Certification of GST refund - Key Areas to be checked before Certification of GST Refund

Hello Friends ...Welcomes you in a new blog. Today's blog is more relevant for those who are in practice of GST. An authentication or certification ensure government that particular things are right as authorized by a Independent professional having integrity and objectively. So it's our duty that we maintain the integrity and will able to ensure government that what we have certified is correct and true in every manner. As I told earlier today's blog is about certification in GST and if I make it more precise and particular, I am talking about GST refund certification. No need to mention the section which empower a cost accountant to certify the same but we will discuss about the some  key areas that a cost accountant must check before certifying a refund. We can follow these steps to avoid any discrepancies. 

Step 1 

The First step is first you need to check client eligibility for refund. The following situations are only eligible for refund :-

1. Zero-rated supplies: Ensure the refund claim relates to zero-rated supplies (export of goods/services or supplies to SEZ).

2. Excess Input Tax Credit (ITC): Check if the taxpayer has accumulated ITC due to the inverted duty structure.

3. Refund of excess balance in the electronic cash ledger: Verify if the taxpayer is claiming a refund of excess balance in their cash ledger.

4. Deemed exports: Confirm if the refund claim is for deemed exports, if applicable.

5. Others: Refund claims for wrong payment of tax or any other eligible ground. 

After checking eligibility as mentioned in step 1 we need to move to step 2 which is Reconciliation of Turnover.

Step 2 

Reconciliation of Turnover 

1. Taxable Turnover: Verify the reconciliation of the taxable turnover declared in the refund application with the turnover in the books of accounts and GSTR-1, GSTR-3B.

2. Zero-rated Turnover: Check for proper classification and reconciliation of zero-rated supplies.

After completion of Step 2 we will move forward in step 3 where we will ensure matching of ITC.

Step 3 

Matching of input tax credit 

1. ITC in Refund Claim: Ensure that the ITC claimed as refundable is matching with the ITC ledger and GSTR-2A/GSTR-2B.

2. Proper Classification of ITC: Confirm that the ITC used for zero-rated supplies or refunds under inverted duty structure is properly accounted for and not used for other purposes.

After completion of Step 3 we must move forward toward step 4 which is more crucial and that is supporting documents. 

Step 4 

Supporting documents 

1. Ensure all required documents, such as invoices, export documentation (if applicable), bill of exports, and shipping bills, are available and valid.

2. Verify documents for proof of payment of taxes for deemed exports or other claims.

Step 5. 

Compliance with time limit

 

- We need to ensure that application is filed within the allowed time frame as per GST act which is 2 years from the relevant date.

Step 6

 

 Tax Payment verification 

1. Cross-check if taxes have been paid correctly and reflect in GSTR-3B.

2. Check for any discrepancies in tax payment and filing.

Step 7

 

Refund Formula 

1. For zero-rated supplies, check whether the refund formula as prescribed in the rules has been adhered to: Refund Amount=(Turnover of Zero Rated Supply ×Net ITC)/Adjusted Total Turnover​

2.Confirm the correct computation of ITC and turnover.

Step 8

Check Any pendency's 

Check there are no pending dues such as demand order , penalties or liabilities against the taxpayer that may hinder the assesses. 

Step 9 

Others things need to be considered as well such as related circular, notification that may effect refund process. 

By ensuring these steps the cost accountant can ensure that refund certification has been done as per GST norms. However this list is illustrative purpose only and there can be more aspects that needs to be checked before certifying the refund. Hope this information will assist our beloved colleagues in their practical life and I am also expecting that you will provide your valuable feedback and suggestions on this topic so that we can ensure that A certificate issued by a cost accountant is ultimate guarantee of surety and trust to the stakeholders of information .

Thanks and Regards

CMA Mohit

+91 7678359179,

Disclaimer- This information is education purpose only and should not be considered as legal advice. We shall be not responsible if any discrepancies still remains after following these steps. Professional must use his/her professional skepticism and updated GST rules and circular and notification to adhere the compliances.