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Step-by-Step Guide to GST Refund Claims

Updated on:  

08 min read

The GST refund process requires the taxpayer to follow elaborate steps, submit documents and declaration if required, to the GST authorities for claiming a GST refund. The refunds under GST can be the cash balance in the electronic cash ledger deposited in excess or tax paid by mistake or the accumulated Input Tax Credit (ITC) unable to be utilised for tax payments due to zero-rated sales or inverted tax structure. 

The forms in which a GST refund is claimed varies according to the type of GST refund being claimed. For instance, the refund of IGST in exports (with tax payment) can be claimed by only reporting details in the GSTR-1 and GSTR-3B. Whereas the refund of cash paid in excess of the electronic cash ledger can be claimed by applying in form RFD-01. Therefore, the steps or the process differs with the type of GST refund. 

Latest Updates on GST Refund

1st May 2021
Where the time limit to pass orders for rejecting any refund claim fully or partly falls between 15th April 2021 and 30th May 2021, it is extended. The extended time limit shall be later of two dates:
(1) 15 days after reply to notice OR
(2) 31st May 2021

27th June 2020
A full or part of the amount applied for refund may have been rejected via a notice issued by the authority. After completing the due proceedings, a final order must be issued within 60 days from the date of receipt of the refund application.

In case this time limit is expiring between 20th March to 30th August 2020, the last date to issue order shall be extended to the later of following dates:
1. 15 days from the date of receiving a reply from the applicant towards the notice, or
2. 31st August 2020

3rd April 2020
The time limit for completion or compliance has been extended to 30th June 2020, where the time limit/time limit/ date of expiry falls between the period from 20th March 2020 to 29th June 2020. It includes cases where the time limit to apply for GST refund in RFD-01 expires between 20th March 2020 and 29th June 2020.


Steps to submit a refund pre-application form

Refund pre-application is a form that taxpayers must fill out to offer information about their business, Aadhaar number, income tax details, export data, expenditure and investment, and so on. Taxpayers must file this pre-application form for all types of GST refund. This form need not be signed and cannot be edited once submitted. Hence, the user must be careful while entering the details.

The two steps involved in filing the GST refund pre-application form are as follows:

Step 1: Log in to the GST portal, go to the ‘Services’ tab, click on ‘Refunds’ and select the ‘Refund pre-application form’ option.

gst refund process

Step 2: On the page displayed called ‘Refund pre-application form’, fill in the details asked, and click on ‘Submit’. A confirmation of submission will be displayed on the screen.

The following details must be reported:

  • Nature of business – Manufacturer, merchant exporter, trader, and service provider
  • Date of issue of IEC (only for exporters) – Those applying for a refund on account of exports (without payment of tax) must furnish the date of issue of the Import Export Certificate.
  • Aadhaar number of the primary authorised signatory is mandatory.
  • Value of exports made in the FY 2019-2020 (only for exporters) – This must be computed at the GSTIN level and not PAN level.
  • Income tax paid in FY 2018-2019. 
  • Advance tax paid in FY 2019-2020. 
  • Capital expenditure and investment made in FY 2018-2019.
gst refund process

Refund process of IGST paid on export of goods (with tax payment)

Exports are considered as ‘Zero-rated supplies’ under GST. Hence, the tax paid (IGST and cess, if any) is eligible for a refund by the exporter. Since the quantum of transactions can be huge in exporters, the GST portal facilitates a simpler process of GST refund. No separate application in form RFD-01 is required in this case. Certain conditions must be satisfied by the exporter for a GST refund.

Firstly, Table 6A in GSTR-1 must be filled up with Shipping bill details related to export transactions (with payment of tax) and filed by the due date. Secondly, the summary details must be reported in item 3.1 (b) of Table 3.1 of GSTR-3B, the corresponding tax must be paid, and the return should be filed by the due date prescribed by GST law. 

In the export invoice data provided under Table 6A of Form GSTR-1, the correct and complete shipping bill number, shipping bill date, and port code details must be provided. It should be noted that export transactions carried out in a tax period must be filed in the GSTR-1 and GSTR-3B of the same relevant tax period. Care must be taken to report the total of IGST and cess as a figure equal to or higher in Table 3.1 of GSTR-3B than Table 6A and Table 6B of GSTR-1.

The GST authority considers the shipping bill as a refund application. The GST portal sends export details to the ICEGATE as disclosed on GSTR-1. Also, a confirmation that GSTR-3B was filed for the relevant tax period is sent. The Customs system compares the information on GSTR-1 to the information on their shipping bill and Export General Manifest (EGM) and then processes the refund.

