NABI RASOOL T Business Advisor

Updated on: Apr 23, 2025

GST Refund

Businesses and individuals often find themselves in situations where excess GST is paid, whether due to export transactions, input tax accumulation, or simple clerical errors.The GST refund mechanism enables eligible taxpayers to claim back the excess tax. At IndiaFilings, our team of GST experts assists you throughout the GST refund process, right from documentation to filing and follow-up, ensuring timely and hassle-free disbursement of your refund.

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What is GST Refund?

A GST refund refers to the process by which taxpayers can claim a refund of excess GST paid to the government. This may occur in various situations such as exports, accumulation of Input Tax Credit (ITC), inverted duty structure, or tax paid by mistake. The GST law ensures that such overpayments do not become a cost to the taxpayer and provides a structured mechanism to claim refunds. Proper documentation and timely filing are essential to ensure a smooth refund process.  

IndiaFilings experts are here to assist you at every step of the GST refund process, ensuring accuracy, compliance, and faster processing.

Who Can Claim GST Refund?

Different types of people and businesses can claim a GST refund in the following situations:

• Exporters: Businesses that export goods or services can get a refund on the tax they paid on their inputs used for exports.
• SEZ Units and Developers: Businesses in Special Economic Zones (SEZs) can claim a refund on the GST paid on supplies made to them.
• Deemed Exports: Some transactions that are treated as deemed exports may also be eligible for a refund, even though the goods are not physically exported.
• UN Agencies and Embassies: The United Nations (UN) and foreign embassies are exempt from taxes and can claim a refund on purchases made in India.
• Businesses with Excess Input Tax Credit (ITC): If a business pays more tax on inputs (like raw materials) than the tax collected on finished goods, they can claim a refund for the extra ITC.Taxpayers Who Overpaid Tax: If a business pays more GST than required due to mistakes, they can claim a refund for the excess.
• Pre-deposit Refunds: If a business paid money upfront during an assessment or appeal, they can get a refund after the case is resolved.
• Provisional Assessment: If a business paid taxes based on a temporary assessment and later finds out they owe less, they can claim a refund for the difference.
• International Tourists: Tourists can claim a refund for GST paid on goods bought in India when they leave the country (not fully implemented yet).
• Wrong Tax Classification: If a business pays tax under the wrong category (for example, treating an interstate supply as an intrastate supply), it can get a refund once corrected.

When Can a GST Refund Be Claimed?

A GST refund can be claimed in various situations under the CGST Act, 2017, and typically arises under the following conditions:

Export of Goods or Services

GST refunds can be claimed on the export of goods or services as exports are considered zero-rated supplies.

Supplies to SEZs

Refunds are applicable on supplies made to Special Economic Zones (SEZs), both to SEZ developers and units.

Deemed Exports

Refunds are available for goods treated as deemed exports, even if no physical export takes place.

Purchases Made by UN or Embassies

Under Section 55 of the CGST Act, international organisations like the United Nations (UN) or embassies can claim a refund on taxes paid on purchases made in India.

Judgment, Decree, or Court Order

If a refund is granted due to a judgment, decree, or order by an appellate authority, court, or tribunal, it can be claimed. 

Refund of Accumulated Input Tax Credit (ITC)

Businesses may claim a refund if they have excess ITC due to an inverted duty structure where the tax on inputs exceeds the tax on outputs.

Finalisation of Provisional Assessment

If provisional assessments are made and later finalised with a different tax liability, the taxpayer can claim a refund for the excess paid.

Refund of Pre-deposit

Refunds can be claimed for pre-deposits made during litigation or assessment processes.

Excess or Mistaken Tax Payment

Refunds can be claimed if the taxpayer has paid excess or incorrect tax by mistake.

Refunds to International Tourists

International tourists can claim a refund for GST paid on goods purchased in India and carried abroad when leaving India (although this scheme is not yet fully notified).

Tax Paid in the Wrong Head

If a tax has been paid under the wrong classification (e.g., treating an interstate supply as an intra-state supply), a refund can be claimed after correcting the error.

Other Reasons

A refund may also be available for other reasons not mentioned above.

