Sales Tax Refund is most important in Tax Law, so if you are a business Registered for Sales Tax and you overpaid sales or use tax, paid sales or use tax in error, or collected, reported, and remitted sales tax but then repaid it to your customers.
If the input tax paid by a registered person on taxable purchases made during a tax period exceeds the output tax on account of zero rated local supplies or export made during that tax period, the excess amount of input tax shall be refunded to the registered person not later than 45-days of filing of refund claim in such manner and subject to such conditions as the board may, by a notification in the official Gazette specify.
Persons That Can Claim Refund
Refund of sales tax paid as input tax can be claimed by the following registered persons in the respective situations:
Registered manufacturer- cum-exporters and commercial exporters who zero rate all or part of their supplies under section 4 of the Act.
Registered persons who acquire tax paid inputs for use thereof in the manufacture of goods chargeable to sales tax at the rate of zero percent under the Act or a notification issued there-under.
Registered persons claiming refund of the excess amount of input tax which could not be consumed within three months.
Registered persons who acquire tax paid inputs used in the export of goods , local supply of which is exempt under the Act or any notification issued there under.
Refund can also be claimed if an amount of sales tax is paid inadvertently or by mistake.
Refund may also be claimed if an amount is paid on demand of the department, but subsequently the demand is set aside by any competent authority, Tribunal or Court.