of debit entry like-
    • Period or tax period to which the credit relates.
    • Ledger from which the debit entry was made for claiming a refund.
    • Debit entry number and date.
  • Refund application and rejection details like-
    • Refund application reference number and date.
    • Number and date of order vide which refund was rejected.
  • Details of the amount of credit like-
    • Bifurcation of the amount of credit of tax, interest, penalty, fee, other and total.

Several important points worth noting

  • In case the refund application is incomplete, the proper officer will issue a deficiency memo. In such cases, wherein the deficiency memo is issued, the re-crediting order in Form GST PMT-03 is not required.
  • Before issuing re-crediting order in Form GST PMT-03, the proper officer is required to take an undertaking from the applicant stating that the applicant shall not file an appeal against the order.

Post by poonamgandhi

CA Poonam Gandhi is a Chartered Accountant and a Lawyer. With a wide practice experience and deep understanding of different laws and taxes, she has been an independent professional writer in the field of taxation, finance and laws.