---
title: "GST Refund Claims: Who Can Claim, RFD-01 & Rejection Reasons"
description: "Find out who can claim a GST refund, steps to submit pre-application form, how to apply using RFD-01, track refund status, and common reasons for rejection or d"
canonical: "https://busy.in/gst/refund-process-under-gst/"
author: "Jagdish Prasad"
published: "2023-02-22T08:30:00.000Z"
category: "GST"
---

-   GST refund can be claimed for eligible cases such as excess cash balance, excess tax payment, exports, supplies to SEZ, deemed exports, inverted duty structure, and refund arising from an order.
-   Most refund claims are filed in **Form GST RFD-01** on the GST portal. However, IGST refund on export of goods is generally processed through the shipping bill route under Rule 96.
-   Refund of unutilized ITC is mainly allowed for zero-rated supplies made without payment of tax and inverted duty structure cases, subject to Section 54 and Rule 89.
-   A complete refund application should be supported by matching returns, eligible ITC details, invoices, export documents, bank details, and category-specific statements.
-   If the refund application is incomplete, the officer may issue **an RFD-03 deficiency** **memo**, after which the taxpayer must file a fresh, corrected application.
-   A refund order should normally be issued within 60 days of receipt of a complete application. If delayed, interest may apply under Section 56 of the CGST Act.

# GST Refund Process: Complete Guide to Eligibility, Forms, Calculation & Claim (2026)

## **What is a GST refund?**

A GST refund means the taxpayer is entitled to get back tax, interest or any other amount paid under GST, subject to the conditions in the GST law. Refunds usually arise when tax has been paid in excess, GST was paid under the wrong head, ITC has accumulated because of exports or inverted duty structure, or a refund becomes due after an assessment, appeal or court order.

Under [Section 54](https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/acts/2017_CGST_act/active/chapter11/section54_v1.00.html) of the CGST Act, a person claiming a refund must generally file the application within 2 years from the relevant date, unless a specific exception applies. The refund of the balance in the electronic cash ledger can also be claimed in the prescribed form and manner.  For example, in the export of goods, it may relate to the date the goods leave India. For the [**export of services**](https://busy.in/gst/general-rules-of-place-of-supply-of-services/) , it is generally linked to the receipt of payment in convertible foreign exchange or a permitted currency, depending on the facts.

The relevant date varies by refund category. For unregistered persons covered by [CBIC Circular 188/20/2022,](https://gstcouncil.gov.in/sites/default/files/2024-06/cir-188-20-2022-cgst.pdf) the circular clarifies the relevant date for canceled construction contracts or terminated long-term insurance policies. In such cases, the date of the cancellation or termination letter may be treated as the relevant date where service was not actually completed.

## **Who can claim a GST refund?**

A GST refund can be claimed by the person legally entitled to it. Common eligible claimants include:

-   Exporters of goods or services making zero-rated supplies without payment of tax under LUT or bond
-   Exporters of goods who paid IGST on export invoices
-   Service exporters who paid IGST and claim a refund through RFD-01
-   Suppliers to SEZ units or SEZ developers, subject to endorsement and documentation
-   Businesses with accumulated ITC due to [**inverted duty structure**](https://busy.in/gst/what-is-an-inverted-duty-structure-under-gst/)
-   Taxpayers with an excess balance in the electronic cash ledger
-   Taxpayers who paid tax under the wrong head, such as [**CGST and SGST**](https://busy.in/gst/the-different-types-of-gst-in-india-cgst-sgst-igst-and-utgst/) instead of IGST
-   Suppliers or recipients of deemed exports, depending on who is eligible to claim
-   Persons entitled to refund due to assessment, appeal, tribunal order or court order
-   Unregistered persons in specific cases, such as canceled construction contracts or terminated long-term insurance policies, where GST was borne by them, and the credit note route is no longer available

## **How is GST refund calculated?**

### **1\. Refund for export under LUT without payment of tax**

For [**zero-rated supplies**](https://busy.in/gst/zero-rated-gst-items-2026/) made without payment of tax under LUT or bond, the refund of ITC is calculated under Rule 89(4). For this formula, Net ITC includes [**eligible ITC on inputs**](https://busy.in/gst/input-tax-credit-on-capital-goods/) and input services availed during the relevant period, excluding ITC for which a refund is claimed under specified sub-rules. The value of exported goods is taken as the lower of the free on board (FOB) value declared in the shipping bill or the value declared in the tax invoice/bill of supply.

