What is a GST refund?
Reviewed by Ranga & Company
GST refund: A GST refund is the return of excess GST to a business, most often to exporters and to businesses whose input tax rate is higher than their output tax rate (an inverted duty structure).
At a glance
- Form
- RFD-01 on the GST portal
- Time limit
- 2 years from the relevant date
- Decision
- Within 60 days of a complete application
- Provisional
- 90% for zero-rated (export) claims
- Interest
- Payable by the government if refund is delayed beyond 60 days
Types of refund
| Situation | What you get back |
|---|---|
| Export under LUT | Unused input tax credit |
| Export with IGST paid | The IGST paid (goods: processed via customs shipping bill) |
| Inverted duty structure | Credit piled up because inputs are taxed higher than outputs |
| Excess cash ledger | Cash deposited but not used |
| Supplies to SEZ | Unused credit or IGST paid |
How a claim goes
- File RFD-01 with statements of invoices, shipping bills or BRCs
- Get an acknowledgement; respond to any deficiency memo (RFD-03) by refiling
- Receive provisional refund (exports) and the final order (RFD-06)
- The amount is credited to your registered bank account
Common mistakes
- Claiming refund on invoices not appearing in GSTR-2B
- Mismatched export values between shipping bills and invoices
- Missing the two-year time limit
Frequently asked questions
How long does a GST refund take?
The law requires a decision within 60 days of a complete application. Exporters can receive 90% provisionally sooner. Delays usually come from missing documents or deficiency memos.
What is the time limit to claim a GST refund?
Two years from the relevant date, which depends on the type of refund; for exports of goods it runs from the date of export.
Do exporters with IGST paid need to file RFD-01?
Not for goods: the shipping bill is treated as the refund application. Service exporters and LUT exporters file RFD-01.
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