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TDS & TCS Refunds under GST (2025): What Changed and How to Claim — Step-by-Step

GST TDS & TCS Refunds (2025): Latest Updates, Eligibility & Step-by-Step Filing Guide

Updated: November 2025  |  Covers: Refund of TDS (Sec. 51) / TCS (Sec. 52) credited to Electronic Cash Ledger, latest portal advisories, documentation, mistakes to avoid, and FAQs.

What’s New (2025) – Quick Highlights

  • No time limit applies to refund of excess balance in the Electronic Cash Ledger (ECL), which includes TDS/TCS credits received by the deductee/collectee. (Clarified by CBIC; see references.)
  • Portal stability & negative-balance handling: GSTN rolled out back-end updates in Aug 2025 to reduce “negative minor head” issues that sometimes blocked refunds or offsets. If you faced this earlier, retry after reconciling minor heads (Tax/Interest/Fee/Penalty). (See references.)
  • Smoother cash-ledger refunds: The category “Refund of Excess Balance in Electronic Cash Ledger” remains the fastest route for claiming TDS/TCS amounts sitting in the ECL after you’ve discharged liabilities.
Key idea: TDS/TCS credited to you (the supplier/collectee) first sits in your Electronic Cash Ledger. If it’s not needed to pay tax (or was credited under a different minor head), you can claim it back as a cash-ledger refund.

Who Can Claim the Refund?

Deductee (for TDS) or Person from whom TCS was collected (for e-commerce supplies) can claim, when:

  • TDS/TCS amount is credited in ECL and exceeds your actual net liability for the period(s), or
  • TDS/TCS got credited under the wrong minor head (e.g., Interest/Fee instead of Tax) and you cannot utilize it; or
  • You have a permanent surplus (e.g., deductor/collector reported excess).

Pre-Filing Checklist (5-Minute Self-Audit)

  1. Go to Services → Ledgers → Electronic Cash Ledger and download ledger for the relevant period. Check the minor head and major head (CGST/SGST/IGST/Cess).
  2. Open Services → User Services → View TDS/TCS Credit Received. Match each credit with the TDS certificate (GSTR-7A) / TCS statement (from e-commerce operator).
  3. Reconcile liabilities already paid via GSTR-3B vs. ECL balance. If a simple head transfer solves it, use PMT-09 first. If not, proceed to refund.
  4. Keep soft copies ready: reconciliation working (Excel/PDF), bank statement (optional but helpful), and TDS certificate (GSTR-7A) / TCS details.
  5. Confirm the correct bank account is validated in your GST profile (My Profile → Bank Accounts).

Step-by-Step: How to File TDS/TCS Refund (Cash Ledger) on GST Portal

Path on Portal

Services → Refunds → Application for Refund → Select ‘Refund of Excess Balance in Electronic Cash Ledger’

Detailed Steps

  1. Open Refund Application: Choose the relevant Financial Year and Period. Click CREATE.
  2. System auto-pulls your cash balance. Enter the exact amount you want to claim under each major/minor head. Tip: Claim only what you genuinely cannot utilize in the next return cycle.
  3. Upload supporting documents (usually one PDF up to permitted size is enough):
    • Ledger extract (ECL) highlighting TDS/TCS credits
    • Reconciliation working showing why it’s surplus
    • Copy of TDS certificate (GSTR-7A) or TCS details from operator portal
    Unjust enrichment declaration is not required for cash-ledger refunds; certification by CA/CMA is also not required.
  4. Save → Preview → Submit with DSC/EVC.
  5. ARN generated. Track at Services → Refunds → Track Application Status.
  6. Post-Filing: If the officer raises a query (RFD-03), respond online within the given time with clarifications/extra documents.
Processing timeline: Cash-ledger refunds are among the quickest. Many are sanctioned without personal hearing if documents are clear.

If TDS/TCS Is in the Wrong Head (e.g., IGST vs CGST/SGST, or Fee vs Tax)

Try a PMT-09 transfer first (Services → Ledgers → Electronic Cash Ledger → File PMT-09). If transfer is not permitted (e.g., across minor heads not allowed for your case) or it still leaves surplus, file the refund as above and attach a brief one-page note explaining why PMT-09 couldn’t solve it.