The ICEGATE system will share payment information with the GST portal once the refund payment has been credited to the taxpayers’ accounts. The GST portal will share the information with the taxpayers by SMS and e-mail.

Steps to apply in form RFD-01 for most types of GST refund

RFD-01 must be filed for the following types of GST refund claims:

  • Excess cash balance from the electronic cash ledger or excess tax payment.
  • IGST paid on export of services (with payment of tax).
  • Accumulated ITC due to exports of goods and services without payment of tax.
  • Accumulated ITC due to supplies made to SEZ unit/SEZ developer (without payment of tax).
  • ITC accumulated due to inverted tax structure (tax on inputs higher than a tax on outputs).
  • If a recipient of deemed exports has paid the tax on inward supplies that qualify as deemed exports and has claimed ITC for the tax paid in their electronic credit ledger, the recipient of these deemed exports is eligible for a refund of the tax amount paid (on a condition that the supplier of such deemed exports does not claim a refund).
  • Tax paid on supplies made to SEZ units/SEZ developers (with payment of tax).
  • Tax paid on an intrastate supply later held as interstate supply and vice versa.
  • If a supplier of deemed exports paid tax on deemed supplies without charging and collecting tax from the buyer of deemed exports, then he would be eligible to claim it as a refund (on a declaration that the recipient or buyer of such deemed exports does not claim a refund).
  • On account of Assessment or Provisional Assessment or Appeal or any other order.
  • There is also a provision for claiming a refund on ‘Any other ground’ in RFD-01.

Care must be taken to declare consistent information of the invoices in both GSTR-1, where it applies, and RFD-01. A certificate by a chartered accountant/cost accountant needs to be submitted along in certain cases.

Follow the below steps to file a refund application in RFD-01:
Step 1: Log in to the GST portal and go to the ‘Services’ tab, click on ‘Refunds’ and select the ‘Application of refund’ option.

gst refund process

Step 2: In the page that appears, select the reason for refund or the type of refund and click on ‘Create refund application’.

gst refund process

Step 3: Select the period for which a refund is to be applied and select ‘Yes’ or ‘No’ on the dialogue box- ‘If you want to file a nil refund’. 

gst refund process
gst refund process

In case of nil refund application, the taxpayer can checkmark the declaration and proceed to file using either DSC or EVC.

This step is not applicable in types of refunds such as excess cash balance in the ledger, intrastate supply later held as interstate supply and vice versa, assessment or provisional assessment or appeal or any other order.

Step 4: Enter the details on the relevant page that gets displayed, based on the type of refund selected in the previous step. 

Type 1: Excess cash balance in electronic cash ledger

Enter the amount of cash to be claimed as a refund.

gst refund process
gst refund process

Type 2: Excess tax paid through GSTR-3B

Enter details of the GSTR-3B in which such tax payment was done in cash.

gst refund process

Type 3: Accumulated ITC due to exports of goods and services without payment of tax

Download Statement 3 and enter the details of export invoice documents on which refund is claimed. 

gst refund process

Generate the JSON file and upload it on the GST portal. Validate errors, if any.

gst refund process
gst refund process

In the column, ‘Computation of Refund to be claimed Statement-3A [rule 89(4)]’, enter aggregate turnover, adjusted total turnover and net input tax credit.

gst refund process

Validations take place to compute the maximum amount of refund that the taxpayer is eligible for.

gst refund process

Type 4: Accumulated ITC due to supplies made to SEZ unit/SEZ developer (without payment of tax)

There is a prerequisite that GSTR-1 and GSTR-3B of the selected period must be filed. The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 5. A CSV file can be uploaded instead of JSON.

gst refund process

Type 5: ITC accumulated due to inverted tax structure 

Inverted tax structure means the tax rate and amount paid on inputs are higher than the outputs. The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 1A. Thereafter, enter details such as turnover of inverted rated supply, tax payable, adjusted total turnover and net input tax credit.

gst refund process

Type 6: Refund by the recipient of deemed exports

The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 5B. Thereafter, enter details such as net input tax credit of deemed exports and the refund to be claimed.

gst refund process

Type 7: Tax paid on supplies made to SEZ unit/SEZ developer (with payment of tax)

The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 4. The refund amount will get auto-populated based on the statement uploaded.

gst refund process

Type 8: Tax paid on an intrastate supply later held as interstate supply and vice versa

The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 6. The refund amount will get auto-populated based on the statement uploaded.

