This circular provides comprehensive guidelines for implementing a fully electronic refund process under GST through FORM GST RFD-01, along with a single disbursement system for refund amounts under all tax heads.

With effect from 26 September 2019, the refund module on the GST common portal has been made fully functional, enabling end-to-end electronic filing and processing of refund claims. Accordingly, earlier circulars prescribing manual or partly manual procedures have been superseded for refund applications filed on or after this date. Refund applications filed prior to this date will continue to be processed under the earlier manual procedure.

The circular specifies the categories of refunds that must now be filed electronically in FORM GST RFD-01, including refunds related to exports, SEZ supplies, inverted duty structure, deemed exports, excess tax payment, excess cash ledger balance, and refunds arising out of orders or assessments. Physical submission of refund applications or supporting documents is no longer required. All acknowledgements, deficiency memos, provisional refunds, final orders, and payment orders are to be issued electronically within prescribed timelines.

Detailed procedures are laid down for issuance of deficiency memos, grant of provisional refunds, re-credit of rejected input tax credit, scrutiny of refund claims, and treatment of special cases such as export refunds, compensation cess, inverted tax structure, deemed exports, and transitional credit. The circular also clarifies timelines for sanction and interest liability in case of delay.

To reduce hardship to taxpayers, the circular introduces a single authority disbursement system, under which the officer (Central or State) processing the refund will issue both the sanction order and payment order for all tax components. Refund amounts will be credited directly to the taxpayer’s validated bank account through the PFMS system, ensuring faster and more transparent refund processing.