All Types of GST Refunds in India – A Complete Guide with Sections & Rules

📘 Complete Guide to GST Refunds in India: All Types, Sections & Practical Examples

Goods and Services Tax (GST) in India allows taxpayers to claim refunds in various scenarios like exports, excess tax paid, input credit accumulation, and more. The refund mechanism ensures that tax does not become a cost to businesses, especially those engaged in exports or zero-rated supplies.

This article gives you a comprehensive guide to all types of GST refunds, their eligibility, process, and legal backing under the CGST Act and Rules.

✅ List of All GST Refunds with Sections & Rules

Below is a table summarizing the types of GST refunds allowed under Indian law along with the relevant Sections and Rules.

S. No.	Type of Refund	Description	Section	Rule
1	Export (Without Payment of Tax)	Refund of ITC on zero-rated supplies under LUT	Sec 54(3)	Rule 89(4)
2	Export (With Payment of IGST)	Refund of IGST paid on exports	Sec 54(1), Sec 16 IGST Act	Rule 96
3	Supplies to SEZ (Without Tax)	Refund of ITC on supply to SEZ units under LUT	Sec 54(3), Sec 16 IGST Act	Rule 89(4)
4	Supplies to SEZ (With Tax)	Refund of tax paid on SEZ supplies	Sec 54(1)	Rule 89(1)
5	Inverted Duty Structure	Accumulated ITC due to higher input tax	Sec 54(3)(ii)	Rule 89(5)
6	Deemed Exports	Refund of tax on deemed export supplies	Sec 54(1)	Rule 89(2)(g)
7	Excess Cash Ledger Balance	Unused balance in Electronic Cash Ledger	Sec 54(1)	Rule 89(1)
8	Finalisation of Provisional Assessment	Refund due to assessment order	Sec 54(1)	Rule 92
9	Refund by Appellate/Court Order	Refund due to successful appeal	Sec 54(1)	Rule 92
10	Excess Payment of Tax	Refund of tax paid wrongly or in excess	Sec 54(1)	Rule 89(1)
11	Cancelled Supply of Services	Refund when invoice raised but supply not made	Sec 54(1)	Rule 89(1)
12	Wrong Head Payment (CGST instead of IGST)	Tax paid under wrong head	Sec 77 of CGST, Sec 19 of IGST	Based on Circular 162/18/2021-GST
13	Refund to UN Agencies/Embassies	GST refund to notified diplomatic bodies	Sec 55	Rule 95
14	Tourist Refund of IGST	Refund to international tourists on departure	Sec 15 IGST Act	Rule 95A
15	Refund of Interest, Penalty, Fee	Paid in excess or by mistake	Sec 54(1)	Rule 89(1)

📄 Refund Application – Key Forms

Form No.	Purpose
RFD-01	Application for claiming refund
RFD-03	Deficiency Memo (if any error in refund claim)
RFD-04	Provisional Refund Order
RFD-05	Payment Order
RFD-06	Final Refund Sanction Order
RFD-07	Order for withholding refund
RFD-08 / 09	Show cause notice and reply

⏱️ Time Limit for Filing Refund

You must file refund applications within 2 years from the relevant date as per the Explanation to Section 54 of the CGST Act.

📘 Section 54 of the CGST Act, 2017 – GST Refund Explained

What is Section 54 of the CGST Act?

Section 54 of the Central Goods and Services Tax (CGST) Act, 2017 governs refunds of tax, interest, or any other amount under GST. It provides a legal framework for claiming refunds arising from exports, excess tax paid, inverted duty structure, etc.

Full Title of Section 54

It allows a registered person or any other person to claim a refund of tax, interest, or any amount paid, provided the claim is made within the prescribed time and format.

