GST Refund

A GST Refund refers to the process by which a taxpayer can claim a return of excess tax paid or unutilized input tax credit (ITC) under the Goods and Services Tax (GST) regime in India. The system is designed to avoid tax cascading and ensure smooth cash flow for businesses.

Timely refund processing is crucial for exporters, SEZ units, inverted duty structure claimants, and businesses that pay excess tax or make incorrect payments.

 Who Can Claim a GST Refund?

• Exporters (of goods or services)

• Suppliers to SEZ Units/Developers

• Businesses under Inverted Duty Structure

• Taxpayers who have paid excess GST

• Year-end adjustments or cancellations

• Finalization of provisional assessments

 Legal Basis

Refunds under GST are governed by:

• Section 54 of the CGST Act, 2017

• Rule 89 to Rule 97A of the CGST Rules

• Circulars and notifications issued by CBIC

 Objective

The goal of the GST refund mechanism is to:

• Prevent accumulation of taxes

• Support working capital efficiency

• Promote export competitiveness

• Encourage compliance and transparency

Who Is Eligible for a GST Refund?

Under the GST regime, the following taxpayers and entities are eligible to claim a refund for excess tax paid or unutilized Input Tax Credit (ITC):

 Exporters of Goods or Services

• Without payment of tax (under LUT) – can claim refund of unutilized ITC

• With payment of tax – can claim refund of IGST paid on exports

 Suppliers to SEZ Units or Developers

• Eligible for refund of tax paid on supplies to SEZs, either by the supplier or the SEZ unit

 Inverted Duty Structure Claimants

• When the tax rate on inputs is higher than the output, leading to unutilized ITC

• Can apply for refund of accumulated ITC (excluding certain restricted goods/services)

 Taxpayers Who Paid Excess Tax

• Due to wrong classification, incorrect invoice entry, or human error

• Refund of excess GST paid under CGST/SGST/IGST

 Finalization of Provisional Assessments

• When provisional assessments are finalized and result in excess tax payment

 Deemed Exports

• Suppliers of deemed exports (like supplies to EOU, EPCG units) can claim refund of taxes paid

 Canceled Registrations

• After filing final return (GSTR-10), taxpayers can claim balance in electronic cash ledger

 Year-End Adjustments or Credit Notes

• Where tax was paid but services/goods were not supplied or partially supplied

​​​​​​​Documents Required for GST Refund Application

The exact documentation may vary depending on the type of refund claimed, but generally, the following documents are required:

 1. GST Refund Application – Form GST RFD-01

This is the official refund form submitted online on the GST portal.

 2. Copy of GSTR-1 and GSTR-3B

For the relevant tax period – to verify the outward supplies and tax payment.

 3. Export/Shipping Documents (For Exporters)

• Shipping Bill / Bill of Lading / Airway Bill

• Export Invoices

• Bank Realization Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC) (for services)

 4. Declaration under Rule 89(2)(l) and (m)

Declaration that the incidence of tax has not been passed to any other person (for non-export refunds).

 5. Statement of Invoices

A detailed statement of invoices related to the refund claim (in the prescribed format).

 6. CA Certificate (if applicable)

Required when the refund amount exceeds ₹2 lakhs, certifying that the incidence of tax has not been passed on.

 7. Proof of Payment of Tax

If the refund is due to excess tax paid or wrong tax category (e.g., CGST/SGST instead of IGST).

 8. Undertaking of Non-Prosecution

If the refund exceeds ₹2 lakh, a declaration stating the applicant has not been prosecuted under any tax law.

 9. Any Other Supporting Documents

Depending on the case, you may need to submit:

• LUT (Letter of Undertaking)

• SEZ endorsement

• Debit/credit notes

• Ledger summaries

​​​​​​​Essentials of GST Refund

Understanding the core requirements and principles of GST refunds ensures timely and hassle-free claim processing. Below are the key essentials every taxpayer must be aware of:

 1. Eligibility Criteria

Refund is applicable in situations such as:

• Export of goods/services (with or without payment of tax)

• Supplies to SEZ

• Inverted duty structure

• Excess tax paid

• Deemed exports

• Finalization of provisional assessments

• Mistaken tax payments

 2. Timely Application

• Refund applications must be filed within 2 years from the relevant date as specified in Section 54 of the CGST Act.

