GST Refund
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Here’s a detailed overview of GST Refunds in India, including eligibility, types, process, and key considerations for taxpayers
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Table of Content
- GST Refund
- What is a GST Refund?
- Eligibility for GST Refund
- Types of GST Refunds
- Documents Required for GST Refund
GST Refund
A GST refund is a claim made by a taxpayer to recover excess GST paid or unutilized Input Tax Credit (ITC) due to specific scenarios like exports, inverted duty structure, or accumulated ITC.
Refunds can be claimed in the following cases:
- Export of Goods/Services (including supplies to SEZ units).
- Inverted Duty Structure (higher input tax rate than output tax rate).
- Accumulated ITC (e.g., due to zero-rated supplies).
- Tax Paid on Intra-State Supply Later Declared Inter-State (and vice versa).
- Refund for Foreign Tourists (Tourist Refund Scheme).
- Excess Tax Paid Due to Error.
| Refund Type | Description |
| Export of Goods | Refund of IGST paid on exports or unutilized ITC for zero-rated supplies. |
| Export of Services | Refund of ITC accumulated due to export of services. |
| Inverted Duty Structure | Refund of ITC accumulated due to higher input tax rates than output tax rates. |
| Provisional Refund | 90% refund granted temporarily to exporters within 7 days (now replaced by a 60-day processing rule). |
| Tourist Refund Scheme (TRS) | Refund of GST paid by foreign tourists on goods taken out of India. |
For Exports:
- Export invoices.
- Shipping bills/Bill of Lading.
- Foreign Inward Remittance Certificate (FIRCs)/Bank Realization Certificate (BRC).
- Copy of GST return (GSTR-3B/GSTR-1).
- Details of input and output supplies.
- Invoices showing higher input tax rates.
- Original tax invoice.
- Passport and flight ticket of the tourist.
GST Refund Process
- File Refund Application:
- Submit Form GST RFD-01 on the GST portal.
- Attach supporting documents (invoices, BRC, etc.).
FAQs for GST Revocation
A GST refund is a reimbursement of taxes paid under the Goods and Services Tax (GST) regime, typically claimed in cases of:
- Exports or zero-rated supplies.
- Accumulated Input Tax Credit (ITC) due to an inverted duty structure.
- Overpayment or erroneous tax payments.
- Supplies to Special Economic Zones (SEZs).
- Registered taxpayers (e.g., exporters, SEZ suppliers, businesses under inverted duty structure).
- Unregistered persons in specific cases (e.g., embassies, tourists under the Tourist Refund Scheme).
- Taxpayers affected by provisional assessments or court orders.
- General refunds:
- GST returns (GSTR-1, GSTR-3B).
- Invoices and proof of tax payment.
- Refund application (FORM GST RFD-01).
- Exports/SEZs:
- Shipping bills, Bank Realization Certificate (BRC), export invoices, and Letter of Undertaking (LUT)/bond copy.
- Inverted duty structure:
- Details of accumulated ITC and invoices showing higher input taxes.
- Generally 2 years from the "relevant date" (e.g., date of export, tax payment, or assessment).
- Example: In India, missing the deadline results in rejection.
Refund = [(Turnover of inverted supply × Net ITC) ÷ Adjusted Total Turnover] × Relevant GST rate.
- Net ITC: ITC accumulated due to higher input tax rates.
- Excludes notified goods (e.g., pan masala, certain textiles).
- File FORM GST RFD-01 electronically on the GST portal.
- Submit supporting documents (invoices, BRC, etc.).
- Provisional refund (90% of the amount) may be issued within 7 days for exports.
- Final refund processed within 60 days after verification.
- Yes, but only in specific cases:
- Foreign tourists under the Tourist Refund Scheme (TRS).
- Embassies/UN bodies (if covered under international treaties).
Common reasons include:
- Unjust enrichment (taxpayer passed the tax burden to customers).
- Missing/invalid documents (e.g., expired shipping bills).
- Non-filing of GST returns (GSTR-1/GSTR-3B).
- Claim filed after the 2-year deadline.
- Refunds for domestic supplies require proof that the taxpayer absorbed the tax burden (not passed to customers).
- Exemptions apply for exports, SEZ supplies, and refunds to specific entities (e.g., government departments).
- Yes, for exporters:
- 90% of the refund amount is granted within 7 days of application.
- Balance 10% released after final verification.
Yes, for ITC on goods/services received 30 days before registration (subject to invoice validity and business use).
Track via the GST portal using the ARN (Application Reference Number) generated after filing RFD-01.
Related Business Registrations
In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.
