This circular provides clarity on the manner and procedure for filing and processing GST refund applications by the Canteen Stores Department (CSD), which is entitled to a refund of 50 percent of the GST paid on inward supplies of goods used for further supply to Unit Run Canteens or authorised customers.

It is clarified that the refund available to CSD is invoice-based and not a refund of accumulated input tax credit. Refund claims are required to be filed on a quarterly basis. Until an online facility is made available, such claims are to be filed manually in FORM GST RFD-10A with the jurisdictional tax authority, along with prescribed documents such as undertakings, declarations, copies of GSTR-3B, GSTR-2A, relevant invoices, and bank account details.

The circular also lays down the procedure for processing and sanction of refund claims. On receipt of a complete application, an acknowledgement or a deficiency memo is to be issued within 15 days. The proper officer is required to verify return filing status, scrutinise the claim with reference to GSTR-3B and GSTR-2A, and ensure that the refund sanctioned is limited to 50 percent of the applicable central tax, state/UT tax, and integrated tax paid. Refund orders and payment advice are to be issued manually, and the sanctioned amount is to be credited through the prescribed accounting and payment system.

Further, the circular clarifies that while the refund application is to be filed with the assigned jurisdictional authority, payment of the sanctioned refund will be made separately by the Central tax and State/UT tax authorities for their respective tax components, with due coordination between the authorities.