Introduction

Under GST, exporters and businesses engaged in zero-rated supplies can claim refunds for unutilised Input Tax Credit (ITC), excess tax payments, and accumulated credit due to inverted duty structures. Since exports are either zero-rated with payment of IGST or without payment of IGST under LUT, the GST framework ensures that taxes do not become a cost for exporters.

This guide by Bisways Consulting Group explains the different types of GST refunds, eligible scenarios, the filing process, required documents, and common issues faced during refund claims.

Types of GST Refunds Eligible for Exporters and Businesses

1. Refund of Unutilised ITC on Zero-Rated Supplies (LUT Route)

Applicable when exporters supply goods/services without payment of IGST under a Letter of Undertaking (LUT).
ITC accumulated can be claimed as a refund.

2. Refund of IGST Paid on Export of Goods/Services

Businesses exporting with payment of IGST can claim a refund after validation by Customs and GSTN.

3. Refund under Inverted Duty Structure

Occurs when the GST rate on inputs is higher than the GST rate on output supplies. Eligible sectors can claim the accumulated ITC.

4. Refund of Excess Tax Paid

When tax is paid incorrectly due to wrong classification, deposition under wrong head, or clerical mistakes.

5. Refund for Deemed Exports

Supplies categorised as “deemed exports” can also claim refunds subject to conditions.

Who Can Apply for GST Refund?

• Manufacturers exporting goods

• Service exporters

• Merchant exporters

• Suppliers with inverted duty

• SEZ units and developers

• Dealers with excess ITC

• Businesses with excess cash ledger balance

Documents Required for GST Refund

For Export with IGST Payment

• Shipping bill

• Export General Manifest (EGM)

• Invoice copy

• FIRC/BRC (for services)

For LUT Route (Export Without IGST)

• LUT acknowledgement

• Statement of invoices

• ITC ledger details

• Export documentation

For Inverted Duty Structure

• Purchase invoices

• GST returns (GSTR-1, GSTR-3B)

• Annexure A / Statement 1

• Stock statements

For Excess Tax Payment

• Proof of payment

• Clarification letter

• Supporting invoices

How to File GST Refund – Step-by-Step Process

Step 1: Log in to GST Portal

Go to Services → Refunds → Application for Refund.

Step 2: Select Refund Category

Choose from:

• Refund of unutilised ITC

• Refund of IGST paid

• Refund due to inverted duty

• Excess tax paid

Step 3: Upload Required Statements

Statements differ depending on refund type:

• RFD-01 is the main application form

• Statement 2/3/4/5 based on the refund category

Step 4: Attach Supporting Documents

Upload invoice statements, LUT, declarations, and CA certificates where required.

Step 5: Submit Application with DSC/EVC

Step 6: Acknowledgement & ARN Generated

Step 7: Refund Processing

Officers verify documents and may request clarifications (RFD-03).

Step 8: Refund Order Passed

Refund sanctioned through:

• RFD-06 – Refund order

• PMT-03 – Re-credit order (if required)

Step 9: Amount Credited

Refund is credited to the bank account validated with GST portal.

Timelines for GST Refund

• Application must be filed within 2 years from relevant date

• Refunds typically processed within 60 days

• Delay beyond 60 days may attract interest under Section 56

Common Mistakes That Delay Refunds

• Mismatch between GSTR-1 and GSTR-3B

• Incorrect HSN/SAC codes

• Non-availability of LUT

• Incomplete shipping bill details

• Wrong claim category selection

• Ineligible input tax credit

• Bank account not validated on the portal

Best Practices for Smooth GST Refund Processing

• Maintain Invoice–Shipping Bill–GSTR data consistency

• File GST returns on time

• Reconcile data every month

• Use correct refund category

• Respond promptly to officer queries

• Keep complete export and purchase records

Conclusion

GST refunds ensure that exporters and businesses engaged in zero-rated supplies are not burdened by taxes that should not be part of their cost. By understanding refund categories, documentation needs, and filing procedures, businesses can claim refunds efficiently and avoid delays.
Bisways Consulting Group assists exporters and businesses with GST refund filing, ITC reconciliation, documentation support, and error-free compliance across all refund categories.