What is a refund in GST? Can unused Input tax credit be authorized as a rebate/ refund?

 What is a refund in GST?

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Ans. Refund has been explored in section 54 of the CGST/TSGST Act. “Refund”    comprises

(a) any credit balance amount in the electronic cash ledger so declared in the returns,

(b) as any unutilized input tax credit in respect of

(i) zero-rated supply chain  brought in without payment of tax or,

(ii) where the credit has gathered on account of the rate of tax on inputs because  greater than the rate of tax on output supplies (other than nil rated or fully exempt supply),

(c) tax paid by a specialized agency of the United Nations or any Multilateral Financial Institution and Organization announced under the United Nations (Privileges and Immunities) Act, 1 947, Consulate or Embassy of foreign country  on any inward supply.

2. Can unused  Input tax credit be authorized as a rebate/ refund?

Ans. Unutiled input tax credit can be authorized as refund by the provisions of sub-section (3) of section 54 in the following situations: -

(i) Zero-rated supplies made without payment of tax GST;

(ii) Where credit has gathered on account of rate of tax on inputs being higher than the rate of tariffs on output supplies (other than nil rated or fully exempt supplies). Nonetheless, no refund of the unutilized input tax credit shall be permitted in cases where the goods sent abroad exports out of India are subjected to export duty, and correspondingly  in the CGST/TSGST Act.