Thanks to the new online system, GST refunds will be seamless, pick up speed: GSTN chief

Our Bureau New Delhi | Updated on September 26, 2019 Published on September 26, 2019

Disbursement of refunds to get faster, says GSTN chief

Goods & Service Tax (GST) assesses are now going to have seamless refund mechanism, as GSTN, the technology platform of the indirect tax regime, has switched to a new system.

The ‘Online Refund Processing and Single Disbursement’, will facilitate taxpayers to file refund application online and help the tax officers to process the application there itself. All communications between the taxpayers and the tax officers will also be online.

What is ‘Online Refund Processing and Single Disbursement’ ?

The new system has been made effective from September 25 on the GST portal. All refund applications filed before September 26 will be processed manually under the old refund process.

Prakash Kumar, CEO of GSTN, said that the new system will boost the disbursement speed of refunds and further improve the GST compliance. Taxpayers can view the various stages of processing of their refund application on the GST Portal and can give replies to notice, if any, online on the GST Portal now. They will also be given information via SMS and Email, at important stages of processing of their refund application.

“Most importantly, the payment of amount will now be done from one disbursement authority i.e. PFMS (Public Financial Management System) unlike the earlier method where sanction was done by one authority but payment was made by State and Central Authorities separately,” he said.

As per the system, all administrative control over 90 per cent of taxpayers having turnover below Rs. 1.5 crore has been vested with State tax administration and over 10 per cent with the Central tax administration. Further all administrative control over taxpayers having turnover above Rs.1.5 crore has been divided equally in the ratio of 50 per cent each for the Central and State tax administration.

Earlier refund process

Earlier, the refund processing was done for both Central and State GST by one tax authority to whom the taxpayer was assigned administratively, but disbursement was done by accounting authorities of central and state tax departments separately.

This used to lead to delay on account of sharing of sanction order with counter-party accounting authority through that tax authority. The new system has done away with this and after processing is completed by the tax officer, the sanctioned amount will get credited to the bank account of the taxpayer.

The refund is sought by taxpayers largely on account of exports. The other categories being refund of excess Input Tax Credit, inverted duty (where tax on inputs is higher that the tax on output), refund of excess cash in cash ledger etc. As far as refund of export of goods on payment of IGST (Integrated Goods & Service tax) is concerned, the same has been fully online since inception.

For other refunds like export of services, inverted duty structure cases, accumulated ITC etc., the taxpayers applied for refunds online, on the GST Portal, along with the required statements in refund form. The refund application was transmitted electronically to the dashboard of the tax officer. However, the processing of the refund application by the tax officer was done manually, which included issue of deficiency memo, show cause notice, payment advice, refund order .

Published on September 26, 2019
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