GST refunds · Unregistered persons

Last reviewed: 13 November 2026. A home buyer who cancels a booking after paying GST on instalments, or a policyholder who surrenders a long-term policy, often finds the builder or insurer cannot return the tax because the time for issuing a credit note has passed. The law lets the buyer, even though unregistered, claim that GST directly from the government. The procedure was laid down in Circular 188/20/2022-GST and needs a temporary registration on the GST portal.

At a glance
WhoUnregistered persons who bore GST on a contract that was later cancelled.
BasisSection 54(1), Circular 188/20/2022-GST, rule 89(2)(ka).
Relevant dateDate of the supplier's letter of cancellation of the contract.
Minimum₹1,000; refunds below that are not paid.

Part of our GST refund series. For every refund category, the common process, time limits and interest, start with the complete GST refund guide.

When this route applies

  • A flat or building was booked, GST was paid on instalments for construction services, and the booking was cancelled before the completion certificate or first occupation.
  • A long-term insurance policy on which GST was paid on the premium was terminated before its term.
  • Any similar contract with an unregistered recipient, cancelled after part payment.

The route is available only where the supplier can no longer issue a credit note because the time limit in section 34(2) has expired. If the supplier is still within time, it should issue a credit note, reduce its tax liability and pay the GST back to the buyer directly.

Step by step

  1. Obtain from the supplier a letter cancelling the agreement, and a certificate that it has not issued a credit note, has not adjusted the tax and has not claimed any refund of it.
  2. Register on the GST portal using the "Unregistered applicant" option to obtain a temporary registration, using your PAN, in the State or Union Territory where the supplier is registered.
  3. File RFD-01 under the category "Refund for unregistered person", entering the supplier's GSTIN and invoice details, and upload the cancellation letter, the supplier's certificate and proof of payment.
  4. Give a bank account in your own name linked to the PAN used.
  5. The jurisdictional officer processes the claim like any other: acknowledgement or deficiency memo within 10 days, and a final order within 60 days of a complete application.

Time limit

Circular 188/20/2022-GST treats the date of issue of the supplier's letter of cancellation as the relevant date. The claim must be filed within two years of that date, so ask the builder or insurer for the letter promptly once the cancellation is agreed.

Worked example

A buyer in Thane booked a flat for ₹80,00,000 in 2023 and paid ₹30,00,000 in instalments, on which the builder charged GST at 5% (₹1,50,000). The booking was cancelled in 2025. The builder refunded the instalments as per the agreement and MahaRERA norms but could not refund the GST, as the time for a credit note on the earlier invoices had expired. The builder issues a cancellation letter dated 10 March 2026 and the certificate. The buyer obtains a temporary registration in Maharashtra and files RFD-01 for ₹1,50,000 well before 10 March 2028.

The cancellation and forfeiture side of such cases is covered in our note on MahaRERA booking cancellation and refunds.

Common problems

  • Supplier unwilling to give the certificate. Without it the claim is incomplete; the buyer may need to insist in writing, citing Circular 188.
  • Invoice details not available. The buyer needs the supplier's GSTIN, invoice numbers, dates and tax for each instalment.
  • Bank account or PAN mismatch with the temporary registration.

Frequently asked questions

Can an unregistered person claim a GST refund?

Yes. Circular 188/20/2022-GST allows an unregistered person who bore GST on a contract or agreement that was later cancelled, for example a flat booking or a long-term insurance policy, to claim refund of that tax by obtaining a temporary registration on the GST portal.

How do I claim GST refund on a cancelled flat booking?

Obtain the builder's cancellation letter and its certificate that no credit note or refund was issued or claimed, get a temporary registration on the GST portal with your PAN in the builder's State, and file RFD-01 under the category for unregistered persons.

What is the time limit for the refund?

Two years from the relevant date, which Circular 188/20/2022-GST treats as the date of issue of the supplier's letter of cancellation of the contract.

Why can't the builder refund the GST directly?

A supplier can reduce its tax only by issuing a credit note under section 34, and that is not allowed after 30 November following the end of the financial year of supply or the date of the annual return, if earlier. Once that time has passed, the buyer's own refund claim is the route.

Is there a minimum amount for this refund?

Yes. Section 54(14) does not allow refunds below ₹1,000.

Need help recovering GST on a cancelled booking or policy?
We obtain the temporary registration, assemble the supplier documents and file and follow up the claim. The outcome rests with the proper officer; our work is to put a complete 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.