GST Refund: Overview
To claim a GST refund, file Form GST RFD-01 on the GST portal under Services, then Refunds, then Application for Refund, within two years of the relevant date. Select the right refund type and attach the statements and documents the form asks for.
For exports without tax payment, the refund is of unutilised input tax credit. For an inverted duty structure, it is accumulated credit computed under Rule 89(5). For excess cash balance, it is money you deposited that is still unused in your electronic cash ledger. The officer must acknowledge your application, or raise a deficiency memo, within 15 days, and sanction the refund within 60 days of a complete application.
Key Takeaways
The time limit under Section 54(1) is two years from the "relevant date", and the relevant date differs for each refund type.
Three claims use RFD-01: exports under a Letter of Undertaking (LUT), inverted duty structure, and excess balance in the electronic cash ledger.
Exports with IGST paid are handled automatically from your shipping bill data and need no RFD-01.
A deficiency memo (RFD-03) does not extend the two-year limit. You correct the application and file a fresh one.
Delay beyond 60 days earns you interest at 6% a year under Section 56.
A refund of less than ₹1,000 is not granted, under Section 54(14).
Which GST Refund Can You Claim?
Different situations create different refunds, and each has its own computation, documents and clock. Here is how they line up.
| Refund Type | Legal Basis | What You Claim | Relevant Date (Starts the Two-Year Clock) | Provisional Refund |
|---|
| Export without payment of IGST (under LUT) | Section 54(3)(i), Rule 89(4) | Unutilised input tax credit | Goods: date the ship or aircraft leaves India. Services: date of receipt of payment in convertible foreign exchange | Yes, 90% |
| Inverted duty structure | Section 54(3)(ii), Rule 89(5) | Accumulated credit because input tax rate exceeds output rate | End of the financial year in which the claim arises | Reported to be allowed from 1 October 2025; confirm |
| Excess balance in electronic cash ledger | Section 54(1) | Unused cash deposited with the government | Count from payment date, to be safe; confirm with your adviser | No |
| Export with payment of IGST | Rule 96 | IGST paid on exports | Processed automatically from shipping bill and returns | Not applicable |
The same RFD-01 window also covers deemed exports, supplies to SEZ units, tax paid by mistake under the wrong head, and refunds arising from final assessment. This page deals with the three categories most businesses ask about.
Time Limit for Filing a GST Refund Under Section 54
Section 54(1) gives you two years from the relevant date. Miss it and the claim is time-barred. File early, and in practice treat the day before the second anniversary as your last safe day.
Example. A goods exporter's shipment leaves India on 12 October 2025. The relevant date is 12 October 2025, so the claim should be filed before the second anniversary in October 2027. An exporter of services receives foreign exchange on 3 March 2026. The relevant date is 3 March 2026, so the claim runs to March 2028.
A few related timings sit around that limit:
Within 15 days of filing
The officer issues an acknowledgement (RFD-02) or a deficiency memo (RFD-03).
Within 7 days of acknowledgement
Provisional refund of 90% for eligible zero-rated claims, issued through RFD-04.
Within 60 days of a complete application
The final order. Interest at 6% a year applies if the refund is late.
GST Refund on Export of Goods Without Payment of Tax
You export without paying IGST by furnishing a Letter of Undertaking. The LUT is filed on the portal in Form GST RFD-11 for each financial year, and it lets you ship tax-free while keeping your input credit. The credit you accumulate becomes the refund.
Rule 89(4): Refund = Turnover of zero-rated supply × Net ITC ÷ Adjusted total turnover. For goods, the zero-rated turnover is the lower of the FOB value in the shipping bill and the value in the tax invoice.
Example. Your zero-rated turnover is ₹60 lakh, your adjusted total turnover is ₹1 crore, and your net ITC for the period is ₹9 lakh. The refund is ₹60 lakh × ₹9 lakh ÷ ₹1 crore = ₹5.4 lakh.
Remember the LUT comes with an obligation. Under Rule 96A, you must bring in the export proceeds within the period FEMA allows. If you do not, you may have to pay the IGST with interest.
Documents Required for GST Refund on Services Export
An export of services qualifies as a zero-rated supply only if the conditions of the IGST Act are met: the supplier is in India, the recipient is outside India, the place of supply is outside India, you receive payment in convertible foreign exchange (or in Indian rupees where RBI allows), and the two parties are not merely establishments of the same person.
| Document | Purpose |
|---|
| Export invoices | Basis of the zero-rated turnover |
| Foreign Inward Remittance Certificate (FIRC) or Bank Realisation Certificate (BRC) | Proof that payment came in convertible foreign exchange |
| Copy of the LUT | Shows you exported without paying IGST |
| Agreement, work order or contract with the overseas client | Shows the nature of service and place of supply |
| Statement 3A | Invoice-wise details of services exported, with FIRC or BRC particulars |
| Copies of GSTR-1 and GSTR-3B for the period | Must agree with the claim |
| Statement of inward supplies and ITC computation | Supports Net ITC |
For goods, the shipping bill and export manifest data matched through the customs system do most of the proving, and the portal asks for the details in Statement 3. FIRC and BRC are mandatory for services, so keep them organised for goods too, because they show the proceeds came home. Statement numbering and requirements can change with portal updates, so check the version shown on the portal.
