When Can You Claim a Refund?
- Export of goods or services (under LUT or after IGST payment)
- Supplies to SEZ (zero-rated)
- Deemed exports (supplies to advance authorisation holders, EPCG holders, EOUs)
- Inverted duty structure (when input tax rate is higher than output tax rate)
- Excess tax paid due to mistake
- Excess balance in electronic cash ledger
- Refund of pre-deposit in case of appeal where the appeal is decided in your favour
- Tax paid on supplies that didn't happen (advance received but supply cancelled)
- Refund to UIN holders (embassies, UN bodies)
Time Limit
Refund application must be filed within 2 years from the "relevant date":
- For exports — date of export (for goods) or date of receipt of payment in foreign exchange (for services)
- For inverted duty — end of the financial year
- For excess payment — date of payment
- For appeals — date of order
Application Form: RFD-01
All refund applications are filed in Form GST RFD-01 through the GST portal. Different annexures for different refund types:
| Refund type | Annexure |
|---|---|
| Export of goods under LUT | Statement 3 |
| Export of services under LUT | Statement 2 |
| Export with IGST payment | Auto from shipping bills |
| SEZ supplies | Statement 4 |
| Deemed exports | Statement 5B |
| Inverted duty structure | Statement 1A |
| Excess cash ledger balance | Statement 7 |
Refund Process
- File RFD-01 on gst.gov.in with supporting documents
- RFD-02 — Acknowledgement issued within 15 days if application is complete
- RFD-03 — Deficiency memo if application has gaps (you must rectify)
- Verification by the proper officer
- Provisional refund (RFD-04) — 90% can be released within 7 days for zero-rated supplies
- RFD-06 — Refund sanction order
- RFD-05 — Payment advice; refund credited to your bank account
Inverted Duty Structure Refund
If the GST rate on your output is lower than the rate on your inputs, you accumulate unutilised ITC. You can claim this back as a refund.
Formula for maximum refund:
Refund = (Turnover of inverted-rated supply / Adjusted total turnover) × Net ITC − Tax payable on inverted-rated supply
Two Options for Export Refund
- Option A — Pay IGST and claim refund: Pay IGST on the export invoice, then claim refund of the IGST through the shipping bill. Automatic process via ICEGATE.
- Option B — Supply under LUT, claim ITC refund: File Letter of Undertaking (LUT) to make exports without payment of IGST. Then claim refund of unutilised ITC accumulated due to exports.
Most exporters choose Option B because it doesn't lock up working capital in IGST that gets refunded weeks later.
Interest on Delayed Refund
If refund is not granted within 60 days of acknowledgement (RFD-02), the government pays interest at 6% per annum on the delayed amount.
If Your Refund is Rejected
If the officer proposes to reject (full or partial), they issue RFD-08 (show cause notice). You reply in RFD-09. Final order in RFD-06. If rejected, you can appeal to the Commissioner (Appeals) within 3 months.
Documents Typically Required
- Statement of invoices (with tax amounts) for the refund period
- Shipping bills and BRC/FIRC for exports
- LUT acknowledgement (for exports under LUT)
- Tax payment challan for excess tax refunds
- Self-declaration if refund amount below ₹2 lakh
- CA certificate if refund amount above ₹2 lakh
iAccounting generates the supporting statements (Statement 1A for inverted duty, Statement 3 for exports, etc.) automatically — populated directly from your transaction data. Just download, upload to portal, submit.
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