This circular provides clarification and a uniform procedure for claiming refund of GST by unregistered persons who have borne the incidence of tax in cases where the underlying supply does not materialize. Such situations commonly arise when agreements for construction of flats or buildings are cancelled, or when long-term insurance policies are terminated prematurely, after the time limit for issuing a credit note under section 34 of the CGST Act has expired.

The circular explains that section 54 of the CGST Act already allows any person, including an unregistered person, to claim refund of tax paid, subject to conditions. To operationalize this, a new functionality has been introduced on the GST common portal enabling unregistered persons to obtain a temporary registration and apply for refund under the category “Refund for Unregistered Person.”

It lays down the detailed procedure for filing the refund application. The unregistered applicant must take temporary registration in the same State or Union Territory where the supplier is registered, complete Aadhaar authentication, and furnish bank account details linked to PAN. Refund applications are to be filed in FORM GST RFD-01 along with Statement 8 and prescribed documents, including a certificate from the supplier confirming that the tax incidence has not been passed on. Separate refund applications are required for invoices issued by different suppliers or suppliers registered in different States/UTs.

The circular clarifies that refund by an unregistered person is permitted only where issuance of a credit note by the supplier is no longer possible due to expiry of the statutory time limit. It also specifies that, for determining the two-year limitation period, the relevant date shall be the date of issuance of the cancellation or termination letter by the supplier. Refunds below ₹1,000 are not admissible. Refund claims will be processed by proper officers in the same manner as other GST refund applications.