GST Refund Under Inverted Duty Structure, Step by Step
An inverted duty structure arises when the GST rate on your inputs is higher than the rate on your finished product. Credit piles up in your electronic credit ledger because your output tax is too small to use it. Think of a garment manufacturer buying fabric at 5% and 12% inputs, and selling clothes at 5%.
Rule 89(5): Maximum refund = (Turnover of inverted rated supply × Net ITC ÷ Adjusted total turnover) − (Tax payable on such inverted rated supply × Net ITC ÷ ITC availed on inputs and input services)
Example. Your turnover of inverted rated supply is ₹50 lakh, which is also your adjusted total turnover. Net ITC is ₹4 lakh, which equals ITC availed on inputs and input services. Tax payable on the inverted supply is ₹2.5 lakh. The maximum refund is (₹50 lakh × ₹4 lakh ÷ ₹50 lakh) − (₹2.5 lakh × 1) = ₹4 lakh − ₹2.5 lakh = ₹1.5 lakh.
1Identify the Period and Supplies
Identify the tax period and the supplies on which the rate is inverted.
2Take Credit from GSTR-2B
Take only the credit that appears in your GSTR-2B for those inward supplies.
3Exclude Capital Goods
Credit on capital goods is not part of the computation.
4Apply the Formula
Work out Net ITC and apply the formula.
5Cap the Claim
Cap the claim at the balance in your electronic credit ledger at the end of the tax period.
6Prepare the Statement
Prepare the invoice-wise statement of inward supplies the portal asks for.
7File RFD-01
File RFD-01 and attach the supporting documents.
Certain goods and services are notified as ineligible for an inverted duty refund, so check the list for your product before you start.
How to Claim Excess Cash Balance Refund on the GST Portal
Excess cash ledger balance arises when you deposit more than you owe, for example after a payment made in error or a liability that turned out smaller. You do not need to reverse credit or compute a formula, but the officer examines your claim for unjust enrichment and for any dues pending against you.
1Check the Balance
Go to Services, then Ledgers, then Electronic Cash Ledger.
2File Pending Returns
The portal will not process a refund, and the officer can withhold it, where returns are unfiled or dues are unpaid.
3Open the Refund Application
Go to Services, then Refunds, then Application for Refund and choose the excess cash balance option.
4Enter the Amount
The amount cannot exceed the balance. Confirm the bank account on your GST profile.
5Sign and File
File with DSC or EVC.
Whether you need a self-declaration or a Chartered Accountant's certificate depends on refund type and amount, and the portal annexure shows which applies. For claims other than ITC refunds, a certificate may be needed above ₹2 lakh. The portal shows the current requirement.
GST Refund Application Process: Form RFD-01 Online
The steps below apply to all three claims.
1Log In and Open the Form
Log in to the GST portal and go to Services, then Refunds, then Application for Refund.
2Select Type and Period
Select the refund type and the tax period.
3Fill in the Details
For exports, the shipping bill and invoice data; for inverted duty, the formula inputs; for cash balance, the amount.
4Upload Documents
Upload the statements and documents discussed above.
5Confirm the Bank Account
Refund is paid into the account on your GST profile.
6Preview and File
Accept the declaration and file with DSC (companies and LLPs) or EVC (others).
7Note the ARN
The portal also debits your credit or cash ledger by the claimed amount.
8Wait for RFD-02 or RFD-03
RFD-02 is the acknowledgement. RFD-03 is a deficiency memo.
Your refund is only as clean as the returns behind it. Mismatches between your GSTR-1, GSTR-3B and the shipping bill data are a main reason for delays. Our pages on the GSTR-1 Return Filing Service and GSTR-3B Return Filing Service explain those returns.
What Each RFD Form Means
| Form | What It Is | Issued By |
|---|
| RFD-01 | Refund application | You |
| RFD-01W | Withdrawal of the application | You |
| RFD-02 | Acknowledgement of a complete application | System or officer |
| RFD-03 | Deficiency memo | Officer, within 15 days |
| RFD-04 | Provisional refund order | Officer |
| RFD-05 | Payment advice | Officer |
| RFD-06 | Final sanction or rejection order | Officer |
| RFD-07 | Order for withholding the refund | Officer |
| RFD-08 | Show cause notice | Officer |
| RFD-09 | Your reply to RFD-08 | You |
GST Refund Status: Track Online with ARN
Log in and go to Services, then Track Application Status. Choose Refund as the type, enter your ARN and click Search. The status moves from filed, through acknowledgement and any deficiency memo or notice, to sanction and payment. Keep the ARN safe, since it identifies the application throughout.