Key Provisions under Section 54

Any registered or unregistered person who has:
- Paid tax in excess
- Exported goods or services
- Accumulated Input Tax Credit (ITC)
- Paid tax under provisional assessment
- Received a favorable appellate order

Relevant Date Examples:
- Export of goods: Date of shipping bill
- Services: Date of receipt of payment
- Excess payment: Date of payment
- Finalization of provisional assessment: Date of final order

Allowed in cases of:
- Zero-rated supplies (exports without payment of tax)
- Inverted Duty Structure

⛔ Not allowed for:
- Capital goods
- Blocked credit under Section 17(5)

🔍 Refund Processing Timeline (as per Section 54)

Stage	Timeline
Application Filed (RFD-01)	Within 2 years
Provisional Refund (90%)	Within 7 days (if export case)
Final Refund	Within 60 days of complete application
Interest on Delay	6% or 9% (if withheld by department)

⚖️ Section 54(3) – Refund of Unutilized ITC

A registered person may claim refund of unutilized ITC at the end of any tax period if such credit has accumulated due to:
- Zero-rated supplies without payment of tax (under LUT)
- Inverted tax structure

⛔ Not allowed if:
- Output supplies are nil-rated or fully exempt
- Supplies are not taxable
- Refund is already claimed elsewhere

📚 Complete "Relevant Date" Reference Table – as per Section 54

The "relevant date" is crucial for determining the 2-year time limit for filing GST refunds. Here's the comprehensive table covering all scenarios:

S. No.	Nature of Refund	Relevant Date	Legal Reference
1	Export of goods (without payment of tax)	Date on which the ship or aircraft leaves India or the date of export manifest/report is filed (whichever is later)	Explanation 2(a) to Section 54
2	Export of services (without payment of tax)	Date of receipt of payment in convertible foreign exchange or INR (as permitted by RBI)	Explanation 2(b)
3	Goods not exported (but tax paid)	Date of payment of tax	Explanation 2(c)
4	Deemed exports	Date of filing return relating to such deemed export supplies	Explanation 2(d)
5	Refund of unutilized ITC (inverted duty/exempted/nil-rated)	End of the financial year in which such claim arises	Explanation 2(e)
6	Excess tax paid	Date of payment of tax	Explanation 2(f)
7	Refund on finalization of provisional assessment	Date on which final assessment order is passed	Explanation 2(g)
8	Refund on account of appeal/revision/tribunal/court order	Date of such order (if tax becomes refundable as a result of order)	Explanation 2(h)
9	Refund to UN, embassies, and consulates	Last day of the quarter in which supply was received	Rule 95
10	Refund due to wrong tax paid under wrong head (e.g., CGST+SGST instead of IGST)	Date of payment of incorrect tax	Circular 162/18/2021-GST

🔍 Key Points to Remember:

For Service Exporters (Most Common):
- Relevant date = Date of receipt of foreign exchange (not invoice date)
- Must file refund within 2 years from this date
- FIRC/BRC from bank serves as proof of receipt date

For Inverted Duty Structure:
- Relevant date = End of financial year (31st March)
- More relaxed timeline compared to exports

For Wrong Head Payments:
- Relevant date = Date of wrong payment
- Quick refund mechanism available through circular provisions

🧮 GST Refund Formula under Rule 89(4)

When is this formula used?

For export of goods or services or SEZ supplies without payment of tax (i.e., under LUT or bond).
When you want to claim refund of unutilized Input Tax Credit (ITC).

Formula:

Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) × Net ITC ÷ Adjusted Total Turnover

Let's Break It Down:

Term	Meaning
Turnover of zero-rated supply of goods/services	Value of exports or SEZ supplies made without payment of IGST
Net ITC	Total Input Tax Credit (ITC) available on inputs and input services during the refund period (excluding capital goods and blocked credit under Sec 17(5))
Adjusted Total Turnover	Total turnover in a State/UT excluding exempt supplies and including zero-rated supplies, during the refund period

💡 Example: Software Exporter

Company: TechVerse Pvt. Ltd.

Period: April 2025
Export Invoices: $12,000 to US (INR equivalent ₹10,00,000) – no GST charged
ITC Available: ₹2,00,000 (Rent, cloud services, audit fee, software subscriptions)
Adjusted Total Turnover (only export of services): ₹10,00,000

Apply Formula:

Refund = (10,00,000 × 2,00,000) ÷ 10,00,000
Refund = ₹2,00,000

The company can claim ₹2,00,000 as GST refund.
You can prepare this in Excel format, then upload as Statement 3 in JSON or PDF.