gst refund process

Type 9: Refund by the supplier of deemed exports

The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 5B. The refund amount will get auto-populated based on the statement uploaded.

gst refund process

Type 10: Refund of IGST paid on export of services (with tax payment)

The steps remain the same as the ones laid down for the Type 3 refund given above. However, the statement will be Statement 2. The refund amount will get auto-populated based on the statement uploaded.

gst refund process

Type 11: On account of assessment or provisional assessment or appeal or any other order

Make the selection of the type of order and enter details of the same, as per the screenshot given below.

gst refund process
GST refund process

Type 12: Refund on ‘any other ground’

Reasons could be excess interest paid via GSTR-3B. Mention the reason for refund specifically in 200 characters along with the amount.

GST refund process

Step 5: Enter bank account details for the refund, upload the supporting documents and declaration, in refund types that mandate it. 

Up to 10 supporting documents can be uploaded, with file size limited to 5 MB each.

Preview the application and click on ‘Save’. The saved application remains for 15 days for the taxpayer’s action. Click on the ‘Proceed’ button after checking the boxes against undertaking and self-declaration.

gst refund process
gst refund process
gst refund process

Step 6: File RFD-01 using EVC or DSC.

gst refund process

Application reference number or ARN gets generated and displayed on the screen. Taxpayers can track using this number. The ARN is also sent to the email address and mobile number.

gst refund process

The refund application is thereafter assigned to the refund processing officer. It will be processed, and the refund status gets updated.

gst refund process

GST refund process for embassies and international organisations

There are two ways in which refunds can be claimed:

  • Use GSTR-11  to generate a refund application in form RFD-10.
  • Obtain the RFD-10 form on the dashboard after logging into the GST portal.

In the first case, go to GSTR-11 already filed by selecting the tax period/quarter. Click on the ‘Generate RFD-10’ button.

gst refund process

Select the embassy or organisation radio button and click on the ‘Create’ button. Table ‘Details of the tax paid on purchases as reported under GSTR-11’ will have amounts as auto-populated from the return of the respective period, editable as well.

gst refund process
gst refund process
gst refund process

Preview and submit using DSC or EVC.

gst refund process

In the second case, on the dashboard after logging in to the GST portal, go to the services tab and select refunds. Thereafter, choose the ‘Application for refund’ option. 

gst refund process

On the page that gets displayed, choose ‘Embassy/International Organisation’ as the option and click on ‘Create’.

gst refund process

The details of tax paid eligible for refund get auto-populated from GSTR-11, already filed.

Verify and edit or enter the refund amount.

gst refund process

The rest of the steps remain the same as the first case.

What happens after the GST refund is applied?

The application filed by a refund applicant or taxpayer will appear on the dashboard of the tax officer or refund processing officer as a pending work item. He or she will verify and scrutinise the application along with the documents.

Filed applications can be tracked using the “Track Application Status” under Refunds. After inspection by a GST authorities refund amount will be credited to the applicant bank account. 

Following will be the officer’s actions:

  • Provisional refund can be granted in form RFD-04 for certain types of refunds. It is to be issued within seven7 days from the acknowledgement date with at least 90% of the amount of the refund claimed granted.
  • Acknowledgement in form RFD-02 is issued within 15 days from filing the refund of the application if it is complete in all aspects.
  • There is an option introduced to withdraw the application of refund by the applicant in form RFD-01W. Once the withdrawal application is submitted, the refund, which was debited to the taxpayer’s electronic credit or cash ledger upon the filing of the refund application, will be credited to the respective ledger.
  • Otherwise, a deficiency memo in form RFD-03 can be issued by the officer within the same time limit to rectify any deficiencies by the applicant. At this point, an auto re-credit of the amount of refund claimed in the electronic cash/ credit ledger will happen if the ledger had been debited at the time of filing the refund. A fresh application must be submitted in such cases.
  • Notice to seek clarification in form RFD-08 can be issued by the officer for rejecting the application or recovery of refund granted by mistake. In such cases, the applicant must reply to it within 15 days in form RFD-09.
  • A sanction or rejection order shall be passed by the officer in form RFD-06. Following this, in cases of sanction, a payment order in form RFD-05 is passed. Alternatively, RFD-05 is sometimes issued after RFD-04.
  • In certain cases, the officer may pass an order for withholding refund sanctioned in form RFD-07 (part-B). Here, RFD-05 is never issued.
  • Order to re-credit the refund from the taxpayer’s electronic cash or credit ledger in cases of rejection or when the provisional refund was granted in form PMT-03.

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