GST
Refund withheld for pending returns or dues
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Facts
Sec 54(10) allows the officer to withhold a refund where you have not filed returns or to deduct unpaid tax, interest or penalty that is due under the Act. The adjustment is recorded in RFD-07.
Provisions and law
- Sec 54(10), CGST Act 2017Refund may be withheld or adjusted where returns are pending or dues are unpaid
- Rule 92, CGST Rules 2017Final refund order RFD-06, adjustment RFD-07 and notice RFD-08
Analysis
If an old confirmed demand of ₹1,50,000 is pending and your refund is ₹4,00,000, the officer can pay ₹2,50,000 and adjust the rest. If the demand is under appeal with pre-deposit paid, recovery of the balance is stayed, and you can point this out. Keep all returns filed before claiming, because a missing return alone can hold the whole refund.
Conclusion
- Check the electronic liability register for pending demands
- File any pending returns before claiming
- If a demand is under appeal, send proof of appeal and pre-deposit
- Get the RFD-07 order in writing
A Savvy can do this for you
Refund of ITC on exports without payment of tax, RFD-01
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