Template Description

This certificate under the SGST and CGST Acts, 2017, specifically pertains to Section 54, which deals with the refund of tax in certain cases, such as accumulated Input Tax Credit (ITC) due to the Inverted Tax Structure. This template is a 2-page MS Word document designed for businesses and professionals who are filing refund claims under Section 54. The intended users are chartered accountants, tax professionals, and businesses filing for tax refunds.

Understanding the Certificate under Section 54

Terminologies:

• Inverted Tax Structure: A situation where the rate of tax on inputs is higher than the rate of tax on output supplies, leading to unutilized ITC.
• Section 54: This section provides the legal framework for claiming refunds under specific scenarios, such as export of goods, tax paid on zero-rated supplies, or refunds due to the inverted tax structure.

Key Considerations:

• The examination of accounts must be detailed, ensuring that no double claim is made, and the refund is accurately calculated.
• The certificate must be compliant with the relevant sections of the CGST and SGST Acts, along with the associated rules, particularly Rule 89(2) of the CGST/SGST Rules, 2017.
• The applicant's records must be verified to avoid any discrepancies in the refund claim, which could result in legal or financial penalties.

Procedure for Issuing the Certificate:

• Examine Books of Accounts: The chartered accountant or authorized tax professional must thoroughly review the applicant's books of accounts and all relevant financial documents to ensure the refund amount is correct.

• Verification of Tax Incidence: It must be verified and certified that the tax incidence or interest claimed as a refund has not been passed on to any other party, ensuring compliance with anti-profiteering provisions.

• Preparation of Certificate: The certificate must include the applicant's name, GST registration number, and principal place of business, along with details of the refund application.

• Certification: The chartered accountant must sign the certificate, including their membership number, firm registration number (FRN), and Unique Document Identification Number (UDIN), which adds credibility and authenticity.

• Refund Scenarios: The certificate focuses primarily on refunds related to ITC accumulated due to the inverted tax structure, where inputs are taxed at a higher rate than outputs.

Conclusion

This certificate under Section 54 of the SGST/CGST Act is crucial for businesses and professionals seeking refunds due to an inverted tax structure or similar scenarios. Proper certification ensures compliance with tax regulations, prevents profiteering, and facilitates the smooth processing of refunds. Chartered accountants and tax professionals play a vital role in verifying records and providing assurance that the tax burden has not been shifted to other parties.