Processing of Refund of Claim [ Section 54(5) & 54(7) ] - GST Ready Reckoner - GST

Processing of Refund Claim [ Section 54(5) ] if, on receipt of any refund application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund referred to in section 57 of CGST Act 2017 . Time limit for Refund [ Section 54(7) ] The proper officer shall issue a order for acceptance / rejection of refund within 60 days from the date of receipt of application. Threshold limit for claiming Refund under GST [ Section 54(14) ] No refund under section 54(5) or (6) shall be paid to an applicant, if the amount is less than one thousand rupees. Important Notification Circular Proper officer relating to provisions other than Registration and Composition under the Central Goods and Services Tax Act, 2017. [ Circular No. 3 / 3 / 2017 - GST dated 05-07-2017 ] Clarification on refund applications involving amount claimed less than rupees one thousand. [ F. No. 349/54/2017-GST dated 01.06.2018 ] Clarification on refund applications involving amount claimed less than rupees one thousand. [ F. No. 349/54/2017-GST dated 08.05.2018 ] Relevant Case Law Applicability of concept of unjust enrichment in GST The Hon ble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. v . Commissioner of Central Excise Customs 2005 (3) TMI 116 - SC has defined unjust enrichment as under: ( a ) Unjust enrichment means retention of a benefit by a person that is unjust or inequitable. Unjust enrichment occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else. ( b ) That no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of unjust enrichment arises where retention of a benefit is considered contrary to justice or against equity. The concept is inbuilt in section 54(5) read with section 54(8) of the CGST Act, 2017. Every claim of refund sanctioned will be credited to the Consumer Welfare Fund in terms of section 54(5) of CGST Act, 2017. It will, instead of being credited to the fund, be paid to the claimant in situations mentioned in Section 54(8). Thus, the principle will not apply to refund claims arising on account of exports, refund of accumulated ITC on account of exports and inverted rate structure, where wrong tax is paid (IGST instead of CGST+SGST vice versa ), where tax has been paid on advances but no supply is made and no invoice has been issued. These are cases where the principle of unjust enrichment is not applicable and the proper officer need not satisfy himself whether the incidence of tax has been passed on to any other person in such cases. In all other cases, refund will be sanctioned to the claimant only if the claimant demonstrates that the incidence of tax has not been passed on to any other person.