GST Refunds: Understand All Types & Turns

Since its implementation on 1st July 2017, the Goods and Services Tax (GST) has streamlined India’s complex indirect tax structure by subsuming multiple central and state levies into a single, unified system.

While tax compliance has become simpler for businesses, businesses still find it challenging to understand the refund mechanism. Taxpayers become eligible for a GST refund when they pay more tax than their actual liability—whether due to exports, excess payments, input tax credits (ITC), or special exemptions such as supplies to SEZs or international organizations. To ensure liquidity and encourage compliant trade practices, the government allows registered taxpayers to claim refunds under various specific scenarios outlined in the GST framework.

This blog delves into the types of GST refunds, eligibility criteria, required documentation, and timelines—so you can navigate the process with clarity and confidence.

Types of GST refunds

1. Refund of GST paid on exports

The Indian economy relies heavily on exports. The government has taken a number of steps to encourage exports. One such step is to provide a refund on the GST paid on goods or services provided. The manufacturer can claim a refund of GST on the inputs used to manufacture the exported goods. Exports include all types of zero-rated supplies, and done on LUT bond /concessional GST. We will understand the eligibility criteria and the documents you need to submit to the department for the Claim to claim the refund of GST paid on exports.

a. Eligibility Criteria:

• It is mandatory for the supplier to register under the new GST regime.
• The exporter exports the goods or services outside India within three months from the invoice date.
• The exporter files a shipping bill to export goods in accordance with the Customs Act of 1962.
• The supplier should have paid GST on the goods supplied.
• The supplier files GST returns for the relevant period.

b. Documents required for the Claim:

• Copy of export invoice.
• Copy of shipping bill filed with customs.
• Copy of Bill of Lading or the Airway bill.
• Copy of export declaration filed with customs.
• Bank Reconciliation Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC).
• Copy of GST returns (GSTR 3B) filed for the relevant periods.
• Any other document for the tax authority.
• A copy of Form GSTR-2A for the relevant period after the refund claim.

c. Time Limit to claim a refund:

You need to file refund claims within 2 years from the relevant date. Exporters are eligible for 90% provisional refund within 7 days of acknowledgment, with the balance processed after verification.

2. Refund of GST paid on supplies made to SEZ units

SEZ units are special economic zones that are designated areas set up separately by the government to promote exports and attract foreign investments. There are a total of 265 SEZs in India. These SEZs include Free Trade, Export Processing, and Free Economic zones. 64% of the major SEZs are in Maharashtra, Andhra Pradesh, Karnataka, Telangana and Tamil Nadu. If a supplier has supplied its goods or services to the registered SEZ units, he can claim the refund of tax paid on such supplies. He should fall within specified criteria for claiming tax, and the supplier must submit a few documents justifying the supply.

a. Eligibility Criteria:

• Registered under the new GST regime.
• The goods must be supplied to SEZ units or an SEZ developer.
• A tax invoice must be generated for the supply made to the SEZ unit.
• The supplier should have paid GST on the goods supplied.
• GST returns for the relevant period should have been filed.

b. Documents required for the Claim:

• Copy of tax invoice issued to the SEZ units.
• Copy of receipt of payment made by the SEZ unit.
• Copy of shipping bill or e-way bill.
• Bank Reconciliation Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC).
• Copy of GST returns (GSTR 3B) filed for the relevant periods.
• Any other document for the tax authority.
• Copy of Form GSTR-2A of the relevant period for which the refund claim is filed.
• Self-declaration relating to non-prosecution under rule 91(1) of the CGST Rules for availing provisional refund.

c. Time Limit to claim a refund:

Refund can be claimed within 2 years from the relevant date. Interest is payable by the government if a valid refund claim delays beyond 60 days from the date of filing a complete application.

3. Refund of GST paid on excess tax amount

The GST paid on the goods or services provided is accumulated in the e-cash ledger of your registered GST account. Pre-paid taxes or GST paid reflects on your GST portal account. In case of uncertainty in determining the value of tax or tax rate, sometimes the supplier pays the tax provisionally and later claims the excess tax refund in the final assessment. Any excess payment or GST paid by mistake can be claimed from the portal by submitting relevant documents.

All the balance of GST will be shown in the Electronic cash ledger from where you can claim the refund. Refunds of excess balance in the electronic cash ledger can be filed, while the GSTR 3B form is used for filing the yearly return.

a. Eligibility Criteria:

• In order to claim a refund, the taxpayer must have paid GST either an excessive amount or paid by mistake.
• GST returns for the relevant period should have been filed. 
• The taxpayer must not have claimed ITC for the excess GST paid. 

b. Documents required for Claim:

• Copy of tax invoice against excess GST.
• Copy of payment receipt for the excess tax paid.
• Any other document if required or asked by the tax authority.

c. Time Limit to Claim Refund:

You can claim the refund of GST on excess tax within 2 years from the relevant date.