🧾 Practical Illustration: GST Refund for Software Export Company

Company Name: TechVerse Solutions Pvt. Ltd.
Nature of Business: Export of Software Development & SaaS services to US and UAE clients
GST Registration: Regular (Non-composition)
Export Method: Zero-rated supply under LUT (Letter of Undertaking) – No IGST paid

Legal Framework

Aspect	Provision
Governing Section	Section 54(3) of CGST Act
Applicable Rule	Rule 89(1) and Rule 89(4) of CGST Rules
Export Type	Zero-rated supply of services under Section 16 of IGST Act
Refund Type	Refund of unutilized Input Tax Credit (ITC)

Pre-conditions for Refund

Requirement	Status
LUT Filed on GST Portal	✅ Yes (Valid for FY)
GSTR-1 Filed	✅ Monthly filing with export invoices
GSTR-3B Filed	✅ With declared ITC & zero-rated turnover
Input Services	✅ ITC on rent, internet, software tools, laptops, etc.
Foreign Remittance Received	✅ FIRC from Bank in USD

Sample Calculation (April 2025)

Particulars	Value
Total Input Tax Credit (ITC) available	₹2,00,000
Turnover of zero-rated supply (USD $12,000)	₹10,00,000
Adjusted total turnover (same as above, all services exported)	₹10,00,000

So, TechVerse can claim a refund of ₹2,00,000 of unutilized ITC.

📄 Document Checklist

Document	Description
✅ LUT Acknowledgement	Downloaded from GST portal
✅ Export Invoices	Raised in INR & USD with client details
✅ FIRC/BRC	Proof of inward remittance from foreign bank
✅ GSTR-1 & GSTR-3B	Filed and reflecting export turnover and ITC
✅ Input Tax Invoices	Rent, Zoom, AWS, software, domain, etc. with GSTIN
✅ Statement 3	Summary of export invoices for the refund period
✅ CA Certificate	(if refund > ₹2L, optional if invoice-based export)

🖥️ Steps to File GST Refund on GST Portal

Step-by-Step Portal Process

Login to https://www.gst.gov.in
Navigate to: Services > Refunds > Application for Refund
Choose Refund of unutilized ITC on account of Export without payment of Tax
Select the financial year and month (e.g., April 2025)
Upload:
- Statement 3 (invoices)
- Supporting documents (FIRC, LUT copy, etc.)
System auto-fills eligible refund amount
Preview and Submit the application using DSC/EVC
ARN (Acknowledgement Number) is generated
Refund status can be tracked via "Track Application Status"

📌 Timeline & Processing

Stage	Time
Provisional Refund (90%)	Within 7 days (export cases)
Final Refund	Within 60 days
Interest	@6% after 60 days (if delayed)

⚠️ Common Errors to Avoid

🚫 Not linking LUT
🚫 Mismatch between GSTR-1 and 3B
🚫 BRC/FIRC not uploaded or not received in time
🚫 Claiming ITC on ineligible inputs (e.g., capital goods)
🚫 Filing after 2 years from "relevant date"

✅ Summary of Legal Provisions

Legal Reference	Description
Section 54(3)	Refund of unutilized ITC for zero-rated supply
Rule 89(1)	Procedure to claim refund
Rule 89(4)	Formula for refund amount
Section 16 of IGST Act	Zero-rated supply (exports without tax)

🧠 Key Takeaways

Section 54 is the core legal provision for GST refund claims.
Refund must be filed within 2 years from the relevant date.
Applicable to exporters, SEZ suppliers, dealers under inverted duty.
Use Form GST RFD-01 to apply via GST portal.
Provisional refund for exporters processed within 7 days.

🙋 Expert Tips

Always maintain a separate folder for each refund month with:
- Invoice-wise export statement
- Proof of foreign receipts
- GSTR returns PDF
- Purchase register for ITC claimed

📌 Final Thoughts

Understanding GST refund categories helps businesses manage working capital better and ensure compliance. Proper documentation, reconciliation, and timely filing of claims are critical to avoid delays or rejections.

If you're exporting, dealing with SEZ units, or working under inverted duty structures – don't miss out on eligible refunds!

✅ Step-by-Step Data Collection Checklist for GST Refund Filing

Here's a comprehensive, practical checklist of the data you must collect to file a GST Refund Application (RFD-01) under the category: "Refund of Unutilized ITC on account of Export of Services without payment of tax (under LUT)."

This checklist ensures smooth filing, faster processing, and minimal risk of rejection or deficiency memo.

