Where a return shows that the amount of input tax paid by the taxable person has exceeded the output tax which the taxable person has charged to the customers, the difference will be repaid to the taxable person (s 19(5) of the GST Act).
Tax credits may be refunded via General Interbank Recurring Order (GIRO), cheque, bank draft or telegraphic transfer, where applicable. With effect from 8 September 2020, an additional mode of refund via PayNow is available for GST refunds.
On or about 29 Dec 2021, the regulations, Goods and Services Tax (Mode of Payment for Refunds) Regulations 2021, that prescribe the mode of payment for GST refunds have been released and came into effect on 3 January 2022.
From 3 Jan 2022, these modes of refunds are legislated under reg 2(1) of the Goods and Services Tax (Mode of Payment for Refunds) Regulations 2021.
The Comptroller of GST may make a GST refund to a taxable person by transferring the funds for the refund to the taxable person’s bank account through:
- telegraphic transfer
- the electronic direct debit mechanism known as General Interbank Recurring Order (GIRO)
- the electronic fund transfer service known as PayNow