Last reviewed: 13 November 2026. Money stuck as a GST refund is working capital the business has already earned. The law allows a refund in more than ten distinct situations, each with its own section, statement, relevant date and evidence. November 2026 has also changed the process itself: refunds are now acknowledged in 10 days, provisional refunds of 90% are generated by the portal within three working days for low-risk export and inverted duty claims, and a new RFD-01 applies from 1 December 2026. This guide maps every refund category, the common process, the time limits and the points on which claims are usually rejected, and links to a detailed page for each type.
Every GST refund type at a glance
The table below lists the refund categories that arise in practice for Indian businesses and individuals. Click through to the detailed page for documents, worked examples and FAQs on each.
| Refund type | Law | Who claims | Relevant date for the two-year limit | 90% provisional? |
|---|---|---|---|---|
| Export of goods or services with payment of IGST | s.16(3)(b) IGST, rule 96 (goods), rule 89 (services) | Exporter | Goods: date the ship or aircraft leaves India. Services: date of receipt of payment (or invoice date if paid in advance) | Goods: refunded through ICEGATE, not RFD-01. Services: yes |
| Export under LUT: unutilised ITC | s.54(3)(i), rule 89(4) | Exporter | Same as above, per shipment or receipt | Yes |
| Supplies to SEZ units and developers | s.16 IGST, rule 89(1), 89(4) | Supplier to the SEZ | Due date of the return for the period of supply | Yes |
| Inverted duty structure | s.54(3)(ii), rule 89(5) | Registered person whose input rate exceeds output rate | Due date of the return for the period in which the claim arises | Yes, from 1 Nov 2026 |
| Deemed exports | s.147, Notification 48/2017-CT | Supplier or recipient | Date the return covering the deemed exports is furnished | No |
| Excess balance in electronic cash ledger | s.49(6), rule 92(1B) | Any registered person | No time limit (Circular 166/22/2021-GST) | Not needed: portal-processed |
| Excess tax paid, or tax paid under the wrong head | s.54(1), s.77 CGST / s.19 IGST, rule 89(1A) | Taxpayer who paid | Date of payment; for wrong head, date of paying the correct tax | No |
| Refund from an appeal, assessment order or pre-deposit | s.54, s.107(6), s.115, s.60 | Taxpayer who succeeds | Date of communication of the order, or of adjustment after final assessment | No |
| Unregistered buyer after a cancelled contract | s.54(1), Circular 188/20/2022-GST | Unregistered recipient (flat buyers, policyholders) | Date of the supplier's letter of cancellation | No |
| UN agencies, embassies and other UIN holders | s.55, rule 95 | Notified agencies with a UIN | Two years from the last day of the quarter of purchase | No |
What the law does not refund
Section 54(3) allows refund of unutilised input tax credit in only two cases: zero-rated supplies made without payment of tax, and an inverted duty structure. Accumulated credit from slow sales, a business closure or a large capital purchase is not refundable on those grounds alone. It stays in the credit ledger for future output tax. Two further bars apply even within the permitted cases: no refund of credit where the goods exported are subject to export duty, and no refund of credit where the supplier has claimed drawback of central tax or refund of IGST paid on the same supplies.
The common process from 1 November 2026
Except for IGST paid on export of goods, which customs processes through the shipping bill, every refund is applied for on the GST portal in Form GST RFD-01. Notification No. 05/2026-Central Tax rewrote rules 89 to 92 with effect from 1 November 2026 and moves much of the processing to the system.
