Certificate under Section 54 of the CGST Act

Independent Practitioner’s Certificate under the Central Goods and Services Tax Act, 2017 (in short “CGST Act”) and State Goods and Services Tax Act, 2017 / Union Territory Goods and Services Tax Act, 2017 (in short “SGST/UTGST Act”) in terms of Section 54 of the said Acts and Rule 89 of the Rules issued under such Acts.

1. This Certificate is issued in accordance with the terms of our agreement dated ……………..

2. M/s. …………………. (hereinafter referred to as the “Applicant’) is a registered person vide GSTIN ……………….. and is having its principal place of business at ……………………………………………... ………………………………………… in the State of ………………. The Applicant has the following additional places of business:

3. The Management of the Applicant has filed an application for refund u/s 54 of the CGST and SGST/UTGST Acts and provision of Rule 89(2)(m) of the CGST and SGST/UTGST Rules, 2017 requires that a certificate in Annexure 2 of Form GST RFD-01 be issued by a Chartered Accountant or a Cost Accountant to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed exceeds two lakh rupees.

4. The preparation and filing of refund application under the provisions of GST law is the responsibility of the Management of.............................. [Name of the Applicant] including the preparation and maintenance of all accounting and other relevant supporting records and documents. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of refund application and applying an appropriate basis of preparation; and making estimates that are reasonable in the circumstances.

The management is also responsible for ensuring that the Applicant complies with the requirements of CGST and SGST/UTGST Acts and CGST and SGST/UTGST Rules.

5. Management of the Applicant is responsible to ensure that books, records documents and information made available for purposes of verification are truthful and reliable, extracted from contemporaneous records for the purposes of establishing reliability of assertions made by them

6. Pursuant to the requirements of Section 54 of the CGST and SGST/UTGST Acts read with Rule 89 of the CGST and SGST/UTGST Rules, 2017, it is our responsibility to examine the books of accounts and other relevant documents/ records of the Applicant and to provide a reasonable assurance that the incidence of tax, interest or any other amount claimed as refund, has not been passed on to any other person, in a case where the amount of refund claimed exceeds two lakh rupees.

We conducted our examination in accordance with the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) issued by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India.

We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

7. Our responsibility while issuing the certificate is only limited to provide a reasonable assurance that the incidence of tax, interest or any other amount claimed as refund, in the refund application has not been passed on to any other person. The responsibility does not extend in any manner whatsoever in verifying any other particulars stated in the refund application including the eligibility to claim refund, output tax rate charged or admissibility of the Input Tax Credit.

8. We have examined the books of accounts and other relevant documents / records of the Applicant for the purpose of section 54 of the CGST Act and SGST/UTGST Acts and Rule 89(2)(m) of the CGST and SGST/UTGST Rules, 2017.

9. Based on our examination as above and the information and explanation given to us, in our opinion, in respect of the refund amounting to Rs. ………… as mentioned in Annexure-2 of Form GST RFD -01 for the tax period __________, with reference to ________, incidence of tax and interest, has not been passed on to any other person

10. The Certificate contained in Annexure 2 of Form GST RFD-01 shall be read together with this Certificate.

11. This certificate is addressed and provided to the ……..[Name of the Applicant] solely for the purpose of submission to (Name of the Authority) pursuant to the requirements of Section 54 of the CGST and SGST/UTGST Acts read with Rule 89(2)(m) of the CGST and SGST/UTGST Rules, 2017 and should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or duty of care for any other purpose or to any other person to whom this certificate is shown or into whose hands it may come without our prior consent in writing.

For XYZ and Co.
Chartered Accountants
Firm’s Registration Number

Signature
(Name of the Member Signing the Certificate)
(Designation)
Membership Number:______
UDIN: ______

Check points for the Chartered Accountants –

(ii) Copy of the refund claim for which the Certificate is sought, to be obtained. Check whether the refund claim has been made within the specified time limit. All amounts to be claimed as refund must have been carried in the balance sheet as a current asset and not expensed (or included in the capitalized value of any asset) of the Applicant or debited to any customer directly on any invoice. Provision made towards such refundable amounts due to uncertainty of sanction of refund is not fatal to the claim of refund or for issue of this certificate.

(iii) Ensure that the applicant is not barred from claiming refund under Section 54(3) of the CGST and SGST/UTGST Acts and document the basis on which refund claim is sought by the Applicant. Compare the GST rate of inputs and the GST rate on outputs.

(iv) Obtain a declaration from the suppliers to the effect that they have not claimed refund or drawback on the supplies made i.e. this proviso forming part of 54(3) of the CGST and SGST/UTGST Acts, 2017, to ensure that there is no double refund / revenue loss to Government.

(v) Obtain documentary evidence from the applicant for ensuring that there is no unjust enrichment of the refund amount claimed [Section 54 (4)(b) of the CGST and SGST/UTGST Acts, 2017]. Examine if uniform pricing methodology is applicable in the business of the Applicant such as sales based on standard list price. Where such methodology is applicable then two successive invoices, one involving a refundable amount and the other not involving any claim for refund are ‘unlikely’ to be the same price. If this is observed, then further substantive tests are required to establish that the ‘burden of this refundable amount’ has not been passed on. However, if negotiated price methodology is applicable in the business of the Applicant, suitable representation may be obtained to the effect that refundable amount has not been passed on

(vi) Ensure that the refund claimed is recorded as receivable in books and tallies with ledger balances. Also test check the tax invoices and flow of accounting entries recorded in books for such supplies and related taxes.

vii) Ensure compliance with provisions of Section 54(10) of the CGST and SGST/UTGST Acts, 2017 with respect to default in furnishing any returns, non-payment of tax, interest or penalty etc.

(viii) This certificate is required to be issued only if the aggregate value of the refund claim exceeds rupees two lakhs (Rule 89 of the CGST and SGST/UTGST Rules, 2017)

(ix) Care must be taken to disclose the basis on which the conclusion was reached regarding the incidence of tax not being passed on. Merely declaring that incidence of tax has not been passed on will not suffice.

(x) This certificate is to be issued in respect of a person who has made a claim of refund u/s 54 of the CGST and SGST/UTGST Acts, 2017

(xi) Ensure that the certificate issued is in accordance with the Guidance Note on Reports and Certificates for special purpose issued by the ICAI.