How to Claim Refund Under GST in India?


November 1, 2019

GST Claim

Are you going to claim GST Refund in India? You have come to the right place. In this post, you can read complete information about who can claim refund in GST, process to claim refund and What is a refund if delayed.


What is Tax Refund?

A Tax Refund is meant for the refund of any kind of amount that is due to the taxpayer from the IT Department. There are some special cases in which refund is allowed and the taxpayer can claim refund only in the mentioned conditions.

Only in cases like extra tax payment, unutilized input tax credit on account of output supplies being exports, tax rate on inputs higher than the rate of tax on outputs, etc.

Recommended: What is igst cgst  and sgst?

Who Can Claim Refund in GST?

The refund of tax paid under GST is allowed in the following situations:

  • Tax paid on supplies of zero-rated goods and/or services or tax paid on input supplies used in making such zero-rated items.
  • Tax paid on export supplies and/or tax paid on input supplies used in making goods/services that are exported.
  • Refund of unutilized ITC when the input tax amount (and the input credit) is higher than the output tax liability.
  • Refund of unutilized ITC when the output supplies are zero-rated.
  • Refund of tax paid on supplies which were already delivered partially or fully but the invoice had not been issued
  • Refund of tax paid due to a mistake or confusion on the type of transaction.
  • Refund dues after the final provisional assessment.
  • Refund of the fee deposited by a taxpayer when filing an appeal and when the decision is made in favour of the applicant.
  • Refund of excess tax/duty as found after the finalization of a tax investigation.
  • Refund of tax paid on purchases made by UN bodies or Embassies.
  • Incentives provided by the supplier in form of credit notes.
  • Tax refund as applicable for international tourists.

RecommendedAdvance Receipt and Refund Voucher Format Under GST

Process to claim Refund under GST

If you have to claim a refund of tax, penalty, interest or ITC based on any of the above situations, you can follow the procedure below. A taxpayer can also claim his/her tax refunds/ITC when filing the monthly tax returns.

  1. The user will have to file the application FORM GST RFD-01 for refund claim on the GSTN portal.
  2. After the application is submitted, an acknowledgement in FORM GST RFD-02 will be generated with a unique number.
  3. The proper officer will check the application and will communicate the deficiencies in FORM GST RFD-03.
  4. The applicant shall be granted the provisional refund.
  5. The application and supporting documents submitted by the claimant will be scrutinized by the concerned officer for validity. Upon successful verification, the officer shall pass an order in FORM GST RFD-04 provisionally ordering the refund of tax as requested by the application. This will be done within seven days from the date of application/acknowledgement.
  6. After the process is completed, the payment advice shall be issued in FORM GST RFD-05 and the refund amount shall be deposited to the application’s bank account.
  7. Adjustments would be made to electronic cash and credit ledgers of the applicant and return and to reduce the ITC liability.
  8. The application will also be examined for the unjust claims, and if it doesn’t pass, then the refund amount will be deposited to the government’s consumer welfare fund.
  9. If the refund claim is higher than the predetermined refund eligibility, then a pre-audit process will be held to determine the correct refund amount.

Download GST Refund Rules in PDF

Note: Tax refund application can only be filed at the end of a quarter.
The minimum refund amount should be Rs. 1000 for a successful claim.

Read Also: Refund Can Now Be Claimed Online On Excess GST

What is a Refund if delayed?

It is very important for businesses to get tax refunds and ITC on time to be able to maintain a continuous capital flow. A refund application will be normally processed within 7 days of the claim. If it takes more than 2 weeks to process the application, the claimant is likely to be paid an interest on the refund amount at a fixed rate, however, the final rate has not been fixed yet.

Note: Camp facility will be driven from 15th March to 31st March 2018 to clear GST refund claims for exporters.


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