Procedure Relating To Sanction, Post-Audit And Review Of Refund Claims: CBIC Issues Guidelines
[15 June 2022] According to section 107 of the Central Goods and Services Tax Act, 2017, the commissioner may review any decision or order, including an order of refund, with respect to its legality or propriety. The commissioner may direct any officer subordinate to him to file an appeal against the decision or order within 6 months of the date of communication of the decision or order. As per the Circular 17/17/2017-GST dated November 15, 2017, pre-audit of refund orders is not required to be carried out, but the post-audit of the refund orders may, however, continue on the basis of extant guidelines.
The CBIC has received reports of different practises being followed by the field formations regarding sanction, review, and post-audit of refund claims. In certain commissionerates, speaking orders are issued in respect of all refund claims, whereas in others, speaking orders are not issued if the refund is sanctioned in full. Similarly, in the case of review and post-audit, different practises are being followed by the field formations. The matter has been examined with the twin purpose of ensuring uniformity in procedure and enabling effective monitoring of sanction of refund claims in order to safeguard the interest of revenue.
The Board has issued the instructions/guidelines for sanction, post-audit and review of refunds.
“The proper officer shall follow the principle of natural justice before taking the final decision with regard to the refund claim. The principle of natural justice, inter alia, provides that a detailed speaking order needs to be issued, providing a basis for sanction or rejection of a refund. Therefore, while passing the refund sanction order in FORM GST RFD-06, the proper officer should also upload a detailed speaking order along with the refund sanction order in FORM GST RFD-06,” the CBIC said.