📅 Step 1: Choose the Refund Period

Example: April 2025 (Monthly)
Select a calendar month or quarter where exports occurred and ITC was accumulated.

📂 Step 2: Collect Basic Business & LUT Details

Item	Details Required
GSTIN	Your 15-digit GST Number
Legal Name / Trade Name	As per registration
LUT Reference Number	LUT ARN for the financial year
LUT Validity	Ensure LUT is valid for the refund period
Nature of Export	Export of Services (without payment of IGST)

📄 Step 3: GSTR Returns Data

Return	Action
GSTR-1	Ensure export invoices are declared under Table 6A
GSTR-3B	Ensure ITC is claimed under Table 4(A) and exports under Table 3.1(b)
GSTR-2B / Purchase Register	Download to reconcile ITC available during refund period

📋 Step 4: Export Invoice Details (for Statement 3)

Column	Description
Invoice No.	Export Invoice Number
Invoice Date	Date of Issue
Invoice Value	INR Value
Foreign Currency Value	USD, EUR, etc.
Place of Supply	"Other Territory" or country name
Type	Export of Services
Shipping Bill / BRC No.	Optional for services
FIRC/BRC Date & Number	Proof of remittance (foreign currency received)

🧾 Step 5: Input Tax Credit (ITC) Register for the Period

Input Type	Vendor Name	Invoice No.	GSTIN	Date	Tax Amount (CGST/SGST/IGST)	Total
Rent	ABC Pvt. Ltd.	223	36ABCDE1234Z5	05-Apr-2025	₹9,000 IGST	₹9,000
Software	Microsoft	INV-421	N/A	09-Apr-2025	₹18,000 IGST	₹18,000
Audit Fees	CA Firm	211	36XXXXZ1234	14-Apr-2025	₹6,300 CGST + ₹6,300 SGST	₹12,600

✔️ Filter only eligible ITC on inputs and input services.
❌ Do not include ITC on capital goods, blocked credit (Sec 17(5)), etc.

💰 Step 6: Foreign Remittance Proof (FIRC / BRC)

Obtain Foreign Inward Remittance Certificate (FIRC) from your bank for each export.
FIRC must:
Match the export invoice
Be in the same refund period
Be in foreign currency
If not received yet → wait before applying

📥 Step 7: Prepare Supporting Declarations

Document	Description
❑ Declaration under Rule 89(2)(l)	Not prosecuted under any tax law in last 5 years (required if refund > ₹2 lakhs)
❑ Undertaking on Unjust Enrichment	Refund claimed does not result in unjust enrichment
❑ Self-certified ITC summary	Summary of eligible ITC claimed during refund period
❑ CA Certificate (Optional)	If system asks for validation or refund > ₹2L (not mandatory in all cases)

🧾 Final Checklist Before Filing

Task	Status
🔲 LUT Filed for the year	✅ Yes
🔲 Export invoices in GSTR-1 (Table 6A)	✅
🔲 ITC claimed in GSTR-3B (Table 4)	✅
🔲 FIRC/BRC received	✅
🔲 Statement 3 prepared	✅
🔲 Purchase register reconciled with GSTR-2B	✅
🔲 Input tax invoices attached in PDF (optional but recommended)	✅
🔲 Supporting declarations signed	✅

🖥️ Portal Upload Summary

Field on GST Portal	Your Data
Period	e.g., April 2025
Refund Type	Refund of unutilized ITC (Export without tax)
Statement 3	Upload JSON / PDF
FIRC/BRC	Upload PDF
LUT	Upload copy
Other Docs	ZIP or PDF under 5MB

📊 Excel Template for Statement 3 & ITC Calculation

Sample Export Statement Format:

Sr. No.	Invoice No.	Invoice Date	Client Name	Country	Currency	Foreign Value	INR Value	GST Rate	IGST Amount	Place of Supply
1	EXP-001	05-Apr-2025	ABC Corp	USA	USD	$5,000	₹4,16,750	0%	₹0	Other Territory
2	EXP-002	15-Apr-2025	XYZ Ltd	UK	GBP	£3,000	₹3,12,500	0%	₹0	Other Territory
Total							₹7,29,250		₹0

Sample ITC Register Format:

Sr. No.	Vendor	Invoice No.	Invoice Date	Description	CGST	SGST	IGST	Total ITC
1	Office Landlord	RENT-04	01-Apr-2025	Office Rent	₹4,500	₹4,500	₹0	₹9,000
2	AWS Services	INV-2025-04	10-Apr-2025	Cloud Services	₹0	₹0	₹9,000	₹9,000
3	CA for Audit	CA-INV-123	20-Apr-2025	Audit Fees	₹2,250	₹2,250	₹0	₹4,500
Total					₹6,750	₹6,750	₹9,000	₹22,500

Auto-Calculation Formula:

Total Export Turnover: ₹7,29,250
Total ITC Available: ₹22,500
Adjusted Total Turnover: ₹7,29,250 (only exports)

🚀 Advanced Tips for Faster Processing

1. Document Organization Strategy

Create folders for each refund month:

GST Refunds/
├── 2025-04-April/
│   ├── Export Invoices/
│   ├── Purchase Invoices/
│   ├── FIRC-BRC/
│   ├── GSTR Returns/
│   └── Supporting Documents/

2. Monthly Reconciliation Checklist

Before Month End:
- [ ] Update export register
- [ ] Collect all purchase invoices
- [ ] Verify GSTIN of all vendors
- [ ] Follow up pending FIRC from bank
- [ ] File GSTR-1 with all export entries

After Month End:
- [ ] File GSTR-3B correctly
- [ ] Download GSTR-2B for ITC verification
- [ ] Prepare Statement 3
- [ ] Calculate refund amount
- [ ] File RFD-01 within 15 days

3. Common Rejection Reasons & How to Avoid

Rejection Reason	Prevention Strategy
FIRC not matching invoice	Ensure FIRC amount matches invoice amount exactly
ITC claimed on blocked items	Review Section 17(5) restrictions carefully
Export not reflected in GSTR-1	Double-check Table 6A entries before filing
LUT expired	File fresh LUT before starting exports
Mismatch in turnover	Reconcile GSTR-1 and GSTR-3B figures

4. Automation Tools & Software

Recommended Tools:
- Tally Prime: Auto-generate Statement 3
- BUSY Accounting: Export-import module
- ClearTax: GST return filing and refund tracking
- Excel Macros: Custom templates for reconciliation
- Bank APIs: Auto-fetch FIRC data

5. Monthly Refund Timeline

Week	Activity
Week 1	Export invoices, collect purchase bills
Week 2	File GSTR-1, follow up FIRC
Week 3	File GSTR-3B, prepare refund documents
Week 4	File RFD-01, track refund status

💡 Pro Tips from CA Practice

Best Practices for Export Service Providers:

Invoice in INR: Always raise export invoices in INR to avoid conversion issues
Monthly Filing: Don't wait for quarterly filing - monthly refunds improve cash flow
Bank Coordination: Maintain good relationship with bank for faster FIRC processing
Documentation: Over-document rather than under-document
Professional Help: Engage CA for first few refunds to establish process

Red Flags to Avoid:

❌ Round Figure Syndrome: Avoid claiming exactly ₹2,00,000 or ₹5,00,000
❌ Delayed FIRC: Don't file refund without proper FIRC documentation
❌ Capital Goods ITC: Never include laptop, furniture, vehicle ITC in export refunds
❌ Personal Expenses: Avoid claiming ITC on personal mobile, travel, food
❌ Backdated Documents: All documents should have proper dates and sequence

📞 When to Seek Professional Help

Engage a CA or GST Consultant if:
- Annual export turnover > ₹2 crores
- Multiple currencies and countries involved
- Complex input service arrangements
- Previous refund rejections or notices
- Lack of internal GST expertise
- Time constraints for compliance

🙋 Need Help with GST Refunds?

Custom Excel templates for Statement 3 and ITC calculation
Automated refund processing systems
GST refund consultation and filing
Export documentation and LUT procedures
Refund rejection resolution and appeals

Contact Details:
👉 Email: info@catools.in
🌐 Website: www.catools.in
📱 WhatsApp: [+91-XXXXXXXXXX]

Free Resources Available:
- GST Refund Calculator Excel Template
- Monthly Compliance Checklist
- Export Invoice Format
- ITC Reconciliation Tools

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