GST refunds

What this covers

Preparing and pursuing GST refund claims — unutilised input tax credit on zero-rated exports, IGST paid on exports, refunds arising from an inverted duty structure, and excess balance in the electronic cash ledger. It also covers responding to deficiency memos and appealing a rejection.

Statutory basis

Section 54 of the Central Goods and Services Tax Act, 2017, read with Rules 89 to 96 of the CGST Rules, 2017. Zero-rated supplies are governed by section 16 of the Integrated Goods and Services Tax Act, 2017, and the Letter of Undertaking route by Rule 96A.

Who it applies to

Exporters of goods and services, suppliers to SEZ units and developers, businesses whose inputs are taxed at a higher rate than their outputs, and any registered person carrying an excess cash balance. Deemed-export suppliers can claim under their own route.

What we do

1. 1Establish which refund category applies, because the formula and the documentation differ for each.
2. 2Confirm the LUT is in force for the year, or that IGST was paid where the claim is on that basis.
3. 3Reconcile export invoices with shipping bills and bank realisation, since a mismatch here is the most common cause of rejection.
4. 4Compute the eligible amount under the Rule 89(4) or 89(5) formula and identify credit that must be excluded.
5. 5File the application in Form RFD-01 with the statements and declarations the category requires.
6. 6Answer any deficiency memo inside the time allowed, and pursue the claim with the officer through to the sanction order.

What you receive

Application filed

Form RFD-01 with the supporting statements and the ARN.

Computation

A working showing the formula applied and every figure traced to a record.

Correspondence

Replies to deficiency memos and notices, and the sanction order when it issues.

Documents and information required

Export invoices and shipping bills · bank realisation certificates or FIRCs · LUT acknowledgement · GSTR-1, 3B and 2B for the claim period · purchase invoices supporting the credit · a statement of turnover, adjusted total turnover and net ITC · cancelled cheque and bank details as registered · undertaking that the incidence has not been passed on.

Key dates

A refund application must ordinarily be made within two years of the relevant date defined in section 54, and the relevant date is not the same for every category. Where a claim is time-sensitive we work back from that date rather than from the year end.