Thursday, 16 June 2022

CBIC issues guidelines for review, post-audit and sanction of refund claims under GST



This Tax Alert summarizes a recent Instruction issued by the Central Board of Indirect Taxes and Customs (CBIC) relating to sanction, post audit and review of refund claims under Goods and Services Tax (GST).

Detailed guidelines for processing of refund claims were issued by CBIC vide earlier Circulars. It had been clarified that pre-audit of refund orders is not required to be carried out, but the post-audit of the refund orders may continue based on guidelines.

Subsequently, CBIC received reports of different practices followed by field formations regarding sanction, post-audit and review of refund claims. Accordingly, CBIC has now issued detailed guidelines in this regard.

The guidelines provide the details to be mentioned in a speaking order. It also covers the process and timelines for conducting post-audit and review of the refund claims.

Further, considering the large number of refund claims filed, it has been decided that post-audit may be conducted only for refund claims of INR 1 lakh or more until further instructions.

Comments

a. At present, some of the refund applications are rejected by the department without providing detailed reasoning for such rejection. The guidelines on speaking order may help taxpayer understand and respond to refund rejection order in a timely manner.

b. While the relaxation of post-audit for refund claims of amount less than INR 1 lakh is a welcome move for small taxpayers, increasing such limit may further facilitate ease of compliance.

1 comment:

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