17.4 Refunds

A refund reverses all or part of an earlier permitted external transfer. It does not represent new commerce in the reverse direction and does not need to satisfy the transfer rule that would ordinarily apply in that direction. This creates four restricted refund paths:

• R → C reverses a taxable C → R retail payment, including a payment from a private C-account;
• B → R reverses an untaxed 𝜥-compatible R → B supply-chain payment;
• G → C reverses a taxable external C → G transfer, including a payment from a private C-account; and
• B → B reverses an untaxed 𝜥-compatible B → B supply-chain payment when the reverse transfer is not itself 𝜥-compatible.

Every refund must return value between the same two accounts in the reverse direction, identify the original non-refund transfer, and not cause cumulative refunds to exceed its unrefunded amount. Where the original transfer information has been purged for a private C-account payment, an anonymous refund credential must establish these facts without reconstructing the protected transaction history. A partial refund reverses or credits the corresponding proportion of any consumption tax collected on the original transfer. A refund of an untaxed transfer is untaxed and causes no tax adjustment. A refund cannot itself be used as the original transfer for another refund.

These rules permit the reversal of a B → B supply-chain payment even when the categories are not 𝜥-compatible in the reverse direction. The reference to the original permitted transfer, rather than reverse compatibility, establishes that it is a refund rather than a new supply-chain payment.

A non-citizen buying a retail product using money held in a G-account first makes an internal G → C transfer, then makes an external C → R transfer. Consumption tax is collected on the C → R transfer.

If the retail purchase is refunded, the money may follow the reverse path. The seller makes a linked R → C refund and the purchaser may then make a linked C → G reversal. The R → C refund reverses or credits the consumption tax paid on the original purchase, and the linked C → G reversal does not cause consumption tax to be collected again.

A linked reversal to the G-account must:

• reference the original G → C transfer and C → R commerce transaction;
• return money through the C-account used for the original commerce transaction and to the G-account used to fund it;
• not exceed the unrefunded portion of the original commerce transaction;
• reverse or credit tax proportionately for a partial refund; and
• not permit cumulative C → G reversals to exceed the amount returned by the linked R → C refunds.

The linked reversal is not a general permission for an untaxed C → G transfer. It restores G-account money after the corresponding retail transaction has been reversed.