17.05.2022- Learn the concept Refund under GST

Learn the concept Refund under GST

GST refund is a process in which, registered taxpayers can claim excess amount if they paid more than the GST liability. They can claim after submitting a refund application with the necessary details in the GST portal. The GST regime has provisions relating to refunds, and it aims at streamlining and standardizing the procedures about refunds under GST. Therefore, a standardized form has been created to make claims for refunds.

Let us understand the said provision through the practical Case Scenario.

Case Scenario

Gold Pvt. Ltd. Supplies various goods and services within and outside India. The company is registered under GST in Haryana. The company exports goods without payment of tax in accordance with the provisions of IGST Act, 2017.

The company has made following supplies during the tax period:

Sr. No. Particulars Amount
1. Export of Goods to Germany  ( Export duty is levied on goods) 7,00,000
2. Supply to Export oriented unit ( ITC claimed by recipient) 5,00,000
3. Domestic Supplies

(Tax on output- 5%)

(Tax on Input Used – 18%)


ITC available for the above tax period:

Sr. No. Particulars Amount
1. On Input – Taxable supplies

                     On export  of exempt supplies   



2. On capital Goods 1,20,000

Calculate the maximum amount of refund admissible.


Computation of maximum amount of refund admissible to Gold Pvt. Ltd.:

Particulars Amount
Export of goods to Germany (1) Nil
Domestic supplies of taxable goods (2) 75,000
Supply of Goods to EOU (3) Nil
Total refund claim admissible 75,000

1. As per Sec 54 of CGST Act, 2017, Refund of unutilized ITC is not allowed if goods exported out of India are subject to export duty.

2. In case of refund on account of inverted duty structure, maximum amount of refund available is:

Maximum refund amount = (Turnover of inverted rated supply * Net ITC / Adjusted total turnover) – Tax payable on such inverted rated supply

Thus, Maximum refund = (10,00,000 * 3,50,000 / 22,00,000) – 50,000 = 1,09,090

3. In case of deemed exports, the application for refund can be filed by supplier only in cases where the recipient does not avail ITC on such supplies.

Thus, the maximum amount of refund available to Gold Pvt. Ltd. Is Rs. 75,000.

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