India: Clarity On The Registration, Returns, Refund And Payment Processes In The GST Regime

Last Updated: 7 January 2016
Article by SKP  

The Empowered Committee of State Finance Ministers had formed a Joint Committee to look into the reports on the business processes of registration (including return), refunds and payment for Goods and Services Tax (GST). Later, the Joint Committee constituted three sub-committees to provide recommendations for these fields. These committees submitted their reports as follows:

Joint Committee on

Constituted on

Date of Report

Business processes for GST - Registration process

7 April 2014

July 2015

Business processes for GST - Refund processes

14 November 2014

August 2015

Business processes for GST - Payment process

3 February 2015

April 2015

On 6 October 2015, the aforesaid reports were made available in the public domain1 to engage with stakeholders and invite comments. These three reports are among the many positive steps taken towards the GST regime. Earlier in a press release, it was indicated that the GST model laws are likely to be finalised by the end of September and would then be available for public consultation.

Key takeaways from the recommendations

  • Threshold limits for registration and reverse charge will exist under the GST regime
  • Threshold of gross annual turnover including exports and exempted supplies are to be calculated on an all-India basis
  • For each state, the taxable person must take a separate registration, even though the taxable person may be supplying goods or services or both from more than one state as a single legal entity. Multiple registrations in a state for business verticals would be permitted. However, for the purpose of recovery of dues, all business verticals, though separately registered, will be considered to be a single legal entity.
  • Prior to obtaining a Goods and Services Tax Identification Number (GSTIN), it will be necessary to obtain a Permanent Account Number (PAN)
  • The GSTIN would be a PAN-based, 15-digit, alpha-numeric registration number
  • Specific provisions to be incorporated for the migration of existing registrants to GST regime
  • Voluntary, casual and non-resident dealer registration options have been borrowed from the present State Value Added Tax system
  • Taxpayers would have the option of a compounding scheme where they can opt to pay tax at a specified percentage of the turnover, without entering the credit chain. Such taxpayers will not be allowed to collect tax from their customers or claim any input tax credit.
  • The concept of Input Service Distributor (ISD) being followed presently under the service tax legislation, may continue under the GST regime
  • Facilitation centres could be set-up for the digitisation/uploading of the forms and documents pertaining to registration under the GST regime
  • Taxpayers would be required to make payment of Central GST (CGST), State GST (SGST), Integrated GST (IGST) and additional tax through internet banking. Separate accounting codes would exist for the aforesaid taxes.
  • For making an e-payment of GST, taxpayers would be required to access the Goods and Services Tax Network (GSTN) for generating the challan
  • The challan will have a 14-digit unique Common Portal Identification Number (CPIN)
  • Under ten specified situations, such as exports, excess payment made by mistake, refund of pre-deposit, refund to international tourists, etc., the taxpayers can claim a refund of GST paid
  • Exports would be treated as inter-state supplies and therefore IGST would be required to be paid by the taxpayer in cases where GST is paid at the time of export. Rebate (i.e. refund of IGST) would have to be paid by the Centre.
  • In case of refund of GST paid on inputs (including input services) used for exported goods, the refund of CGST, SGST, or IGST may arise and must be paid by the respective tax administration
  • Option to procure duty-free inputs for exported goods may not be available in the GST regime
  • Deemed exports could be treated at par with exports
  • Up to 90% of the refund claimed by the taxpayer may be sanctioned automatically and the balance amount of the refund may be granted after completion of verification
  • Using input tax credit of GST paid on inputs, input services and capital goods should not be allowed against Customs Export Duty
  • Refund of tax payment on purchases made by Embassies or UN bodies, supplies to Canteen Stores Department (CSD) Canteens, para-military forces, etc. would be available
  • In the case of joint reverse charge mechanism, refunds could be allowed
  • A period of one year from the relevant date may be allowed for filing of refund application - in the case of export of goods, one year from the date on which the proper officer under the Customs Act issues a Let Export Order (LEO); in the case of export of services, one year from the date of invoice or Bank Realisation Certificate (whichever is later).
  • Pre-audit of the refunds sanctioned may be kept at INR 10 million or as may be decided by the respective tax jurisdiction
  • The rate of interest for refund may be around 6% while that for default in payment of interest would be around 18%.

The way forward

It is pertinent to note that five committees have been constituted by the Empowered Committee of State Finance Ministers to deal with the various aspects of work related to the introduction of GST. In the days to come, it is expected that reports of other committees could also be available in the public domain as follows:

Committee formed

Report status

Whether available in public domain for comments

The Committee to examine Business Processes under GST Regime



The Committee on the Problem of Dual Control, Threshold and Exemptions in GST Regime



The Committee on Revenue Neutral Rates for State GST &
Central GST and Place of Supply Rules



The Committee on IGST & GST on Imports



The Committee to draft model GST Law



The government's heightened activity clearly indicates their determination to introduce GST in India. Also, their spearheaded approach of placing the reports in the public domain for comments prior to the constitutional amendment is in line with the government's aim of 'minimum government, maximum governance'.

With Prime Minister Narendra Modi's recent reassurance of rolling out GST in 2016, its introduction appears to be more certain now than before.

In view of the aforesaid developments and the preparedness of government machinery to implement GST from next year, it is time for business houses to represent their issues to the government and gear up for the new regime. The critical areas for any business in trading, manufacturing or service operations for implementing GST in their organisation on time are as follows:

  • Finance and accounting
  • Procurement and marketing
  • Supply chain
  • Tax
  • Information technology
  • Legal

With the registration, payment of taxes and refund procedures being brought before the public and industry in the days to come, we can hope to see clarifications pertaining to the rate of tax, list of exemptions and the credit eligibility mechanism under the new regime.


1. Stakeholder Consultation on GST, Department of Revenue, Ministry of Finance,

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
14 Dec 2017, Webinar, Mumbai, India

We invite you to a webinar to discuss the broad proposals under the US tax reforms and its impact on Indian entities that have business operations in the US, as well as US entities that have operations in India. To bring out the on-ground US tax perspective, the panel for the webinar will host Indian and US tax professional.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions