CBIC Instructions – Procedure relating to sanction, post-audit and review of refund claims
by ReinHeads Team | Jun 27, 2022
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CBIC Instructions – Procedure relating to sanction, post-audit and review of refund claims
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The Central Board of Indirect Taxes and Customs (‘the CBIC’), GST Policy Wing has issued Instruction No. 03/2022-GST dated 14 June 2022 (‘the Instruction”) to bring uniformity in the practices and procedures to be followed by the proper officers in relation to sanction, post-audit and review of refund claims.
- Sanction of Refund
Instructions has been provided to the proper officer to issue a detailed speaking order providing the basis of sanction/rejection of the refund order. In order to ensure uniformity in issuance of the refund order, the proper officer needs to verify and mention the details as provided in the Instruction.
Key details are summarised hereinbelow:
1. Detail for all category of refund claims
- Period of refund claim and whether the same has been filed within the timelines
- Detail of Deficiency Memo (if any) issued in respect of said refund claim
- Details of documents/statements uploaded along with the refund claim
- All the due returns have been filed by the applicant or not and any dues are pending for recovery from applicant
- Reply of the applicant and personal hearing details in case any SCN issued to applicant and also mention the discussion and finding in respect of applicant submission along with case laws on which relied upon in deciding the matter.
2. Additional details in case of the following refund applications
| Nature of Refund application |
Key Details to be mentioned in the refund order |
| Refund of accumulated ITC on account of zero rated supplies/inverted duty structure or refund of IGST paid on zero rated supplies |
- Whether the amount of ITC has been debiting from the electronic credit ledger at the time of filing refund
- Whether ITC on account of capital goods has not been taken into calculation and ITC on account of input services and capital goods has not been taken in case of inverted duty structure
- Whether IGST has been paid through GSTR-3B return where refund is on account of IGST paid
- Whether refund of ITC restricted to only those invoices which are reflected in GSTR-2A/2B
- Whether relevant FIRC/SEZ endorsements has been provided in case of zero rated supplies
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| Refund of tax paid on supplies regarded as deemed export |
- Whether necessary procedure was followed while making while procurement/supplying of goods regarded as deemed exports.
- Whether it has been verified that no ITC has been claimed by the recipient when refund is claimed by supplier
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| Refund of excess balance in cash ledger |
- Whether the amount claimed has been debited from the electronic cash ledger
- Whether the amount to be refunded has been calculated in accordance with the provision of section 49(6) of CGST Act
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| Refund filed under the other categories of refund except those mentioned above |
- Whether documents furnished/uploaded along with the refund claim from the source like FORM GSTR-1, FORM GSTR-3B, ICEGATE portal etc
- Detail of verification conducted along with reasoning for grant/rejection of refund in speaking order
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- B. Post-Audit & Review
- As per extant practice, all refund orders are required to be reviewed for examination of legality and propriety of the refund order and for taking a view whether an appeal to the appellate authority under provisions of sub-section (2) of section 107 of the CGST Act is required to be filed against the said refund order.
- Post-audit and review would be conducted only for the refund cases in which the refund claim is amounting to INR 1 Lakh or more till further instructions.
- Post-audit should be concluded within 3 months from the date of issuance of FORM GST RFD-06 order. Further, the findings of the post-audit shall be communicated to the review branch within the said time period of 3 months.
- Review of refund order shall be completed at least 30 days before the expiry of the time period allowed for filing the appeal under sub-section (2) of section 107 of the CGST Act.
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