Formula: **Refund Amount = Turnover of zero-rated supply of goods and services × Net ITC ÷ Adjusted Total Turnover**

### **Example**

| Particular | Amount |
| --- | --- |
| Net ITC | ₹12,00,000 |
| Turnover of zero-rated supplies | ₹80,00,000 |
| Adjusted total turnover | ₹1,00,00,000 |

Refund = ₹80,00,000 × ₹12,00,000 ÷ ₹1,00,00,000
Refund = ₹9,60,000

The maximum eligible refund in this example is ₹9,60,000, subject to portal validation and supporting documents.

### **2\. Refund for inverted duty structure**

An inverted duty structure means the GST rate on inputs is higher than the GST rate on outward supplies, leading to accumulation of ITC. The refund is calculated under Rule 89(5). In this formula, **Net ITC refers to ITC availed on inputs only**. [**ITC on input services**](https://busy.in/gst/input-tax-credit-on-common-credit/) is not included in Net ITC for inverted duty refund. However, input service ITC is relevant in the denominator used in the second part of the formula.

Formula: Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services × Net ITC) ÷ Adjusted Total Turnover} - {Tax payable on such inverted rated supply of goods and services × Net ITC ÷ ITC availed on inputs and input services}

### **Example**

| Particular | Amount |
| --- | --- |
| Turnover of inverted rated supplies | ₹50,00,000 |
| Adjusted total turnover | ₹70,00,000 |
| Net ITC on inputs | ₹6,00,000 |
| Total ITC on inputs and input services | ₹8,00,000 |
| Tax payable on inverted rated supplies | ₹75,000 |

Step 1 = ₹50,00,000 × ₹6,00,000 ÷ ₹70,00,000 = ₹4,28,571
Step 2 = ₹75,000 × ₹6,00,000 ÷ ₹8,00,000 = ₹56,250
Maximum refund = ₹4,28,571 - ₹56,250 = ₹3,72,321

**Note:** The 56th GST Council recommended extending 90% provisional refund to inverted duty structure refund claims, similar to the mechanism available for zero-rated supplies.

## Documents required for GST refund

Here are some common documents required for GST refunds:

-   Filed [**GST returns**](https://busy.in/gst/gst-returns/) for the relevant period
-   Pre-validated bank account linked to the GSTIN or [**temporary registration**](https://busy.in/gst/how-to-register-for-gst-in-india-a-step-by-step-guide/)
-   Relevant invoices, debit notes, credit notes and ledgers
-   Statement or offline utility required for the selected refund type
-   Reconciliation between books, returns and portal data
-   Undertakings or declarations as applicable

For businesses that file regular GST refund claims, maintaining invoices, ITC records, return data, and GST reports in one place can reduce mismatches when filing refunds. BUSY [**Accounting Software**](https://busy.in/accounting-software/) helps businesses manage GST billing, accounting, inventory, ITC records, and GST reports in a more organized way.

### **Export of goods with IGST payment**

-   Shipping bill or bill of export
-   [**Export invoice details in GSTR-1**](https://busy.in/gst/guide-to-gstr-1/) /Table 6A
-   [**Valid GSTR-3B**](https://busy.in/gst/a-guide-to-gstr-3b-what-is-gstr-3b/)
-   Export manifest or departure manifest
-   Correct port code, shipping bill number and date
-   Active IEC-GSTIN mapping on ICEGATE

### **Export under LUT without payment of tax**

-   LUT or bond details
-   Export invoices without IGST payment
-   Shipping bills or airway bills for goods
-   FIRC/BRC or payment realisation proof for services
-   Statement of export invoices
-   ITC reconciliation with [**purchase register and GSTR-2B**](https://busy.in/gst/what-is-gstr-2b-and-why-is-it-important/)
-   Turnover and Net ITC working under Rule 89(4)

