Decisions taken by the Council was for the government to lay down the rules for unregistered persons to file a refund application under GST. This decision was taken due to some transaction where an unregistered buyer had entered into a construction agreement or contract with a builder, but the said contract had been subsequently cancelled. Another situation could arise where long-term insurance policies are cancelled where the entire premium had been paid upfront.
Who is take refund as an unregistered person
-Unregistered person of construction services
In this case, unregistered persons have entered into an agreement with a builder for the supply of construction services for apartments/buildings, etc. The buyer has further paid the amount towards consideration for such services, fully or partially, along with the applicable taxes. However, the said contract or agreement has thereafter been cancelled due to reasons such as non-completion of the project or delay in construction activity, or any other reason.
Here, the period for issuance of a credit note as per Section 34 of the Central Goods and Service Tax (CGST) Act may have already expired by this time, i.e. earlier of 30th November of the following financial year in which the supply was made, or date of filing the annual return. Hence, while the supplier may refund an amount to the buyer in the case of cancelled contracts, this amount would be after deducting the GST portion as it would have already been paid to the government.
-Unregistered person of insurance policy
The second case, where unregistered buyers can file a refund application. where the premium for the entire period of a long-term insurance policy, along with the applicable GST, has been paid upfront, and the policy is subsequently required to be terminated prematurely due to any reason. Similar to the above situation, the time period for issuing credit notes may have already expired, and the insurance company may refund only the proportionate premium without the GST amount.
Enrollment Procedure on GST portal as unregistered person
To facilitate this enrollment process, GSTN has introduced a user-friendly functionality that allows unregistered persons to sign up. Here’s how unregistered suppliers can enroll on the GST portal:
- Visit the GST Portal: Go to https://www.gst.gov.in/ and click on the GST Portal link.
- Access User Services: Select the “User Services” Tab and choose “Generate User Id for Unregistered Applicant.”
- Confirmation: Click “Yes” on the warning window to proceed.
- Application: Check the “To apply as a supplier to e-commerce operators” box.
- Fill the Form: Complete the form that opens on your screen.
Enrollment Number: Once your PAN is successfully validated, the portal will generate your enrollment number.
Documents required for filing of refund
- Your original PAN card.
- Aadhar card.
- Bank account details have the same name as the Aadhar and PAN cards.
- Proof of invoice.
- Proof of payment at the time of agreement.
- Proof of the total amount you received after the agreement was terminated.
- Copy of original agreement letter with the supplier or builder.
- Proof of document by the supplier or builder states that the government paid the tax and was not adjusted in the credit that you (unregistered buyer) received.
- A certificate or document as proof by the builder or supplier itself that they have yet to take the refund of amount of GST or will not take it in the future.
How to file a Refund application
- Open the official GST portal website. Click on the Refund for the unregistered person category. Under these categories, a form which is called GST RFD-01 is given.
- PDF of statement is also required to be uploaded in this application.
- An application should be uploaded, which was provided by the supplier.
