QUESTION
If registered person apply for cancellation of registration due to no more liable for registration under section 22 and have a balance in electronic Cash Ledger. Whether he will apply for refund first or for cancellation of registration? What is the procedure of refund of Electronic Cash Balance?
ANSWER
Facts of the case: If registered person apply for cancellation of registration due to no more liable for registration under section 22 and have a balance in electronic Cash Ledger. Whether he will apply for refund first or applies for cancellation of registration? What is the procedure of refund of Electronic Cash Balance?
Law Applicable: SECTION 54 OF CGST ACT
(1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed:
Provided that
a registered person, claiming refund of any balance in the electronic cash
ledger in accordance with the provisions of sub-section (6) of section 49, may
claim such refund in the return furnished under section 39 in such manner as may
be prescribed.
RFD-01
Instructions-
2. Refund of excess amount available in electronic cash ledger can also be claimed through return or by filing application.
Interpretation: As per proviso to section 54(1) refund of any balance in the electronic cash ledger may be claimed in the return furnished under section 39 in such manner as may be prescribed.
However return furnished under section 39 i.e. GSTR-3 is not active on portal therefore as per instruction (2) of FORM RFD-01 i.e. Refund of excess amount available in electronic cash ledger can also be claimed through filing of RFD-01 online by following below mentioned steps:
Login to GST portal then Navigate to Services > Refunds > Application for Refund option.
Column 1 of Form RFD-01 requires filling of registration number, so first apply for refund and send reminder on regular basis. Then file for cancellation of registration.
Conclusion: First apply for refund and then file for cancellation of registration. (Reply dt. 02/04/2021)