4. Refund of GST paid on supplies made to UN bodies

UN bodies are the international organizations operating in India. They are exempted from paying GST on any purchases made. Along with UN bodies, consulates and Embassies are exempted from paying GST. The finance ministry states, “The sale or supply to UN bodies or foreign diplomats should be treated like any other business-to-consumer sale, and no additional effect should be reflected on the supplier’s tax liability”. The suppliers should add foreign diplomats to Unique Identity Number (UIN) records.

Hence as per the finance ministry, foreign and international bodies can also claim GST, and below mentioned are the eligibility criteria for the same:

a. Eligibility Criteria:

• The supplier must be a registered person under the new GST regime.
• Goods or services must be provided to a UN body.
• The supplier must have charged GST on the supply of goods or services to a UN body.
• The particular UN body exempted from paying GST.
• The taxpayer/supplier must not have claimed ITC for the excess GST paid. 

b. Documents Required for Claim:

• Copy of the tax invoice issued by the supplier.
• Copy of receipt of payment made by the UN body.
• Copy of purchase order issued by the UN body.
• Copy of filed shipping bill or bill of lading.
• Any other document if required or asked by the tax authority.

c. Time Limit to Claim Refund:

As per recent amendments, refunds must be filed within 2 years from the end of the quarter in which the supply was received (updated from the previous 6-month rule).

5. Refund of unutilized ITC on account of export:

Input Tax Credit is the balance of tax paid on sales over purchases. If there is an excess of tax, it is accumulated in the electronic cash ledger. One can claim a refund of ITC if a business practices an inverted tax structure, exported goods without tax payment under a Letter of Understanding (LUT) or Bond, supplies are made to an SEZ unit without paying tax and goods or services are provided to foreign embassies or international organizations. 

a. Eligibility Criteria:

• Registration of supplier under the new GST regime.
• Goods or services must be provided to any SEZ unit or foreign embassy under a LUT bond.
• The supplier must have charged GST on the supply of goods or services.
• Exemption applies on particular SEZ unit/UN body from paying GST.
• The taxpayer/supplier must not have claimed ITC for the excess GST paid. 

b. Documents required for Claim:

• Copy of tax invoice issued by the supplier.
• Copy of signed letter of undertaking in case of export under LUT terms.
• Copy of receipt of payment made.
• Copy of filed shipping bill from customs.
• Copy of Bill of Lading or the Airway bill
• Copy of export declaration filed with customs
• Bank Reconciliation Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC).
• Copy of GST returns (GSTR 3B) filed for the relevant periods.
• Copy of Form GSTR-2A of the relevant period for which you filed refund claim.
• Any other document for the tax authority.

c. Time Limit to Claim Refund:

You must file the refund within 2 years from the relevant date.

6. Refund for “any other” ground or reason:

When none of the earlier categories apply, the taxpayer claims a refund under the “any other” reason.

a. Eligibility Criteria:

• Refund on excess tax paid.
• Refund on taxes paid on provisional assessment. (If the supplier does not know the accurate GST rate, they pay a higher tax amount provisionally and then claim a refund.)
• Refund of tax paid on an intra-state supply which was an inter-state supply or vice-versa.
• A refund based on “any other” grounds.

b. Documents required to claim a refund:

• Copy of tax invoice against which led to the payment of excess.
• Copy of payment receipt for the excess tax paid.
• Copy of GST returns (GSTR 3B) filed for the relevant periods.
• Any other document that the tax authority requests.

c. Time Limit to Claim Refund:

One should file refund claims under “any other” grounds within 2 years from the relevant date. Some High Court rulings have treated the 2-year limitation period as directory, not mandatory, allowing refunds in exceptional cases.

Conclusion

The GST refund mechanism requires precision, timely filing, and accurate documentation. With recent updates around timelines, interest on delays, minimum refund limits, and compliance requirements, businesses must stay informed to avoid loss of legitimate claims.

Any claim on false grounds is subject to penalties, and in severe cases leads to prosecution.

Frequently Asked Questions

Q1. Which form you can use to file a refund claim?
You can file refunds in Form GST RFD-01 via the GST portal.

Q2. Can I file a refund for multiple tax periods in one application?
Yes, you can file nil refund applications for multiple tax periods together.

Q3. What is the minimum refund amount you can process?
You can only process refunds above ₹1,000 as per current rules.

Q4. Can I claim unutilized ITC refund after availing IGST refund or duty drawback?
No. If you claim a refund on IGST refund or duty drawback, you cannot claim ITC refund on the same goods or services.

Q5. How do I apply for a refund on the GST portal?

1. Login to https://www.gst.gov.in
2. Go to: Services → Refunds → Application for Refund
3. Select type and tax period
4. Fill Form GST RFD-01
5. Upload required documents
6. Accept undertaking & declaration
7. Select authorized signatory and submit

After submission, an Application Reference Number (ARN) provided to you can help track your refund status.