• Delay beyond this period leads to automatic rejection.

 3. Use of Form GST RFD-01

• The standard refund application form to be filed online through the GST portal.

• Must be accompanied by relevant annexures and declarations.

 4. Correct Documentation

• Submitting complete and accurate documents is crucial.

• Key documents include invoice copies, shipping bills, BRC/FIRC, CA certificate (if refund > ₹2 lakh), and GSTR returns.

 5. Proper Classification of Refund Type

• Whether it’s due to exports, ITC accumulation, wrong tax payment, or SEZ supplies, each refund category requires different data points and documentation.

 6. Matching in GSTR-1 and GSTR-3B

• Refund will only be granted if the claimed data matches with GSTR-1 and GSTR-3B filings.

• Any mismatch can delay or deny the refund.

 7. Electronic Credit & Cash Ledgers

• Refund of accumulated ITC is processed from the electronic credit ledger.

• Refund of excess tax is processed from the electronic cash ledger.

 8. Declaration of Unjust Enrichment

• For most refunds (except exports), a declaration or CA certificate is required to establish that the burden of tax has not been passed on to another person.

 9. Refund Sanction Time Limit

• As per law, refund must be processed within 60 days from the date of receipt of a complete application.

• Delay beyond this period may result in interest payment by the department.

 10. Rejection and Appeals

• If a refund is rejected (fully or partially), the taxpayer can file a reply, rectification, or appeal against the order.

​​​​​​​Process of Filing GST Refund in India

Step 1: Identify Refund Eligibility

• Confirm the type of refund you want to claim (exports, excess tax, inverted duty, supplies to SEZ, etc.).

Step 2: Gather Required Documents

• Collect invoices, shipping bills, bank realization certificates, GSTR returns, CA certificate (if applicable), and any other supporting documents.

Step 3: Login to GST Portal

• Visit www.gst.gov.in

• Login using your GSTIN and password.

Step 4: Navigate to Refund Application

• Go to Services > Refunds > Application for Refund

• Select the appropriate Refund Type and Financial Year/Tax Period.

Step 5: Fill Form GST RFD-01

• Enter details of refund claimed, reasons, amount, and relevant tax period.

• Upload all required documents in prescribed format (PDF, size limits).

Step 6: Submit Declaration

• Provide self-declaration or CA certificate (if refund amount > ₹2 lakhs).

• Declare that the tax incidence has not been passed on (if applicable).

Step 7: Submit Refund Application

• Review all entered details carefully.

• Submit the application on the GST portal.

Step 8: Acknowledgment Receipt

• Upon successful submission, an ARN (Application Reference Number) will be generated.

• Save this ARN for future tracking.

Step 9: Verification by Tax Authorities

• The GST department reviews the application and documents.

• They may ask for additional information or clarification.

Step 10: Refund Sanction & Payment

• If approved, the refund amount is credited to your bank account within 60 days of application receipt.

• In case of delay, interest may be payable by the government.

Step 11: Track Refund Status

• Use the ARN on the GST portal to track refund status under Services > Refunds > Track Application Status.

​​​​​​​Why Choose YKG GLOBAL for GST Refund?

Claiming a GST refund can be complex and time-sensitive. At YKG GLOBAL, we simplify the process and help you get your refund quickly and hassle-free with our expert guidance.

1. Experienced GST Professionals

Our team of tax experts and legal advisors has in-depth knowledge of GST laws and refund procedures to ensure your claim is accurate and complete.

2. End-to-End Support

From documentation, filing the refund application, to follow-up with tax authorities, we manage the entire refund process on your behalf.

3. Fast & Efficient Process

We use proven methodologies and technology tools to expedite your refund claim and minimize processing time.

4. Accurate Compliance

We ensure your refund claim complies with all GST rules, avoiding errors that can cause delays or rejections.

5. Customized Solutions

Whether you’re an exporter, supplier to SEZ, or dealing with inverted duty structure, we tailor the refund strategy to your specific business needs.

6. Transparent Pricing & No Hidden Charges

Our service fees are clear and upfront, with no surprise costs or additional charges.

7. Trusted by Thousands

YKG GLOBAL has successfully helped thousands of clients across industries recover their rightful GST refunds.

8. Continuous Support & Updates

We keep you informed throughout the process and provide ongoing support even after your refund is sanctioned.