GST Refund

GST Refund

An overview:

The introduction of GST is truly a game changer for Indian Economy as it has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology driven tax structure. Same way, with the concept of GST Refund, more people apply for GST registration to get the benefits of the excess input accumulated. It is very important to understand the GST Provisions related to the complete concept and process of refund. If anyone eligible for refund and wants to claim the same, then it should be applied before the expiry of the time period as time limit is mentioned in the GST provisions for claiming the refund. It facilitates trade through release of the blocked funds for Working capital, expansion, and modernization of businesses.

Time Limit for Claiming Refund

As per the GST Provisions, every claim for refund is to be filed within 2 years from the relevant date and following dates are recommended as relevant dates for different types of refund cases:


Situation of Refund

Relevant Date


On account of Export of Goods


a) If the goods exported by sea or air




b) If the goods are exported by land



c) If the goods are exported by Post



the date on which the ship or aircraft in which such goods are located leaves India



the date on which such goods pass the frontier




the date of despatch of goods by the Post Office concerned to a place outside India.



On account of Export of Services

the date of

i) Receipt of payment in convertible foreign exchange where the supply of services had been completed prior to the receipt of such payment or

ii) issue of invoices, where payment for the services had been received in advance prior to the date of issue of the invoice.


On account where the tax becomes refundable as a consequence of judgement, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court

the date of communication of such judgement, decree, order or direction


Surplus ITC due to Inverted Tax Structure

Due date of furnishing of return under Section 39 for the period in which such claim for refund arises.


On account of Tax is paid provisionally under this Act

the date of adjustment of tax after the final assessment


In any other Case

the date of Payment of Tax


To understand the refundable element of the GST we firstly need to know the situations which leads to refund. We hereby make a short crux chart in a very simple waycovering all the situations leading to refund along with the refundable element column so you can get all the information at one place:


Situation Leading to Refund

Refundable Element


Export Supplies- IGST Paid



Export Supplies- No IGST Paid and ITC availed

Unutilised ITC


Supplies to SEZ- IGST Paid



Supplies to SEZ- No IGST Paid and ITC availed

Unutilised ITC


Domestic Supplies- Having Inverted Tax Structure

Unutilised ITC


Supplies to UIN Holder (Special Entities)- GST Paid

GST Paid on Inward Supplies


Domestic Supplies


a) Intra State supply wrongly categorized as Inter-State supply-IGST paid wrongly


b) Inter State supply wrongly categorized as Intra-State supply- CGSTand SGST Paid wrongly


c) Supply- GST Paid but wrong rate applied


d) Double payment on single supply transaction – due to mistake or inadvertence


e) Advances received- GST Paid- But later on no supply was made


                                     IGST Paid



CGST and SGST Paid



GST Paid in excess


GST Paid in excess



GST Paid


Domestic Supplies- Assessee not able to determine applicable rate

a) Requested Provisional Assessment and paid @20%

b) But afterwards assessment finalised @10%



GST Paid in Excess



Domestic Supplies-GST Paid @12%

-Investigation Team came and assessee paid additional GST @16% during the investigation but later on at the time of finalization of Investigation np tax liability or less tax liability arises


GST Paid in Excess during the time of investigation




Domestic Supplies- GST Paid @12%

-Return is scrutinized by the department and Officer raised demand notice to pay differential duty @16%

-Assessee apply for appeal and pre-deposited the disputed dues

-Assessee win the appeal which leads to refund of pre-deposited amount


GST Pre-Deposited


GST Paid by International Tourist will be eligible to refund as per Section 15 of the IGST Act

GST Paid by Tourist

Thereby depending on the situations leading to refund, assesses will apply for following types of refund:


Refund of unutilizedInput Tax Credit (ITC):

As it can be seen from the table that this type of refund is admissible only in 2 cases.

i) First case is when *zero rated supplies*are made without payment of tax. Refund of ITC shall be granted as per the following formula

Refund Amount= Net ITC * (Turnover of Zero rated supply of goods+ Turnover of Zero  Rated supply of Services)

                                                           Adjusted Total Turnover

ii) Second case is when the supply have *Inverted Tax Structure*. Refund of ITC shall be granted as per the following formula

 Refund Amount= Net ITC * (Turnover of Inverted rated supply of Goods and  Services)

                                                           Adjusted Total Turnover

                             Less: Tax Payable on such inverted rated supply of goods or services.

Meaning of the terms:

Zero Rated Supply means any of the following supplies of goods or services or both namely:

  1. Export of Goods or Services or both, or
  2. Supply of Goods or Services or both to a Special Economic Zone Developer or a Special Economic Zone Unit.

 Inverted Tax Structure means where the credit has accumulated on account of rate of tax  on inputs being higher than the rate of tax on output supplies (Other than Nil rated or Fully Exempt Supplies)

However, no refund of unutilized ITC shall be allowed where the goods exported out of India are subjected to Export Duty.

Any person availing the option to supply goods or services for export without payment of IGST shall furnish prior to export a bond or a Letter of Undertaking in Form GST RFD-01 to the jurisdictional Commissioner binding himself for :

  1. If the goods are not exported out of India within three months or such further period as may be allowed by the Commissioner from the date of issue of invoice for export, then he will pay tax along with the interest u/s 50 within 15 days, or
  2. If the payment of such services is not received by the exporter in convertible foreign exchange within 1 year, or such further period as may be allowed by the commissioner from the date of issue of the invoice for export, then he will pay tax along with the interest u/s 50 within 15 days.

Refund of GST Paid:

Other than the above 2 cases, all other cases fall under this category where we shall apply for the refund of the GST Paid element. However, no separate application required to be applied in case of export of goods by the exporters. The shipping Bill/Bill of Land filed by an exporter of goods shall be deemed to be an application for refund of IGST paid on the goods exported out of India.

Benefits of GST

Release of Blocked Funds:

For making supply, every supplier also purchase the goods or take services in order to complete the outward supply. However, the supply and purchase may not occur at same point of time in same tax period. Due to which funds get blocked in the form of GST paid on the purchase and get credited in the electronic ledger. So by applying refund of the same, funds will be released to easily facilitate the trade.

Boost Export Business:

Export is qualified as a zero-rated supply under the GST provisions. Exporters will be eligible to take refund of the GST paid on the inward supplies by making the refund application thereby boosting the business of Export.

Excess Tax Paid:

If inadvertently or mistakenly, excess tax or wrong tax has been paid then you can take refund of the same by making application of refund.



Documents Required
  • Sale Invoices
  • Purchase Invoices (in case of Refund of ITC)
  • GST Returns for the refund period
  • Declaration and Undertakings
Details Required
  1. GST Login credentials

Process of Company Registration

COMPLIANCESPRO has a separate team which is expert in completing this complex process very easily and helps you to get the company registered within 3 daysonly in a very reasonable price.

Documents & Details required for company incorporation in very simple terms
Documents Required
  • Bank Statement
  • Electricity Bill
  • Telephone Bill
  • Mobile Bill
  • Passport
  • Driving License
  • Voter’s Identity Card
  •  Electricity Bill or
  • Telephone Bill
  • (Not older than 2 Month)
Details Required
  1. Company Name
  2. Company Email Id and Phone No
  3. Business Activity
  4. Directors Name
  5. Shareholders Name
  6. All Directors and Shareholders Details:
  • Email ID and Mobile Number
  • Place of Birth (District & State)
  • Nationality
  • Qualification
  • Current Employment: Salaried/ Businessman/ Other
  • Duration of Stay at Present Address
  • Capital Amount
financial accounting


  • GST Refund Acknowledgment

  • GST Refund Application

  • GST Refund