GST Refund Services in India

The main categories of GST refund

• Export of goods or services without payment of tax — under a Letter of Undertaking, the unutilised input tax credit attributable to the export is refunded.
• Export with payment of IGST — the IGST paid on the export is refunded, often processed through the shipping bill itself for goods.
• Inverted duty structure — where tax on inputs is higher than tax on the output supply, leading to accumulated, otherwise unusable input tax credit.
• Excess balance in the electronic cash ledger — money deposited but not needed to discharge liability can be claimed back.
• Excess payment of tax — including tax paid under the wrong head (say, IGST instead of CGST/SGST) under Section 77.
• Deemed exports and supplies to SEZ units — specific categories treated as exports for refund purposes even though the goods don't physically leave India.
• Refund following a favourable appellate order — where an earlier demand is set aside or reduced on appeal.

Time limits by refund type

This two-year limit is treated strictly — courts have consistently upheld it, and there is no statutory provision to condone a claim filed even a day late. Identifying the correct relevant date for your specific claim, and not leaving the application until close to the deadline, matters more here than in most other GST filings.

Documents typically required

• GSTR-1 and GSTR-3B for the relevant period, and GSTR-2B supporting the input tax credit claimed.
• For export refunds: shipping bills, bank realisation certificates or foreign inward remittance certificates evidencing receipt of export proceeds.
• For inverted duty claims: a statement of inward and outward supplies for the period, computed under Rule 89(5).
• A statement of the electronic cash and credit ledgers for the relevant period.
• A declaration confirming the applicant hasn't passed on the incidence of the tax to another person (to satisfy the unjust enrichment test), where applicable.
• A certificate from a Chartered Accountant or Cost Accountant, where the claim exceeds the prescribed threshold and the self-declaration alone isn't sufficient.

The refund process, step by step

1. Eligibility and relevant-date check

   The specific refund category is confirmed, and the relevant date for the two-year limit is fixed before anything else — getting this wrong at the outset risks the whole claim.

2. Computation under the applicable rule

   The refund amount is computed using the formula prescribed for that category — Rule 89(4) for zero-rated supplies without payment of tax, Rule 89(5) for inverted duty structure claims, and so on.

3. Filing Form RFD-01

   The application is filed online with supporting statements and declarations, and an acknowledgement in Form RFD-02 is issued once the application is complete.

4. Provisional refund, where applicable

   For eligible zero-rated and inverted-duty claims assessed as low-risk by the system, 90% is sanctioned provisionally within 7 days, in Form RFD-04, without waiting for full scrutiny.

5. Departmental scrutiny

   The balance amount, or the full amount for claims not eligible for provisional refund, goes through scrutiny. A deficiency memo (RFD-03) may be issued if something is missing, which restarts the processing clock once resubmitted.

6. Final sanction or rejection

   A final order is issued in Form RFD-06, sanctioning the refund or explaining a rejection — a show-cause notice is issued first if the officer proposes to reject or reduce the claim.

Processing timelines

Practical notes from our engagements

• The relevant date computed incorrectly. Since the two-year limit has no exceptions, getting the relevant date wrong — particularly for service exports, where it depends on when payment is actually received rather than when the service is provided — is the single riskiest mistake on a refund claim.
• Provisional refund no longer automatic. Since October 2025, the 90% provisional refund is granted based on a system risk evaluation, not automatically for every eligible claim — a clean, well-matched GSTR-1/3B/2B position materially improves the chance of being treated as low-risk.
• Shipping bill and invoice details not matching exactly. For export refunds, a mismatch between the invoice value on the shipping bill and the GST invoice is one of the most common reasons for a deficiency memo.
• Inverted duty computation done on the wrong basis. Rule 89(5) includes only input tax credit on inputs (goods), not on input services or capital goods — a computation that includes those overstates the claim and gets flagged during scrutiny.
• Deficiency memo response delayed. Once an RFD-03 deficiency memo is issued, the 60-day processing clock restarts only from resubmission — treating it as low priority simply extends how long the refund takes.

Related services

• GST LUT filingthe undertaking that allows export without upfront IGST payment, relevant to several refund categories.
• GSTR-2A/2B reconciliationthe credit-matching work that supports a clean refund application.
• GST notice & reply handlingfor a show-cause notice issued against a proposed refund rejection.
• GST return filingthe underlying returns a refund claim is checked against.

Frequently asked questions