### **Inverted duty structure refund**

-   Statement for inverted rated supplies
-   Purchase invoices for inputs
-   ITC working showing input-only Net ITC
-   GSTR-2B reconciliation
-   Output tax working for inverted rated supplies
-   Books of accounts and stock records, if required by the officer

### **Excess cash ledger refund**

-   RFD-01 under “excess balance in electronic cash ledger”
-   Bank account details
-   Return and cash ledger details as available on portal

## **GST refund pre-application form**

Before filing many refund claims, taxpayers may need to submit the **Refund Pre-Application Form** on the GST portal. It captures details such as the nature of business, IEC date for exporters, Aadhaar number of the authorized signatory, export value, [**income tax paid**](https://busy.in/accounting/tax-accounting/) , advance tax, and investment details. The GST portal states that the form does not need to be signed and cannot be edited or resubmitted once submitted.

## **How to apply for GST refund in Form RFD-01**

1.  Log in to the **GST portal**.
2.  Go to **Services > Refunds > Application for Refund**.
3.  Select the refund category.
4.  Choose the tax period.
5.  Enter refund details, turnover details and ITC details as required.
6.  Upload the applicable statement or offline utility.
7.  Attach supporting documents.
8.  Select the bank account.
9.  Preview the application carefully.
10.  Submit using DSC or EVC, as applicable.
11.  Save the ARN for tracking.

The [**GST portal**](https://busy.in/gst/what-is-gst-verification-and-why-is-it-important/) allows refund applications to be saved for up to 15 days. If not filed within that period, the saved draft is purged from the GST database.

## **IGST refund on export of goods**

For export of goods with payment of IGST, a separate RFD-01 is generally not required. The shipping bill acts as the refund application under Rule 96. The refund is processed through GSTN and Customs/ICEGATE data matching. Before expecting the refund, check:

-   Whether the GSTR-1 export invoice data is correctly filed
-   Whether GSTR-3B has been filed
-   Whether the shipping bill number, date and port code match
-   Whether EGM/departure manifest has been filed
-   Whether the bank account and IEC-GSTIN mapping are correct
-   Whether the refund scroll has been generated on ICEGATE

## **LUT route vs IGST route for exporters**

A regular exporter usually benefits from the LUT route because GST is not paid upfront on export invoices. However, LUT should be filed before making zero-rated supplies without payment of tax. Practical treatment may depend on timing, portal filing and officer handling. Check the table for a comparative analysis:

| Point | LUT route | IGST route |
| --- | --- | --- |
| Tax payment on export invoice | No IGST payment | IGST is paid first |
| Refund claim | Refund of [**accumulated ITC**](https://busy.in/gst/input-tax-credit/) | Refund of IGST paid |
| Main form/route | RFD-01 | Shipping bill route for goods |
| Working capital impact | Lower cash blockage | Tax amount remains blocked until refund |
| Best suited for | Regular exporters and service exporters | Exporters with clean shipping bill and GST return data |

## **Refund by unregistered persons**

Unregistered persons can claim GST refund only in specific situations. The unregistered person must obtain temporary registration on the GST portal using PAN, undergo Aadhaar authentication, add bank details and file Form GST RFD-01 under the category “Refund for unregistered person”. Separate applications are required for invoices issued by different suppliers or suppliers registered in different states. [CBIC Circular 188/20/2022](https://gstcouncil.gov.in/sites/default/files/2024-06/cir-188-20-2022-cgst.pdf) covers cases such as:

-   Cancellation of flat/building construction contract where GST was paid
-   Termination of long-term insurance policy where GST was borne by the buyer
-   Cases where the time limit for supplier [**credit note**](https://busy.in/gst/guide-to-a-credit-note-under-gst/) has expired

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## **Refund for embassies and international organisations**

Embassies, consulates, UN bodies and other notified persons with UIN can claim refund of GST paid on inward supplies, subject to the prescribed conditions. The GST portal allows such refund through Form GST RFD-10, generally linked with GSTR-11 details. The law currently refers to a 2-year time limit from the last day of the quarter in which such supply was received.

