GST Refunds
Refund claims for exports, inverted duty structures and excess cash balance, prepared and followed up.
Who needs it
Exporters, businesses with high input tax, and anyone with excess balance in the cash ledger.
GST refunds are where many businesses have money tied up: exporters with credit built up on supplies under a letter of undertaking, manufacturers whose input tax rate is higher than their output rate, and businesses that paid tax twice or under the wrong head. A refund is not automatic after filing. It needs the right category, clean data and a quick answer to any deficiency memo. We prepare and file refund claims under section 54 of the CGST Act and follow them through to credit in your bank account.
When refunds arise
- Exports of goods or services: exports are zero-rated. You can export on payment of IGST and claim it back, or export under LUT without tax and claim refund of the unused credit.
- Inverted duty structure: where the tax rate on inputs is higher than on outputs, leaving credit you cannot use.
- Excess balance in the cash ledger: overpayment, payment under the wrong head or duplicate payment.
- Supplies to SEZ units and deemed exports.
- Refunds following an appeal or court order.
- Tax paid on a supply later held to be inter-state instead of intra-state, or the reverse.
All refunds are claimed in Form RFD-01, but the statement, documents and calculation differ by category.
Refund categories
| Category | Provision | How it is processed |
|---|---|---|
| Export under LUT (unused credit) | Section 54(3)(i), rule 89(4) | RFD-01; 90% provisional refund available |
| Export of goods with IGST paid | Rule 96 | Automatic through customs, based on the shipping bill and GSTR-1 / 3B |
| Inverted duty structure | Section 54(3)(ii), rule 89(5) | RFD-01; provisional refund has been extended to these claims by recent amendments, and we confirm the current position when filing |
| Excess cash ledger balance | Section 54(1) | RFD-01; standard 60-day processing |
| After an appeal or order | Section 54 with the order | RFD-01; interest at 9% if paid late |
The filing process
Before filing, GSTR-1 and GSTR-3B for the claim period must be filed and your bank account validated on the portal.
- Choose the right category in RFD-01. A wrong category usually leads to rejection rather than correction.
- Prepare the statement: Statement 3 for exports of goods without tax, Statement 1A and the invoice-wise annexure for inverted duty, along with invoices, shipping bills and, for services, bank realisation certificates or FIRCs.
- Certificate: a chartered accountant's certificate that the tax burden has not been passed on, for claims above ₹2 lakh (a self-declaration below that).
- Submit with DSC or EVC and receive an ARN for tracking.
- Acknowledgement or deficiency: the officer issues an acknowledgement (RFD-02) or a deficiency memo (RFD-03) within 15 days. A deficiency memo means a fresh application must be filed.
- Provisional refund: where available, 90% is sanctioned in RFD-04 within seven days of the acknowledgement.
- Final order: the refund is sanctioned in RFD-06, and paid to your bank account.
Timelines
| Stage | Time |
|---|---|
| Acknowledgement or deficiency memo | Within 15 days of filing |
| Provisional refund (where applicable) | Within 7 days of acknowledgement |
| Final order | Within 60 days of the complete application |
| Interest on delayed refund | 6% a year after 60 days; 9% where the refund follows an appellate order |
| Time limit to apply | Two years from the relevant date: for exports, the date of export (or of receipt of payment for services); for inverted duty, the due date of the return for the period of the claim |
A claim filed after two years is lost.
Why claims get stuck
- Wrong category selected
- Returns for the period not filed
- Shipping bill and invoice details that don't match, or credit figures that don't match GSTR-2B
- Ineligible credit in an inverted duty claim: credit on input services and capital goods is excluded under rule 89(5)
- Missing chartered accountant's certificate for claims above ₹2 lakh
After a deficiency memo, the amount is re-credited to your ledger and a corrected claim must be filed afresh, which restarts the clock and delays the refund by a month or more.
Choosing a refund adviser
- Are GSTR-1, shipping bills and GSTR-2B reconciled before filing?
- Can the statements and annexures be prepared accurately in-house?
- Can the chartered accountant's certificate be issued?
- How quickly are deficiency memos answered?
- Is the refund tracked until the money arrives, not just until filing?
How we help
We check eligibility and the right category, calculate the amount under the correct formula, confirm that returns are filed, prepare the statements and certificate, file the claim and deal with the officer until the refund is credited. For regular exporters and manufacturers with recurring inverted duty, a monthly or quarterly arrangement catches reconciliation issues before they reach the claim.
Common questions
How long does a refund take?
The final order is due within 60 days of a complete application. Where provisional refund applies, 90% can arrive within about a week of acknowledgement.
What happens after a deficiency memo?
The application is treated as not filed, the amount goes back to your ledger, and a corrected application must be filed afresh.
Can credit on input services be included in an inverted duty refund?
No. Only credit on inputs (goods) counts; input services and capital goods are excluded.
Can a refund be claimed before returns are filed?
No. Returns for the period must be filed first, and the portal checks this.
Documents to keep ready
- GSTR-1 and GSTR-3B for the claim period
- Export invoices, shipping bills and LUT
- Bank realisation certificates or FIRCs for export of services
- GSTR-2B and purchase register for inverted duty claims
- Chartered accountant's certificate for claims above ₹2 lakh
- Bank account details validated on the portal