How to get refund of amount shown in gst credit ledger

Refund of Amount Shown in the GST Credit Ledger

Guide to get GST refund of amount shown in GST credit ledger

Indirect tax known as the Goods and Services Tax (GST) went into effect in India on July 1st, 2017. Input Tax Credits (ITCs) are available to businesses and organizations under the GST regime for the GST paid on their inputs. If eligible, then an application may be filed to get refund amount shown in GST credit ledger and this ITC can be used to offset the GST payable on their outputs.

They can sometimes be unable to use an ITC balance which stands in the business’s ECL.

This could result for lots of reasons, including an establishment that uses exempt or zero-rated suppliers or who has an inverted tax structure.

Businesses can request a refund of their ITC balance in ECL if they have any. Applications for refunds can be submitted online using the GST portal.

Procedure for Refund Amount Displayed in the GST Credit Ledger Prior to Cancellation of Online GST Registration.

Even prior to the cancellation of its GST registration, a business is entitled to a return of the amount shown in its GST credit ledger. But in order to accomplish that, certain criteria need to be fulfilled:

  • The company must have submitted all necessary GST returns online.
  • The company must not have violated GST legislation in any significant way.
  • The businesses must not have claimed any ineligible input tax credits.

A GST refund application in FORM GST RFD-01 may be submitted by the company if these requirements are fulfilled. The application must be filed within two years after the date the credit balance was generated.

The GST department will process the refund application and issue a refund order after it is lodged. Within 30 days after the refund order date, the money will be credited to the company’s bank account.

How to request a refund of the amount indicated in the GST credit ledger prior to GST cancellation?

To obtain a refund of the amount shown in the GST credit ledger prior to GST cancellation, complete these steps:

  1. You must first use your registered login credentials to log in to the GST Portal.
  2. You may see the Refund tab on this page. Proceed to the “Refund” tab.
  3. You then have to select the “New Refund Application” button.
  4. Choose the refund type that you wish to request for. Choose “Refund of amount shown in ECL” in this instance.
  5. Complete the refund application’s fields. This covers the requested refund amount, the justification for the refund, and any additional papers.
  6. Submit now a refund request.

Your refund application will be reviewed by the GST officer, who will also issue a refund order and you will get the refund amount in your bank account within 30 days of such refund order.

Important things to remember:

When requesting a refund of the amount mentioned in the GST credit ledger prior to the cancellation of GST, keep the following points in mind:

  • Applications for GST refunds must be filed within two years after the credit balance’s creation date.
  • The refund application must be submitted with the required supporting documentation.
  • Before completing the refund claim, GST officers may request more details or additional documentation.
  • The GST authorities may reject the refund application if it is not full or if there are gaps in the information submitted.

It is comparatively easy to request a refund of the amount indicated in the GST credit ledger before GST is cancelled. However, you need to make sure you meet all the requirements for eligibility and that your refund claim was submitted accurately.

Also read: What are the reasons for suspend of GST Registration