GST refund: who can claim, how to file, and how long it takes

• Exports of goods or services made without payment of tax under a letter of undertaking: refund of the accumulated input tax credit.
• Exports with payment of IGST: for goods, the shipping bill itself is the refund claim, processed by Customs; for services, an application is filed.
• Supplies to SEZ units and developers, with or without payment of tax.
• Inverted duty structure: the rate on inputs is higher than on outputs, so credit accumulates. Refund is not allowed where the output is nil-rated or exempt, or for a short list of notified goods.
• Excess balance in the electronic cash ledger, from a wrong challan or excess payment.
• Excess or wrong payment of tax, including tax paid under the wrong head, and tax paid on a supply that was later cancelled.
• Deemed exports, claimed by the supplier or the recipient.
• Refund following an appeal or order, and refund of pre-deposit.
• Embassies, UN bodies and notified agencies, and international tourists when the scheme is operational.

The application must be filed within two years of the relevant date, which depends on the type of claim:

The old rule that no refund below ₹1,000 is paid still applies to most claims; the Finance Act of 2026 removed it for IGST paid on exports of goods, so that small courier and postal consignments are refunded.

1. File all GSTR-1 and GSTR-3B returns for the period; a claim cannot be filed for a period with a pending return.
2. On the GST portal open Services, Refunds, Application for Refund, choose the category and the period. Claims are filed by tax period, and periods can be clubbed within a financial year for most categories.
3. Upload the statement the category requires: for exports, invoice-wise details with shipping bill or FIRC and BRC; for inverted duty, Statement 1 and 1A with the formula computation.
4. Attach the supporting documents and declarations: that the incidence of tax has not been passed on, that credit claimed is not on blocked items, and for claims above ₹2 lakh a certificate from a chartered or cost accountant on unjust enrichment, except for exports.
5. Submit with DSC or EVC. The credit ledger is debited by the amount claimed, and an application reference number is issued.

Provisional refund. For applications filed from 1 October 2025, 90 percent of the claim is sanctioned provisionally on the basis of system risk evaluation rather than officer scrutiny, for zero-rated supplies; the Budget of 2026 extended the facility to inverted duty claims. Applications the system flags as risky, and notified categories of goods, go to full scrutiny instead. Provisional refund is not given to a person prosecuted for tax evasion above ₹2.5 crore in the last five years.

Interest. If the refund is not paid within 60 days of a complete application, interest at 6 percent a year runs from the 61st day, and at 9 percent where the refund follows an appellate order.

• Invoices in the claim that do not appear in GSTR-2B. Refund of credit is limited to invoices reported by suppliers.
• Export proceeds not realised: for services, the FIRC or BRC is missing; for goods, the shipping bill data did not match GSTR-1 and the invoice did not transmit to ICEGATE.
• No valid letter of undertaking for the year. It must be filed each April before the first zero-rated supply; see LUT filing.
• Credit on capital goods or blocked items included in the net credit for the formula.
• The wrong category or period chosen, which cannot be edited after filing.
• The bank account on the registration is closed or not validated, so the payment fails.
• Filed after two years.

A rejected amount is re-credited to the ledger only through an undertaking not to appeal, in Form PMT-03. Most rejections are reconciliation failures, which is why the work is done before filing: our return filing service keeps GSTR-1, shipping bills and 2B aligned monthly, and handles the refund application and any show cause reply.