## **What happens after filing a refund application?**

| Action | Form | What it means |
| --- | --- | --- |
| Acknowledgement | RFD-02 | Application is treated as complete. |
| Deficiency memo | RFD-03 | Application has deficiencies. A fresh corrected application is required. |
| Provisional refund | RFD-04 | Provisional sanction, where applicable. |
| Payment order | RFD-05 | Refund payment order. |
| Final sanction or rejection | RFD-06 | Final order allowing or rejecting refund. |
| Withholding/release of withheld refund | RFD-07 | Refund is withheld or released from withholding. |
| Show cause notice | RFD-08 | Officer proposes rejection or partial rejection. |
| Reply to show cause notice | RFD-09 | Taxpayer reply to RFD-08. |
| Withdrawal | RFD-01W | Taxpayer withdraws refund before specified stage. |

Rule 90 provides that if deficiencies are noticed, the officer communicates them in RFD-03 and the applicant must file a fresh refund application after rectification. Rule 92 provides that if refund is proposed to be rejected, the officer must issue RFD-08 and allow reply in RFD-09 within 15 days.

## **Interest on delayed GST refund**

Section 56 provides interest if refund is not paid within 60 days from the date of receipt of the refund application under Section 54(1). The normal rate is up to 6% as notified. Where refund arises from an order passed by an adjudicating authority, appellate authority, tribunal or court that has attained finality, and is still not refunded within 60 days, the higher rate under the provision may apply. For example:

Refund amount: ₹5,00,000
Delay beyond 60 days: 30 days
Interest rate: [**6% per annum**](https://busy.in/gst/interest-calculator-in-gstr-3b-explained/)

Interest = ₹5,00,000 × 6% × 30 ÷ 365
Interest = ₹2,466 approximately

## **What to do if GST refund is rejected**

Before final rejection, the officer should issue a show cause notice in RFD-08. The taxpayer should reply in RFD-09 within the allowed time and address each objection with documents. If the refund is rejected through RFD-06, the taxpayer can file an appeal in Form GST APL-01 within 3 months from the date the order is communicated. Section 107 allows a further 1 month delay condonation if sufficient cause is shown.

Pre-deposit requirements should be checked based on the nature of the order and portal-generated liability. In demand-related appeals, Section 107 requires payment of admitted dues and 10% of remaining tax in dispute.

For appeal to GSTAT, Section 112 provides a 3-month appeal window from communication of the order, or the notified date if later. It also refers to additional pre-deposit for tax in dispute where applicable.

## **How to track GST refund status**

1.  Log in to the GST portal.
2.  Go to **Services > Refunds > Track Application Status**.
3.  Enter ARN or select the financial year.
4.  Check the latest status and download available orders or notices.

| Common Status | Meaning |
| --- | --- |
| ARN generated | Refund application has been filed. |
| Pending with officer | Application is under processing. |
| Acknowledgement issued | RFD-02 issued. |
| Deficiency memo issued | RFD-03 issued. Fresh filing is required. |
| Show cause notice issued | RFD-08 issued. Reply is required. |
| Refund sanctioned | RFD-06 issued allowing refund. |
| Payment order issued | RFD-05 issued. |
| Refund rejected | RFD-06 issued rejecting claim fully or partly. |
| Payment credited | Refund amount credited to bank account. |

## **Common GST refund mistakes to avoid**

1.  ### **Not matching your refund claim with your returns**

     Make sure the numbers in your refund application match your GSTR-1, GSTR-3B, shipping bills, books, and ledgers. If there are mismatches, your claim can get delayed or you might receive an RFD-03 notice.
2.  ### **Using the wrong formula for inverted duty refunds**

    Don’t use outdated or simplified formulas. Rule 89(5) has its own calculation method, and you shouldn’t include input service ITC in Net ITC for these refunds.
3.  ### **Including blocked ITC**

    Double-check that you’re not adding ITC that’s blocked under Section 17(5). If you do, your refund could be rejected or face extra scrutiny.
4.  ### **Assuming all refunds above ₹2 lakh need a CA certificate**

    Not every refund over ₹2 lakh needs a certificate from a CA or cost accountant. Rule 89 has clear exceptions, so only attach a certificate if the law or portal asks for it.
5.  ### **Forgetting FIRC/BRC for service exports**

    If you export services, you need to show proof that you got paid in foreign currency. Without this, the officer may doubt whether your export qualifies for a refund.
6.  ### **Not checking if your bank account is validated**

    Refunds only go to the eligible bank account listed on the portal. If there’s a name mismatch, inactive account, or the account isn’t validated, your refund could get stuck.
7.  ### **Ignoring RFD-08 notices**

    If you get a show cause notice (RFD-08), reply to each point with supporting documents. Clearly explain your refund category, calculations, and why you’re eligible.

