Improving GST Refund Processing: New Guidelines for Haryana Tax Officials

Introduction

The need for an oversight mechanism in GST refund processing has been highlighted through regular feedback from various field formations. In response, the Department of Excise and Taxation, Haryana, has established an internal control mechanism aimed at improving the processing of refund applications.

Recommendations for Refund Processing

1. Processing Refund Applications Exceeding Rs 2 Crore

For applications claiming a tax amount greater than Rs 2 Crore:

• The processing will occur at the Ward level, managed by the Excise and Taxation Officer-cum-Proper Officer (ETO-cum-Proper Officer) and the Tax Inspector, adhering to relevant legal provisions and regulations.
• Before issuing an order in GST RFD-06 format, the ETO-cum-Proper Officer must forward the complete case file, including their recommendations and comments, to the Deputy Excise and Taxation Commissioner (DETC) responsible for the District.
• The DETC will review the case to ensure its propriety and legality. Following their examination, the DETC may provide direction to the ETO-cum-Proper Officer based on the case facts.
• It is crucial that the Tax Inspector, ETO-cum-Proper Officer, and DETC adhere to the stipulated timelines outlined in the Rules.

2. Processing Refunds Up to Rs 2 Crore

For refund applications claiming a tax amount of up to Rs 2 Crore:

• The processing will be conducted by the ETO-cum-Proper Officer after due diligence at the ward level.
• The DETC will randomly review records from various wards to ensure that the orders issued by the ETO-cum-Proper Officer are appropriate and legal.
• The DETC may scrutinize up to 5% of these cases quarterly, ensuring coverage from all wards.
• Should any deficiencies regarding propriety and legality arise, the DETC is required to recommend action under sections 73/74 of the HGST Act, 2017.

3. Responsibilities of the Tax Inspector

The Tax Inspector's role involves:

• Conducting thorough scrutiny of all GST refund applications to verify completeness and the appropriate documentation for establishing the refund entitlement.
• If complete, recommending an acknowledgment in GST RFD-02 format or issuing GST RFD-03 in other cases.
• Following acknowledgment issuance, the ETO-cum-Proper Officer will further process the application and may seek assistance from the Tax Inspector as needed.
• Conducting physical verification of the taxpayer under Rule 25 of the HGST Rules, 2017, if necessary.
• The ETO-cum-Proper Officer will ensure compliance under section 54(10) and section 54(11) of the Goods and Services Act, including checking for any outstanding arrears or pending issues against the applicant.

4. Processing Refund Applications on “Any Other” Grounds

Refund applications under the “Any Other” category must be processed only after obtaining prior approval from the jurisdictional Deputy Commissioner of State Tax.

5. Reporting Difficulties

Any challenges in adhering to these instructions should be promptly reported to the Department for resolution.

6. Approval of Instructions

These guidelines have been issued with the authorization of the Additional Chief Secretary (E&T), Government of Haryana.

Conclusion

The establishment of structured procedures for GST refund processing aims to enhance the efficiency and legality of refunds in Haryana. Adhering to these updated protocols will ensure a transparent and accountable system, benefiting both the taxpayers and the Department of Excise and Taxation.