The Goods and Service Tax Network (“GSTN”) has issued a process concept document for single authority refund disbursement. The following are the gist of the procedure which are discussed as hereunder:-
Processing of Refunds at the level of GST System and PFMS:-
1. The taxpayer files refund application on the portal in form RFD-01.
2. On the filing of RFD-01 application, the common portal shall process the data and generate the Taxpayers’ (Assessee) Master file. This file contains the details of the taxpayers’ bank account.
3. The Assessee Master is then shared with the Public Financial Management System (PFMS) of Controller General of Accounts (CGA), Ministry of Finance for validation of bank account details.
4. PFMS maintains its own Taxpayers’ (Assessee) Master with Unique Assessee Code (Combination of GSTIN + Bank Account Number) in their Taxpayer (Assessee), Master.
5. PFMS validates the bank account details of the taxpayer claiming refund i.e. whether the bank account is an existing account.
6. Disbursement of the amount claimed in each refund application shall happen in respective bank account subject to successful validation by PFMS.
7. GST System will not allow the change in a bank account in respect of the refund application, selected at the time of filing of refund application unless it is rejected by PFMS during the validation process.
8. In case, error in validation of bank account details occurs at PFMS level, the refund processing officer shall not be able to issue a payment advice in form RFD-05 to the taxpayer. The error at PFMS level shall be transmitted to GST System electronically and the GST System shall make the error message available to the taxpayers and the refund officers at their dashboards. In such cases the taxpayer has the following two options:
(a) rectify the existing bank details through Form GST REG-14 amendment or add a new bank account through Form GST REG- 14 by way of non-core amendment.
(b) update by selecting the rectified/ newly added or any other bank account from the bank accounts available in the registration details in the refund functionality of the GST Portal. This will update the bank details in the refund application.
Processing of Refunds at the level of Central DDO:-
Once the records (RFD-05) in R1 form (after bank account validation by PFMS) are received by the DDO, the Bill will be prepared by DDO. The designated DDO will prepare the electronic bill in the PFMS system putting his digital signature before forwarding the same to the e-PAO (Refund) of Pr. CCA (CBIC).
Processing at the level of e-PAO (Refunds):-
The e-PAO (Refund) of Pr. CCA (CBIC) will process the Bills for refund payment and its disbursement by issuing Payment authorization to the accredited bank (SBI) of CBIC for putting his digital signature. The Voucher will be sent to SBI by PFMS for payment.
Processing by Accredited Bank of CBIC:-
SBI which is integrated with PFMS will honour the payment authorization made by e-PAO GST (Refund) and will make payments in the Taxpayers/Applicant Bank account as per the following schedule:
1. If the payment authorization is received by SBI from e-PAO GST Refund during the working hours of the bank, the same will be further pushed to the beneficiary’s bank during the same day.
2. If SBI receives the payment/authorization after the close of the working hours during the day, the same will be processed for payment on the next working day. In no case, it will be postponed without any valid reasons which will be communicated to the e-PAO GST (Refund) immediately.
The Complete Process Concept Document can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2019/10/PFMS.pdf