Form GST RFD-06: The Final Verdict on Your GST Refund Application

After a taxpayer files a refund application in Form GST RFD-01 and the tax authorities complete their verification and processing, the final decision on the refund claim is formally communicated. This crucial communication, which signifies the culmination of the refund process (at the initial officer level), is made through Form GST RFD-06. This form is known as the Refund Sanction/Rejection Order.  

This article provides a detailed explanation of what Form GST RFD-06 is, when it is issued, its contents, its significance, and what it means for the taxpayer’s GST refund claim.

What is Form GST RFD-06?

Form GST RFD-06 is the official Order Sanctioning, Rejecting or Partly Sanctioning the Refund Claim. It is the final document issued by the jurisdictional GST tax officer that declares the definitive outcome of the refund application filed in Form GST RFD-01.  

Purpose: The primary purpose of Form GST RFD-06 is to convey the final decision of the tax authorities on the taxpayer’s refund claim, specifying the exact amount of refund sanctioned (if any), the amount rejected (if any), and the reasons for such sanction or rejection.

When is Form GST RFD-06 Issued?

Form GST RFD-06 is issued by the proper officer within the statutory timeline for processing refund claims. The general timeline stipulated in the GST law is sixty days from the date of receipt of the complete refund application (i.e., typically 60 days from the date of generation of Form GST RFD-02).

This order is issued after the tax officer has completed their detailed scrutiny of the refund application, supporting documents, and statements, and has concluded their verification process. This could be after issuing a Provisional Refund Order (RFD-04), after dealing with any notices or replies (RFD-08/RFD-09), or in cases where no provisional refund was applicable or no issues were found during the initial 15-day scrutiny.

Who Issues Form GST RFD-06?

Form GST RFD-06 is issued by the concerned jurisdictional GST tax officer responsible for processing the refund application.  

What Information Does Form GST RFD-06 Contain?

Form GST RFD-06 is a detailed order that provides a complete picture of the tax officer’s decision. It typically includes:  

• ARN of the original refund application (Form GST RFD-01): The unique reference number of the application that is being finalized.
• Date of Filing of RFD-01: The date the original application was submitted.
• Details of the Taxpayer: GSTIN, Name, etc.
• Tax Period and Refund Type: The period and reason for which the refund was claimed.
• Amount of Refund Claimed: The total amount originally applied for in Form RFD-01.
• Amount Sanctioned: The final amount of refund that has been approved for disbursement, broken down by tax heads (CGST, SGST, IGST, Cess) and minor heads.
• Amount Rejected: The amount of refund claimed that has been disallowed, also broken down by tax heads and minor heads.
• Reasons for Sanction/Rejection: Crucially, the order provides detailed reasons for the sanction or rejection of the refund amount, referencing specific provisions of the GST Act or Rules, or citing factual discrepancies found during verification.
• Reference to Provisional Refund (if any): If a provisional refund was granted in Form RFD-04, RFD-06 will refer to the amount already paid provisionally and indicate the balance amount being sanctioned or rejected.
• Details of Adjustment: If any part of the sanctioned refund is adjusted against any outstanding demand or liability of the taxpayer, the details of such adjustment are also mentioned.

What is the Significance of Form GST RFD-06?

Form GST RFD-06 is the most significant document in the initial refund process because:

• Final Decision: It represents the final determination by the tax authorities regarding the eligibility and amount of the refund claim.
• Basis for Payment: If the refund is sanctioned (wholly or partially), this order forms the basis for issuing the payment advice (Form GST RFD-05) and disbursing the amount.
• Reason for Rejection: If the refund is rejected or partially rejected, the order clearly outlines the reasons, which is essential for the taxpayer to understand the decision or consider further action.
• Culmination of Processing: It signifies the completion of the tax officer’s processing of the refund application under that specific ARN.

What Happens After Form GST RFD-06 is Issued?

The actions following the issuance of RFD-06 depend on the outcome:

• If Refund is Sanctioned (Wholly or Partially):

  • The tax officer will issue a Payment Advice in Form GST RFD-05 authorizing the crediting of the sanctioned amount to the taxpayer’s bank account.
  • The sanctioned amount will be electronically credited to the registered bank account.
  • If ITC was claimed as refund and a portion is rejected, an order in Form GST PMT-03 is issued to re-credit the rejected ITC amount to the electronic credit ledger.  

• If Refund is Rejected (Wholly):

  • No Form RFD-05 (Payment Advice) will be issued.
  • If ITC was claimed as refund and is rejected, an order in Form GST PMT-03 is issued to re-credit the rejected ITC amount to the electronic credit ledger.  
  • The taxpayer can review the rejection reasons in RFD-06 to understand the decision.

Relation to Other Refund Forms

Form GST RFD-06 is situated towards the end of the standard refund workflow:

• It is issued by the tax officer after the filing of Form GST RFD-01 and generation of RFD-02, potentially after RFD-03 (Deficiency Memo, leading to a fresh RFD-01) or RFD-04 (Provisional Order) and any related notices/replies (RFD-08/RFD-09).
• It is issued before Form GST RFD-05 (Payment Advice) and Form GST PMT-03 (Order for re-credit of Electronic Credit Ledger), which are consequences of the decision in RFD-06.

Taxpayer’s Recourse if Disagrees with RFD-06

If a taxpayer is not satisfied with the decision contained in Form GST RFD-06 (e.g., if their refund claim is fully or partially rejected, or if the sanctioned amount is less than expected due to reasons they disagree with), they have the right to file an appeal against this order with the appropriate Appellate Authority as per the provisions of the GST Act.

Conclusion

Form GST RFD-06, the Refund Sanction/Rejection Order, is the decisive document in the GST refund processing journey. It provides the taxpayer with the final determination of their refund claim by the tax authorities, detailing the sanctioned and rejected amounts and the reasons behind the decision. Understanding the contents and implications of RFD-06 is vital for taxpayers to know the outcome of their application, manage their finances accordingly, and decide on any further course of action, such as filing an appeal, if necessary.