Prerequisites for Applying for a GST Refund

Before applying for a GST refund, certain requirements must be met:

Filing of GSTR-1 and GSTR-3B

For claiming a refund of tax paid or accumulated Input Tax Credit (ITC) for zero-rated supplies or deemed exports, the applicant must have filed GSTR-1 and GSTR-3B for the relevant month in which the supplies were made.

GSTR-1: Must include details for:

• Table 6A for exports.
• Table 6B for supplies to SEZ units or developers.
• Table 6C for deemed exports. 
• GSTR-3B: Ensure Table 3.1(b) is filled correctly in line with GSTR-1.

Any discrepancies between the GSTR-1 and GSTR-3B may cause delays in processing the refund. 

Invoice Details

The applicant should have a list of invoices for which the refund is being claimed, ensuring that all details match correctly.

Additional Certification

In certain cases, a Certificate from a Chartered Accountant or Cost Accountant may be required to validate the refund claim.

How to Claim a GST Refund

To claim a GST refund, taxpayers must file Form GST RFD-01 on the GST portal within two years from the relevant date. The application should be complete with all required documents and must be certified by a Chartered Accountant or Cost Accountant, where applicable.

Time Limit for Filing GST Refund (RFD-01)

A GST refund claim must be submitted within two years from the relevant date using the RFD-01 form. The relevant date typically refers to the date on which the event triggering the refund occurred, such as the date of export or payment.

Monthly Filing Requirements for GST Refund Claims

The RFD-01 form must be filed on a monthly basis for the following cases:

• Refund claims related to zero-rated supplies.
• Refund claims due to an inverted duty structure.
• Refund claims for deemed exports.
• Refund of excess balance in the electronic cash ledger.

Filing a Refund for Multiple Tax Periods

A single RFD-01 refund application can be filed for multiple tax periods, provided they are within the same financial year. This allows businesses to streamline the refund process for multiple months.

SEZ Supplies Refund Filing Time Limit

For supplies to Special Economic Zones (SEZs):

• When supplying goods, the refund claim must be filed once the receipt of goods is confirmed by an authorised officer from the SEZ.
• For services supplied to SEZ units or developers, the form should be filed once evidence of service receipt is authenticated by the specified officer of the SEZ.

Refund Claim for Unregistered Taxpayers

For unregistered taxpayers, the refund application must be filed within two years from the date of issuance of the contract cancellation letter. This ensures that the refund process adheres to the statutory time limit.

Documents Required for a GST Refund

The following documents are required for a registered taxpayer to claim a GST refund:

• Form GST RFD-01 and the ARN (Application Reference Number) printout.
• GSTR-3B/GSTR-3 printout for the relevant tax period.
• Statement-2 as per Rule 89(2)(c).
• Undertaking by the claimant as per Para 2.0 of Circular 24/2017.
• Export invoices and input services invoices.
• BRC/FIRC (Bank Realisation Certificate/Foreign Inward Remittance Certificate):
• BRC proves that the exporter has received payment from the importer for the exported goods.
• FIRC serves as proof of inward remittances made to India.
• Undertaking of no prosecution as per Rule 91(1).

These documents are necessary for the successful processing and approval of a GST refund claim.

Procedure to claim GST Refund

Here is the step-by-step process to claim a GST refund:

Step 1: Submission of Refund Request

The first step in the GST refund process begins when the taxpayer submits a refund request. This is done electronically via the GST portal. The application must include essential details such as the refund amount, the relevant tax period, and supporting documents to substantiate the claim.

Stage 2: Processing of Refund Application

Once the refund request is submitted, the GST authorities move to the second stage, where they process the application. This involves reviewing the submitted details and documents. If additional information or clarification is needed, the authorities may reach out to the taxpayer. Once the application is processed and approved, the refund amount is transferred to the taxpayer's bank account.

Stage 3: Refund Confirmation

In the final stage, the GST authorities issue an order confirming the approval of the refund. The refund amount is then credited to the taxpayer’s bank account. Throughout the entire process, taxpayers can track the progress of their refund application on the GST portal, which provides updates and alerts if further action or clarification is required.

