Who Is Eligible to Claim a GST Refund?

Introduction

The Goods and Services Tax (GST) is a unified tax system that applies to a wide range of goods and services across India. However, there are situations where taxpayers may end up paying more GST than necessary. To address this, the government has established a refund mechanism that allows registered taxpayers to reclaim excess GST paid under specific conditions.

GST refunds can be claimed by various entities, including exporters, businesses with unutilized input tax credit, taxpayers who have made excess payments, deemed exporters, embassies, and in some countries, even international tourists. Each category must meet certain eligibility criteria to qualify.

In this article, we’ll cover who can claim a GST refund, the common scenarios where refunds apply, the step-by-step procedure, and the timeline for making a claim

What is a GST Refund?

A GST refund allows registered taxpayers to reclaim the excess amount of Goods and Services Tax (GST) paid on the supply of goods or services beyond their actual tax liability. Such situations can arise due to overpayment, calculation errors, exports, or an inverted duty structure.

Who Can Claim a GST Refund?

Various taxpayers and scenarios are eligible for GST refunds, including:

Excess Payment of GST:
Refunds can be claimed when more GST is paid than required, often due to clerical errors, miscalculations, or payment under the wrong tax head.
Accumulated Input Tax Credit (ITC):
Exporters and those dealing in zero-rated supplies can accumulate ITC. When ITC exceeds output liability, the excess can be claimed as a refund. Exporters paying IGST can also reclaim it.
Exports of Goods and Services:
Since exports are zero-rated under GST, exporters can claim a refund either for IGST paid at export or for accumulated ITC if exporting under a Bond or LUT (Letter of Undertaking).
UN Agencies and Embassies:
Foreign diplomatic missions and UN bodies, which are tax-exempt, can claim refunds on GST paid for eligible purchases in India.
Inverted Duty Structure:
When input GST is higher than output GST (e.g., in sectors like textiles), businesses can claim a refund for the unutilized ITC.
Provisional Assessment Finalization:
If provisional tax payments exceed the final assessed liability, the excess can be claimed as a refund.
International Tourists:
Foreign tourists may claim a refund on GST paid for goods purchased in India, provided they carry those goods out of the country and follow proper procedures.
GST Payment Errors:
Errors in returns or tax payments that lead to overpayment can be rectified by filing for a refund through the GST portal

GST Refund for Exporters

Exports are treated as zero-rated supplies under GST, enabling businesses to claim input tax refunds. Refund options include:

Export under LUT/Bond: No GST is charged on export; refund is claimed on unutilized ITC.
Export with IGST Payment: Tax is paid on exports and later claimed as a refund.

To address processing delays, the government introduced an e-wallet system to ensure quicker GST refunds and reduce the impact on working capital.

When Can GST Refunds Be Claimed?

Refunds may be claimed in the following cases:

Export of goods or services
Supplies to SEZ units or developers
Deemed exports
Purchases by UN bodies or embassies
Court, tribunal, or appellate orders
Inverted duty structure (excluding nil-rated or fully exempt supplies)
Finalization of provisional assessments
Refund of pre-deposits in case of appeal
Excess tax payment due to errors
GST paid by foreign tourists on goods taken abroad
Advance payments where goods/services were not supplied
Wrong classification of intra-state/inter-state supply.

Time Limit for Filing GST Refund Claims

Refund applications must be filed within 2 years from the relevant date. Once submitted, the government must process the claim within 60 days. If delayed:

6% interest per annum is payable on the delayed refund
9% interest per annum applies if the delay is due to a court or authority order

How to Claim a GST Refund?

Claiming a GST refund involves a structured online process through the GST portal. Here’s a step-by-step guide:

Login to the GST Portal
Visit www.gst.gov.in and log in using your credentials.
File Refund Application (Form RFD-01)
Navigate to the refund section and fill out Form RFD-01. Enter the refund amount, reason for the claim, and attach the necessary supporting documents.
Submit the Application
After completing the form, submit it electronically. Upon successful submission, you will receive an Application Reference Number (ARN) to track your refund status.
Certification by Chartered Accountant (if applicable)
For refund claims exceeding a prescribed limit or under specific categories, a certificate from a Chartered Accountant or Cost Accountant may be required.
Refund Processing by Authorities
The tax authorities will review the application and may request additional documents or clarifications. The refund should be processed within 30 days of submission, provided all requirements are met.
Refund Disbursement
Once approved, the refund amount is credited to the taxpayer’s registered bank account through NEFT, RTGS, or ECS

How to Track GST Refund Status Online

After submitting a GST refund application, taxpayers can easily track its status through the official GST portal. There are two convenient methods for tracking:

1. Post-Login Tracking

Log in to the GST portal using your credentials.
Navigate to Services > Refunds > Track Application Status.
Select the relevant financial year and verify your bank account details to view the latest refund status.

2. Pre-Login Tracking

Visit the GST portal without logging in.
Click on Services > Track Application Status.
Enter your Application Reference Number (ARN) to view the current status.

Stages of GST Refund Status

Refund Application Submitted
The taxpayer has submitted the refund request using Form RFD-01. An acknowledgement is sent via email and SMS with an ARN for future tracking.
Refund Under Processing
The application is under review by tax authorities. They may request additional documents or clarification. If everything is in order, the refund is processed within 30 days.
Refund Approved and Disbursed
Once approved, the taxpayer receives an official refund order. The refund amount is then credited directly to the registered bank account

About the Author

shivani

Shivani is an accomplished writer known for her ability to simplify complex legal topics into clear, practical insights. Her content equips entrepreneurs with the essential knowledge to confidently navigate business laws, helping them launch and manage their ventures with greater ease and clarity

June 11, 2025