| Stage | Form | Time limit (from 1 November 2026) |
|---|---|---|
| Application filed on the GST portal with statements and documents | RFD-01 | Within two years of the relevant date (no limit for excess cash ledger balance) |
| Acknowledgement, or deficiency memo | RFD-02 / RFD-03 | 10 days (earlier 15). If neither issues, the application is deemed acknowledged under new rule 90(3A) |
| Provisional refund of 90% (zero-rated and inverted duty claims) | RFD-04 | Generated by the portal within three working days of acknowledgement, on system risk evaluation (rule 91(2)) |
| Show cause notice if the officer proposes to reject any part | RFD-08 / reply in RFD-09 | Reply within 15 days of the notice |
| Final order | RFD-06 | Within 60 days of the date of a complete application (section 54(7)) |
| Payment order | RFD-05 | Issued with or after the sanction; now also through the portal |
| Interest on delayed refund | — | 6% after 60 days; 9% where the refund flows from an appellate or court order (section 56) |
Two changes deserve attention. First, once an application is acknowledged, a deficiency memo can no longer be issued on it, so the officer's 10-day window is the only stage at which incompleteness can be raised. Second, the 60-day clock in section 54(7) now runs from the filing date where the application is deemed acknowledged, which strengthens the interest claim under section 56 if the refund is late.
The 2026 changes in one table
| Change | Source | Effective |
|---|---|---|
| Omission of section 13(8)(b) IGST: intermediary services to overseas clients can qualify as exports | Finance Act, 2026, s.157 | 30 March 2026 |
| 90% provisional refund extended to inverted duty claims | Finance Act, 2026, s.155; s.54(6) | 1 November 2026 |
| ₹1,000 minimum refund no longer applies to goods exported with payment of tax | Finance Act, 2026, s.155; s.54(14) | 1 November 2026 |
| 10-day acknowledgement, deemed acknowledgement, RFD-04 in three working days | Rules 90 and 91, Notification 05/2026-CT | 1 November 2026 |
| 1.5-times domestic value cap on zero-rated goods turnover removed | Rule 89(4)(C) | 1 November 2026 |
| Input services availed on or after 1 November 2026 included in the inverted duty formula | Rule 89(5) | 1 November 2026 |
| Order of debit: IGST first, then CGST and SGST equally | Rule 86(3), new rule 89(3) | 1 November 2026 |
| Excess cash ledger refunds sanctioned by the portal after adjusting demands | Rule 92(1B) | 1 November 2026 |
| Substituted RFD-01 and revised statements, including a no-prosecution declaration | Rule 89(2) | 1 December 2026 |
| Capital goods credit, spread over 60 months, in LUT and inverted duty refunds | Rule 89(4), 89(5) | For credit availed from 1 April 2027 |
| Export proceeds through SNRR or INR Nostro accounts and RBI-compliant set-off accepted | Circular 263/09/2026-GST | 26 October 2026 |
| Rule 96(10) and rules 89(4A), 89(4B) omissions to be applied to pending proceedings | Circular 264/10/2026-GST | 26 October 2026 |
Unjust enrichment and the CA certificate
Section 54(8) pays refunds of exports, unutilised credit and wrong-head tax straight to the applicant. In other cases, such as excess tax paid on a domestic supply, the refund goes to the applicant only if the tax was not passed on to anyone else; otherwise it is credited to the Consumer Welfare Fund. Where such a claim exceeds ₹2 lakh, rule 89(2)(m) requires a certificate from a chartered accountant or cost accountant that the incidence has not been passed on. Below ₹2 lakh, a self-declaration is enough.
Where refunds usually go wrong
- Mismatched data. Shipping bill, GSTR-1, GSTR-3B and the refund statement must tell the same story, invoice by invoice.
- Wrong turnover figures. Adjusted total turnover and the turnover of zero-rated or inverted supplies are defined terms; using book turnover distorts the formula.
- Ineligible credit in Net ITC. Blocked credit, capital goods (until April 2027) and, for inverted duty, input services availed before 1 November 2026 must be excluded.
- Time-barred periods. The relevant date differs by category, and the two-year limit is strictly applied.
- Missing proof of realisation for exports of services, or of SEZ endorsement for supplies to SEZ units.
Our guide on deficiency memos and refund rejections sets out the cure for each of these.
How we handle a refund file
- Eligibility and period review. Which category applies, which periods are still within time, and what can be clubbed. Circular 125/44/2019-GST permits a single claim covering consecutive tax periods.