GST Refund Process: Key Considerations

Here are the key points that taxpayers should know before initiating a GST refund process 

• Confirmation of Refund Submission: When the refund application is submitted electronically, the applicant will receive an email or text message with a confirmation number.
• Update of Cash Ledger and Input Tax Credit: The cash ledger and return book will be updated, and the carry-forward input tax credit will be automatically reduced.
• Refund Processing Timeframe: The authorities will process the refund request and the documents submitted within 30 days of receiving the application.
• Unjust Enrichment and Fund Allocation: If the refund application does not meet the necessary requirements, the funds will be returned to the Consumer Welfare Fund (CWF), which compensates consumers harmed by unfair practices.
• Pre-Examination for Large Refunds: If the refund amount exceeds a specified threshold, a pre-examination will be conducted before finalising the refund.
• Electronic Transfer of Refund: Once the refund is approved, the amount will be electronically transferred to the applicant's bank account via NEFT, RTGS, or ECS.
• Eligibility Criteria for Refund Requests: Refund requests for amounts less than INR 1,000 will not be eligible for processing under the GST refund process.

GST Refund Process for Exporters

As mentioned, Exporters can claim a GST refund for taxes paid on goods or services used in exports, as exports are treated as zero-rated supplies under the IGST Act, 2017. This means that although no GST is applied on exports, exporters are still entitled to a refund for the Input Tax Credit (ITC) they paid on the goods or services used for export.

Steps for Submitting a GST Refund Application

The refund process begins when the exporter submits an application through Form RFD-01 on the GST portal. Along with the application, the exporter must provide necessary documents such as export invoices, Bank Realisation Certificates (BRC), and Foreign Inward Remittance Certificates (FIRC) to confirm that the export has occurred and payment has been received.

GST Refund Processing and Timeline

Once the application is submitted, the GST authorities are required to process the refund within 45 days from the date of application. After processing, the refund is credited directly to the exporter’s bank account.

Interest on Delayed GST Refunds

If the refund is not processed within 60 days from the application date, the exporter is entitled to receive interest on the delayed amount, ensuring that they are compensated for any delay in the refund process.

GST Refund Claim for GST Unregistered Person

If an unregistered person is eligible for a GST refund due to excess tax paid, typically due to the cancellation or termination of an agreement or contract, they need to follow a specific process.

As per Notification No. 26/2022, if an unregistered person claims a refund due to excess tax paid on account of the cancellation or termination of a supply agreement, the following documents must be submitted:

A statement containing invoice details, including the invoice number, date, value, and tax paid.

• Copy of the invoices.
• Proof of payment has been made to the supplier.
• Copy of the agreement (or registered contract) for the supply of services.
• A letter from the supplier confirming the cancellation or termination of the agreement.
• Proof of payment received from the supplier after cancellation.
• A certificate from the supplier stating:
• The tax has been paid on the invoices for which the refund is claimed.
• The supplier has not claimed or adjusted the tax against their liability via credit notes.
• The supplier has not, and will not, claim a refund for the tax involved on these invoices.

How to Track GST Refund Status Online

Once the refund application has been filed using RFD-01, taxpayers can track their GST refund status online through the following methods:

Post-Login Tracking

To track the status after logging into the GST Portal, navigate to the Services tab. From there, select the relevant year and confirm your bank account details to get accurate refund status information.

Pre-Login Tracking

For this option, there is no need to log in to the GST portal. Simply visit the portal, click on 'Track Application Status', and enter your ARN (Application Reference Number) to view the refund status.

Refund Status Tracking for IGST Paid on Exports of Goods

For tracking refunds related to IGST paid on exports of goods, log in, select the fiscal year, and choose the appropriate quarterly files. Then, enter the relevant invoice information to check the status of the refund.

How IndiaFilings Helps in GST Refund?

Navigating the GST refund process can be complex, involving strict documentation, timely filings, and constant follow-ups with the tax department. At IndiaFilings, our team of GST experts simplifies this process for you. From evaluating your eligibility to preparing and filing Form RFD-01, we ensure your application is accurate and fully compliant with GST laws. We also assist in responding to any queries from the department, tracking the refund status, and ensuring timely disbursement. 

Claim your GST refund quickly and accurately with IndiaFilings — Get started today!