Supporting Documents – What to Upload

  • Electronic Cash Ledger (PDF export for the period showing TDS/TCS entries)
  • Reconciliation sheet (credits vs. liabilities, and statement that the balance is surplus)
  • GSTR-7A TDS certificate (for TDS) / TCS credit details (for e-commerce)
  • Bank proof (optional; attach if asked)

Common Mistakes to Avoid

  • Claiming refund while you still have outstanding returns/liabilities. Clear them first to avoid queries.
  • Not matching credits in “TDS/TCS Credit Received” with the cash ledger.
  • Claiming under the wrong category (use Excess Balance in Electronic Cash Ledger, not “Excess payment of tax”).
  • Ignoring minor heads (Tax/Interest/Fee/Penalty). Refund is head-wise—enter amounts carefully.
  • Missing bank validation or using an inactive bank account in profile.

Practical Examples

Example 1 – Surplus TDS after Return Filing

Your buyer deducted ₹50,000 TDS and it got credited to ECL. Your net liability for the period was only ₹30,000 (and fully paid). The remaining ₹20,000 is unutilized. Claim ₹20,000 as cash-ledger refund split correctly by major/minor heads.

Example 2 – TCS Credited but No Tax Payable

You sell via an e-commerce operator. The operator collected TCS and credited it to your ECL, but your current returns show no net payable (because of ITC utilization or nil turnover in the period). Claim the TCS amount as refund with reconciliation and operator statement extract.

Example 3 – Wrong Minor Head (Fee vs Tax)

The deductor’s filing led to TDS reflecting under Fee instead of Tax minor head. If PMT-09 can’t shift it to Tax, explain in a one-pager and claim refund of that surplus under the cash-ledger category.

FAQs

Q1. Is there a 2-year time limit for TDS/TCS refund from cash ledger?
Ans. No. Refund of excess balance in ECL (which includes TDS/TCS credits) can be claimed any time. (See references.)

Q2. Do I need a CA certificate?
Ans. No, for cash-ledger refunds the unjust enrichment test/CA certificate is not required.

Q3. Can I adjust TDS/TCS against future liabilities instead of claiming refund?
Ans. Yes. If you expect near-term liability, you may keep it in ECL and utilize via GSTR-3B. Claim a refund only for true surplus.

Q4. What if my refund gets stuck because of a “negative minor head” message?
Ans. Reconcile your minor heads and try again. GSTN deployed back-end fixes in 2025 to reduce such issues; if it persists, raise a ticket and attach your ECL + screenshots.

Compliance Workflow You Can Follow (Team SOP)

  1. Weekly: Download ECL & TDS/TCS Credit Received statement; reconcile and tag entries.
  2. Before GSTR-3B: Decide utilize vs refund. If refund, prepare a one-page note + ledger PDF.
  3. After 3B filing: File RFD-01 (Cash-ledger refund) with documents. Track ARN.
  4. On query: Reply to RFD-03 within timeline; attach any extra working demanded.

References

  • GSTN Advisory (Aug 2025): Improvements in handling negative balances/minor heads in returns & ledgers. (Portal advisory) :contentReference[oaicite:0]{index=0}
  • CBIC Clarification: Refund of excess balance in Electronic Cash Ledger can be filed anytime; unjust-enrichment not applicable. (Circular clarification summarized) :contentReference[oaicite:1]{index=1}
  • Consolidated Refund Guidelines (operational aspects & documents). (Circular 125/44/2019 summary) :contentReference[oaicite:2]{index=2}
  • Portal Help: View TDS/TCS credit received & refund filing flows (help pages). :contentReference[oaicite:3]{index=3}

Downloadables

  • One-Page Checklist (Team Use): Identify surplus → Reconcile minor heads → PMT-09 (if possible) → RFD-01 (Cash-ledger) → Track ARN → Reply to queries.

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