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## **Conclusion**

GST refund is an important relief mechanism for taxpayers who have paid excess tax, accumulated [**eligible ITC**](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) , exported goods or services, supplied to SEZ units, or become entitled to refund through an order or appeal. However, the refund process is highly document-driven. A small mismatch between returns, invoices, ITC records, shipping bill details, bank account information, or refund statements can delay the claim or lead to a deficiency memo.

Before filing a refund application, taxpayers should identify the correct refund category, apply the right formula, check the applicable time limit, reconcile GST returns with books, and keep all supporting documents ready. Exporters should also verify LUT compliance, ICEGATE data, shipping bill details, and foreign currency realisation documents where applicable.

A well-prepared refund application reduces follow-ups with the department and improves the chances of faster processing. For businesses that regularly deal with exports, inverted duty structure, SEZ supplies, or excess ITC, using proper [**GST accounting**](https://busy.in/gst/the-role-of-gst-accounting-software-in-streamlining-business-operations/) and reconciliation practices can make the refund process much smoother and help avoid avoidable working capital blockage.

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## About the author

**Jagdish Prasad**

Jagdish Prasad is a Chartered Accountant with over 5 years of experience. He helps people and businesses with GST, income tax, and HSN codes. Jagdish makes sure his clients follow all tax rules and save money the right way. He also enjoys writing simple articles to help others understand taxes and stay updated with the latest rules.

## Frequently asked questions

### Is GST refund automatic?

Not always. IGST refund on export of goods is generally processed through the shipping bill route if GST and Customs data match. Other refunds, such as LUT exports, inverted duty structure, excess cash balance, SEZ supplies and order-based refunds, usually require Form GST RFD-01.

### Can I claim GST refund if some GST returns are pending?

In most registered-taxpayer refund cases, pending returns can block or delay filing and processing. File relevant GSTR-1, GSTR-3B and other applicable returns before applying.

### Is a CA certificate compulsory for every GST refund above ₹2 lakh?

No. This is a common misunderstanding. Rule 89 provides exceptions, including certain refunds under Section 54(8). The requirement depends on refund category and unjust enrichment applicability.

### What is unjust enrichment in GST refund?

Unjust enrichment means the claimant should not receive a refund if the tax burden was already passed on to another person. In such cases, the refund may be credited to the Consumer Welfare Fund unless the claim falls under an exception or the claimant proves that the tax incidence was not passed on.

### What happens after RFD-03 is issued?

RFD-03 is a deficiency memo. It does not work like a normal reply notice. You must correct the deficiencies and file a fresh refund application. The amount debited from the ledger while filing the earlier claim should be re-credited as per the applicable rules.

### What is the difference between RFD-03 and RFD-08?

RFD-03 means the application is incomplete or deficient and needs fresh filing. RFD-08 is a show cause notice where the officer proposes rejection or partial rejection. RFD-08 must be answered through RFD-09.

### Can an unregistered person claim GST refund?

Yes, but only in specific situations. CBIC has clarified refund filing for unregistered persons in cases such as cancelled construction contracts and terminated long-term insurance policies where GST was borne by the unregistered buyer and credit note route is unavailable.

### Can exporters claim refund without LUT?

Exporters can use the IGST payment route, but it blocks working capital until refund is processed. To export without payment of tax and claim accumulated ITC refund, LUT or bond compliance is required.

### Why is my export refund stuck on ICEGATE?

Common reasons include mismatch in shipping bill details, wrong port code, missing EGM/departure manifest, mismatch between GSTR-1 and shipping bill, invalid bank account, or IEC-GSTIN mapping issues.

### Can I withdraw a GST refund application?

Yes. RFD-01W allows withdrawal of a refund application before specified processing stages. On withdrawal, the amount debited from the electronic credit ledger or cash ledger is credited back as applicable.

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