Shreyansh Singh, an IIT Kanpur alumnus, has eight years of experience in the finance industry. He has spent 5 years at American Express developing mid to long-term strategies for multiple markets including US, Europe and India. Shreyansh currently leads Growth and Strategy initiatives at Pice.
Form GST RFD-05 is the payment advice issued by GST officers for sanctioned refunds.
It details the sanctioned refund, including provisional amounts, adjustments, and final payable amounts.
Refund amounts are electronically credited to taxpayers' validated bank accounts.
GSTN enhancements allow taxpayers real-time access, automated notifications, and bank validation via PFMS.
Taxpayers must update incorrect bank details promptly to avoid refund delays.
Form GST RFD-05, among the various GST refund forms, is the fifth official document and is commonly referred to as payment advice. The issuance of this application for refund is preceded by a provisional refund document, the RFD-04. The generation of GST RFD-04 compels a GST officer to examine the genuineness of the refund claim.
In this blog, let us understand what Form GST RFD-05 is, and we will also scrutinise each of its subsections.
What is Form GST RFD-05?
The responsible officer-in-charge of the government must issue form GST RFD-05 as payment advice for funds granted through sub-rule (2). The computerised refund will be deposited to the registered bank accounts of the applicant based on their registration details.
The officer generates form RFD-06 while also preparing payment advice using form RFD-05 based on whether the submitted documentation and form RFD-01 information meet the satisfaction level. The main difference between these two situations is that officer's approval leads to a refund of funds to the applicant's bank account whereas unsatisfied cases result in credits to the Consumer Welfare Fund.
Details of Form RFD-05
Form RFD-05 begins with a sanction order no. and resembles a letter that directly addresses the applicant. Its body features the application reference number or ARN, followed by the application issuance date and acknowledgement number.
Moreover, there is a table that offers necessary information about the refund sanctioned, the amount claimed and the bank account where the refund will be credited.
Altogether, 13 different points are addressed via this table:
Amount Claimed as Refund: This is plainly the initial amount that an applicant claims as a refund.
Refund Approved on a Provisional Basis (Order No. … Date): In the cases where any partial payments were made as a refund then the specifics for the same must be mentioned under this head.
Inadmissible Refund Amount (reason to be selected using dropdown): If the Council considers any amount to be inadmissible for a refund then the reason for the same is reflected here.
Allowed Balance Refund: It directly calculates the difference between values specified in points 1, 2, and 3.
Refund Adjusted for Outstanding Demand Under the Current or Earlier Law. Demand Order No. Date…: If The authority will deduct any outstanding demands from the applicant's refund and remit the remaining balance.
Net Amount of Sanctioned Refund: It is the final amount approved as per the Order.
Bank Account Number According to the Application: It is the account where the refund will be sent or any amount credited by the GST Council.
Name of the Bank: Here, you have to verify the bank’s name where the refund will be processed.
Bank Account Type: In this section, you see the type of bank account to which the authorities will send the refund amount.
Account Holder’s Name: As per the official records, the name of the bank account holder is updated in this segment.
Name and Address of the Concerned Bank Branch: Here, one can check the full address line of the bank in which the refund amount will be credited.
IFSC: IFSC code of the respective bank branch is also mentioned.
MICR: MICR code is also highlighted for the bank that will process the refund amount.
The Goods and Services Tax Network (GSTN) has introduced several enhancements to improve the refund process associated with Form GST RFD-05:
Front Office Access:
Taxpayers can now view the issued payment advice (RFD-05) directly through the GST portal's front office interface. This feature provides real-time updates on the refund status, enhancing transparency.
Automated Notifications:
Upon issuance of RFD-05, taxpayers receive automated communications via email and SMS, informing them about the progression of their refund application.
Bank Account Validation by PFMS:
The bank account details provided in the refund application undergo validation by the Public Financial Management System (PFMS) after the issuance of RFD-05. This step ensures that refunds are credited to legitimate and accurate bank accounts.
Updating Bank Account Details:
If the PFMS validation fails, taxpayers are required to update or correct their bank account information through a non-core amendment on the GST portal within the tax period. This measure prevents delays in refund disbursement due to incorrect bank details.
Status Tracking:
Taxpayers can monitor the status of their bank account validation and refund disbursement through the GST portal, providing clarity on any pending actions or issues.
These changes aim to make the refund process more efficient, reduce error count, and ensure that taxpayers receive their refunds in a timely manner.
Conclusion
Form GST RFD-05 serves as a critical instrument in the GST refund mechanism, authorizing the disbursement of sanctioned refunds to taxpayers. A thorough understanding of its components and the recent enhancements introduced by the GSTN can significantly aid taxpayers in navigating the refund process more effectively.
By staying informed about these procedures and promptly addressing any issues, such as bank account validation failures, taxpayers can ensure that their refund claims are processed smoothly and without unnecessary delays.
💡If you want to streamline your payment and make GST payments via credit or debit card, UPI consider using the PICE App. Explore the PICE App today and take your business to new heights.
FAQs
What is Form GST RFD-05 used for?
Form GST RFD-05 is a payment advice document issued by the GST officer, authorizing the disbursement of sanctioned GST refunds. It specifies the approved refund amount, bank details, and related adjustments. The issuance of RFD-05 follows validation and approval processes conducted by GST authorities. Ultimately, it ensures that taxpayers receive refunds directly into their registered bank accounts after proper verification.
How is Form GST RFD-05 different from Form RFD-06?
While Form GST RFD-05 serves as payment advice specifying the refund amount to be credited to the taxpayer’s bank account, Form RFD-06 is the refund sanction order confirming the approval or rejection of refund claims. If the refund is approved, RFD-05 facilitates direct bank transfers. If rejected or partially disallowed, the amount is transferred to the Consumer Welfare Fund.
What happens if my bank account validation fails after RFD-05 issuance?
If the Public Financial Management System (PFMS) validation of your bank account fails, you must promptly correct or update your bank account details through a non-core amendment on the GST portal. Failing to update these details may delay your refund payment. Ensuring accurate bank information helps prevent processing delays and allows swift refund transfers.
Can I track my GST refund status after Form RFD-05 is issued?
Yes, you can track the status of your GST refund after the issuance of RFD-05 through the GST portal. The portal provides real-time updates on the validation of your bank account details by PFMS and the progress of your refund disbursement. Additionally, automated email and SMS notifications help keep you informed throughout the refund process.
What details are included in Form GST RFD-05?
Form GST RFD-05 includes critical details such as the Application Reference Number (ARN), sanctioned refund amount, adjustments against any outstanding demands, bank account details for refund credit, and IFSC/MICR codes. It clearly outlines the provisional refund (if any), inadmissible refund amounts, and the net refund payable. These details ensure transparency and accuracy in the refund process.
Shreyansh Singh, an IIT Kanpur alumnus, has eight years of experience in the finance industry. He has spent 5 years at American Express developing mid to long-term strategies for multiple markets including US, Europe and India. Shreyansh currently leads Growth and Strategy initiatives at Pice.
0
Instant Transfer
Lowest Rates
Credit on all transaction