Form GST RFD-05: The Final Step Towards Receiving Your GST Refund

In the sequence of forms governing the Goods and Services Tax (GST) refund process, Form GST RFD-05 plays a crucial role as the document that authorizes the actual payment of the sanctioned refund amount to the taxpayer’s bank account. While forms like RFD-04 and RFD-06 deal with the sanctioning of the refund (provisional or final), Form GST RFD-05 is the instruction that triggers the financial transaction.

This article explains the purpose of Form GST RFD-05, when it is issued, its key contents, and its significance in completing the GST refund cycle.

What is Form GST RFD-05?

Form GST RFD-05 is the Payment Advice issued by the jurisdictional GST tax officer. It is a formal instruction or authorization to the relevant payment authority (like the Public Financial Management System – PFMS) to disburse the refund amount that has been sanctioned to the taxpayer.

Purpose: The primary purpose of Form GST RFD-05 is to facilitate the electronic transfer of the sanctioned refund amount from the government’s account to the taxpayer’s designated bank account.

When is Form GST RFD-05 Issued?

Form GST RFD-05 is issued by the proper officer after a refund amount has been sanctioned. This can happen in two scenarios:

1. After Provisional Sanction: In cases eligible for provisional refund (primarily zero-rated supplies), RFD-05 is issued after the Provisional Refund Order in Form GST RFD-04 has been issued, authorizing the payment of the provisional amount (up to 90%).
2. After Final Sanction: In all cases, including those where a provisional refund was granted, RFD-05 is issued after the Final Refund Order in Form GST RFD-06 has been issued, sanctioning the final amount of the refund (which may be the balance 10% or a different adjusted amount).

Essentially, RFD-05 is issued whenever an amount is ready to be paid out to the taxpayer following a sanction order (RFD-04 or RFD-06).

Who Issues Form GST RFD-05?

Form GST RFD-05 is issued by the concerned jurisdictional GST tax officer who processed and sanctioned the refund claim.

What Information Does Form GST RFD-05 Contain?

Form GST RFD-05 provides all the necessary details for the payment system to process the refund disbursement. It typically includes:

• ARN of the original refund application (Form GST RFD-01): The reference number of the refund claim.
• Reference to the Sanction Order: Details of the Provisional Order (RFD-04) or Final Order (RFD-06) based on which the payment is being authorized.
• Sanctioned Amount for Payment: The specific amount of refund being disbursed with this payment advice.
• Breakdown by Tax Heads: The amount is shown broken down by major tax heads (CGST, SGST, IGST, Cess) and minor heads (Tax, Interest, Penalty, Fee, Others).
• Taxpayer’s Bank Details: The bank account number, bank name, branch address, IFSC code, and MICR code where the refund amount is to be credited. These details are picked up from the bank account information provided/validated by the taxpayer on the GST portal.

What is the Significance of Form GST RFD-05?

The significance of Form GST RFD-05 lies in the fact that it is the direct instruction that leads to the actual transfer of funds:

• Trigger for Disbursement: It is the formal authorization that initiates the process of crediting the sanctioned refund amount to the taxpayer’s bank account.
• Link to Payment System: It acts as a link between the tax department’s refund processing system and the government’s payment infrastructure (like PFMS).
• Confirmation of Payment Processing: While the actual credit to the bank account might take a short time after RFD-05 is issued (depending on bank processing times), the issuance of this form confirms that the payment process has been initiated by the tax authorities.

Relation to Other Refund Forms

Form GST RFD-05 fits into the refund workflow as the stage just preceding the actual bank credit:

• It is issued by the tax officer after a refund has been sanctioned via Form GST RFD-04 (Provisional Order) or Form GST RFD-06 (Final Order).
• It precedes the actual receipt of the refund amount in the taxpayer’s bank account.
• It will not be issued if the refund application was rejected (via RFD-06) or if a Deficiency Memo (RFD-03) was issued, as no amount is sanctioned in those cases.

Is Form GST RFD-05 the Final Decision on the Refund Amount?

No, Form GST RFD-05 is not the order that decides the final amount of refund. The final amount sanctioned is determined and communicated in the Final Refund Order, Form GST RFD-06. Form RFD-05 is purely the payment instruction based on the amount sanctioned in either RFD-04 (provisional) or RFD-06 (final).

Conclusion

Form GST RFD-05, the Payment Advice, serves as the crucial final document issued by the tax authorities that authorizes the disbursement of the sanctioned GST refund amount. While forms like RFD-04 and RFD-06 confirm the approval of the refund, it is RFD-05 that instructs the payment system to credit the funds to the taxpayer’s bank account. Understanding the role of RFD-05 helps taxpayers recognize that once this form is issued, the actual receipt of the refund amount in their bank account is imminent.