Refund under VAT(Section 18,39,40,41 Form 29,30,30A 30B to 30D)

United nations and Constituent Agencies

Schedule G Organizations (United nations and its constituent agencies) are entitled to

§refund of tax paid for Goods purchased in the state

§On every single purchase

§From a taxable person or registered person

§Exceeding Rs. 5000

§Excluding Tax Amount

§On Application in Form 29A

§Certificate from head of the organization that goods are purchased for use in official functioning of organization to be furnished

§Note; Refund is allowable even if tax not paid

§Refund is allowable even for purchases from registered person

Direct Exporter

A taxable direct exporter entitled to claim refund in respect of

§Input tax paid on goods exported out of territory of India

§Application in Form 29

§Copy of Invoice issued to foreign buyer

§Bill of lading, Airway Bill, Shipping Bill or similar documents containing “Let export order” endorsed by customs authorities

§Customs clearance Certificate in case of export to Nepal or Bhutan

§Any other document specified by the government.

§Direct exporter may opt filing of VAT 15 monthly, by making an application to Designated Officer (Rule 36(1) Fourth proviso)

Note:

§1. Refund allowable for input tax on goods and not for excess of ITC over output tax. Hence  refund may be allowable even if it exceeds ITC carried forward.

§2.  Refund allowable for input tax paid only and not for tax that may be payable. Hence exporter   to prove that tax has been paid on purchases.

§3. As per section 13(8), if refund is claimed under 18(2), ITC on such goods shall be reversed.

       But if reversal results –ve ITC, whether tax shall be deemed payable not mentioned.

§4. Since refund is applied under 18(2) and not under section 39, the provision of provisional refund of 75% on basis of monthly return may not be available

Penultimate Exports

§
Refund entitlement for excess of ITC over Output tax

§Application in Form 29

§Copy of Bill of lading, Airway Bill, Shipping Bill or similar documents containing “Let export order” endorsed by customs authorities

§Copy of Invoice issued to purchaser

§H Form

§75% refund against monthly VAT-15  

§

Refund Arising from Court Order

§Application in Form 29

§Certified copy of Court Order

§Refund entitlement for excess of ITC over Output tax

§Application in Form 29

§Copy of Bill of lading, Airway Bill, Shipping Bill or similar documents containing “Let export order” endorsed by customs authorities

§Copy of Invoice issued to purchaser

§H Form

§75% refund against monthly VAT-15

§       Refund Arising from Court Order 

§Application in Form 29

§Certified copy of Court Order

 Excess payment of Tax, penalty, Refund or Excess of ITC in other cases

§Application in Form 29

§

§Form C/D/F/H, E1 or EII

           

§Person claiming refund to attach Form C, D, EI,EII, F, H,I necessarily . Requirement of furnishing these documents along Annual Statement VAT20 obviated. (Rule 52(4)) w.e.f 08-10-2009 and now required to furnished along refund application

§Also covers refund of tax resulting from rectification u/s 26(4)

Application of Excess Credit

§First excess shall be applied towards recovery due in respect of notice u/s 29 or any other dues

§Tax payable on return u/s 26 for any subsequent period shall be adjusted with refund

§Amount of tax, penalty, interest or all of these shall  first be adjusted against refund before making adjustment of tax payable for return of subsequent period.

§Where excess refund is made for any period, the same shall be adjusted against future refund or future ITC available to such person u/s 13 (Rule 52(13))

   Excess Tax

 However if a person on discovering any error or omission in his return finds that he has paid excess tax he can not adjust excess tax paid against ITC and has to apply for refund (Section 26)

§ Monthly VAT return

§Where monthly VAT-15 is filed,

§The designated officer shall provisionally allow 75% of the amount of claim against submission of  indemnity Bond

§Thereafter receipt of quarterly return DO shall cross check the transactions and after satisfying about genuineness of claim shall determine the final amount of refund.

Misc.

§The Refund may be in form of Refund Order or Refund Adjustment Order

§Refund up to Rs. 1 lakh to be granted by DO and refund above 1 lakh to be granted by AETC

§If refund is found inadmissible, a notice shall be issued to applicant to show cause as to why refund should not be rejected. If DO not satisfied with reasons, he may reject the application for refund.

§Refund to be issued with in 60 days from date of submission of application for refund (R.52(10))

Section 40: Interest for delayed Refund

§
@ ½% per month for month or part of month simple interest after expiry of 60 days

§Till date of refund

§Excluding period of delay attributable to dealer wholly or partly

§Any dispute regarding exclusion of period to be resolved by Commisioner.

 Section 41: Power to withhold refund

§Where order giving rise to refund is subject matter of appeal or further proceeding or

§Any other proceeding under Act is pending

§And Officer is of the opinion that grant of refund is likely to adversely affect the revenue, he may

§With previous approval of Commissioner

§Withhold refund till such time as may be determined

§After 90 days from withholding order, interest @1/2% as per Section 40 shall be payable along amount of refund ultimately determined.

Withholding of refund

§Orders withholding refunds of crores of rupees should not be passed mechanically and authorities working under the Act are required to be sensitized that entrepreneur who have limited liquidity are likely to suffer in their business enterprise. If the business enterprise comes to stand still, it does not advance the interest of the revenue because the state would stop earning revenue when business of entrepreneur comes to grinding halt. (National Agricultural Co-Op Marketing Federation of India Ltd)

Unjust Enrichment

§Where duty of burden has been passed to the customer the dealer can not claim that since duty is contrary to law hence duty should  be refunded because it will tantamount to Unjust Enrichment.

Swan Stone Multiplex Cinema (Supreme Court)