GST Refund Deficiency Memo (RFD-03) and Show Cause Notice (RFD-08)
An RFD-03 means the officer found your application incomplete. Three things matter:
It arrives within 15 days of filing.
Your credit or cash ledger is re-credited with the amount debited at filing.
It does not stop the two-year clock. You file a fresh application, with a new ARN, after fixing every point in the memo, and the 60-day period starts again from the new acknowledgement.
How to respond. Read the memo twice and list each deficiency. Fix them one by one: a missing statement, a mismatch between invoices and returns, an unsigned declaration, an expired LUT. Then file a corrected RFD-01 with a covering note saying what changed. If time is short, do this at once. A memo that arrives in the last month of your window leaves little room.
Replying to a Show Cause Notice (RFD-08)
If the officer believes your refund is not admissible, wholly or partly, he issues a notice in Form RFD-08. You reply in Form RFD-09 within 15 days of receiving it. After considering your reply, he passes an order in RFD-06 sanctioning or rejecting the claim.
A strong reply answers each ground in the same order, attaches proof (returns, shipping bill data, FIRC, ledgers) and asks for a personal hearing. If the officer withholds the refund under Section 54(10) because of unfiled returns or unpaid dues, the order comes in RFD-07, and clearing those dues is your first job.
If RFD-06 rejects your claim, you can appeal to the Appellate Authority under Section 107 within three months of the order, extendable by one month.
Common Reasons for GST Refund Rejection and Solutions
| Reason | What to Do |
|---|
| Shipping bill details in GSTR-1 do not match customs data | Correct the GSTR-1 through the amendment tables before you apply, and wait for the data to match |
| FIRC or BRC missing or does not match the invoice | Obtain the certificate from your bank and tie it to the invoice number |
| LUT missing or expired for the year | File a fresh LUT in RFD-11 and keep a copy |
| Net ITC computed wrongly (capital goods included, ineligible credit used) | Recompute using only credit eligible and visible in GSTR-2B |
| Inward invoices missing from GSTR-2B | Ask the supplier to file; claim after they appear |
| Returns unfiled or dues outstanding | File returns and clear dues before applying |
| Refund claimed after two years | No remedy; file early next time |
| Bank account not validated or different from profile | Update and validate the account on the portal |
| Goods covered by the list of items ineligible for inverted duty refund | Check the notification before applying |
If your registration was cancelled by the officer before you could apply, restore it first. Our page on GST Registration Revocation Online explains how. If you are new to exporting and have no GSTIN yet, see New GST Registration Online.
Frequently Asked Questions
Got questions? Find clear answers from our CA / GST compliance team:
It is the return of money a taxpayer is entitled to: unutilised input tax credit on exports or inverted duty, excess cash ledger balance, or tax paid in error.
Form GST RFD-01, filed online on the GST portal under Services, then Refunds, then Application for Refund.
Two years from the relevant date under Section 54(1). The relevant date depends on the refund type.
No. The refund of IGST paid on exports is processed automatically from your shipping bill data after you file GSTR-1 and GSTR-3B.
Yes. Export under a Letter of Undertaking and claim the unutilised input tax credit with RFD-01.
It is an undertaking, filed each year in Form RFD-11, that lets you export without paying IGST.
It is when the GST rate on your inputs is higher than the rate on your output, leaving credit stuck in your ledger.
Rule 89(5). It balances your Net ITC against your inverted rated turnover and the tax payable on it.
File RFD-01 on the portal choosing the excess cash balance option, after your returns are up to date.
Export invoices, FIRC or BRC, the LUT, the contract, Statement 3A, and your GSTR-1 and GSTR-3B.
The final order is due within 60 days of a complete application. Provisional refund of 90% can come within 7 days for eligible zero-rated claims.
Yes. Interest at 6% a year applies if the refund is not sanctioned within 60 days under Section 56.
It is a notice that your application is incomplete. It is issued within 15 days of filing, and you file a fresh corrected application.
No. The limit still runs from the original relevant date.
Use Services, then Track Application Status, choose Refund and enter your ARN.
Reply to any RFD-08 notice with RFD-09 within 15 days. After a rejection order in RFD-06, you can appeal under Section 107 within three months.
Yes. Under Section 54(14), a refund of less than ₹1,000 is not granted.
Not usefully. The officer can withhold refund until returns are filed and dues paid.