- Reconciliation. Books, GSTR-1, GSTR-3B, GSTR-2B, shipping bills or bills of export, FIRC or bank realisation data, and the electronic ledgers.
- Computation and statements. The formula working, the invoice-wise statement and the declarations under rule 89(2).
- Filing and follow-up. RFD-01 filing, ledger debit in the correct order, tracking of RFD-02 and RFD-04, and replies to any RFD-03 or RFD-08.
- Appeal where needed. An appeal in APL-01 against a rejection, within three months of the order.
Frequently asked questions
How many types of GST refund are there?
In practice, about ten: IGST paid on exports of goods and services, unutilised ITC on exports under LUT, supplies to SEZ, inverted duty structure, deemed exports, excess balance in the electronic cash ledger, excess or wrong-head tax, refunds arising from orders and pre-deposits, refunds to unregistered buyers after cancelled contracts, and refunds to UN bodies and embassies under section 55. Each has its own relevant date and evidence.
What is the time limit for claiming a GST refund?
Two years from the relevant date under section 54(1). The relevant date depends on the category, for example the date the ship leaves India for goods exports, or the due date of the return for an inverted duty claim. Refund of excess balance in the electronic cash ledger has no time limit.
How long does the department take to pay a GST refund?
The officer must acknowledge or issue a deficiency memo within 10 days, and pass the final order within 60 days of a complete application. For zero-rated and inverted duty claims, the portal generates a 90% provisional refund within three working days of acknowledgement, subject to its risk evaluation. Delays beyond 60 days carry interest at 6% under section 56.
Can I get a refund of accumulated ITC if my sales are low?
No. Section 54(3) allows refund of unutilised ITC only for zero-rated supplies without payment of tax and for an inverted duty structure. Credit that builds up for other reasons remains available for future output tax.
What changed in GST refunds on 1 November 2026?
Sections 54(6) and 54(14) were amended by the Finance Act, 2026, and rules 89 to 92 by Notification 05/2026-Central Tax. Inverted duty claims now get 90% provisional refunds, the acknowledgement period is 10 days with deemed acknowledgement, RFD-04 is system-generated within three working days, and the 1.5-times cap on zero-rated goods turnover is removed.
Is a CA certificate required for a GST refund?
Only where unjust enrichment applies and the claim exceeds ₹2 lakh, for example a refund of excess tax paid on a domestic supply. Export, SEZ, inverted duty and wrong-head refunds are paid to the applicant without that test, so the certificate is not needed for them.
What happens if my refund is rejected?
The officer must first issue a show cause notice in RFD-08, which you answer in RFD-09 within 15 days. If the order in RFD-06 still rejects the claim, you can appeal in APL-01 within three months. Credit debited for the rejected amount is re-credited to the ledger under rule 93 once the appeal period expires or the appeal is finally decided.
Can a single refund application cover several months?
Yes. Circular 125/44/2019-GST allows a claim to cover consecutive tax periods, including periods across financial years, provided each period is within the two-year limit.
We review eligibility, build the computation and reconciliations from your books and returns, file the RFD-01, and handle deficiency memos, show cause notices and appeals until the claim is closed. The outcome rests with the proper officer; our work is to put a complete, defensible claim in front of them.
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This article is for general information and does not constitute advice on any specific case. Sources: sections 54 to 56 and 77 of the CGST Act, 2017; rules 89 to 97 of the CGST Rules, 2017 as amended by Notification No. 05/2026-Central Tax dated 26 October 2026; Notification No. 03/2026-Central Tax; CBIC circulars cited in the text. Rules, forms and portal functionality change; confirm the current position on the CBIC tax repository and the GST portal before filing. Firm details: Somesh Chandak & Associates, Chartered Accountants, Unit 119, 1st Floor, Centura Square IT Park, SG Barve Road, Wagle Estate, Thane West 400604. FRN 158694W.