GST refund on exports: the process

Exporters claim GST refunds either as an automatic refund of IGST paid (through the shipping bill, for goods) or as a refund of unutilised input tax credit in Form RFD-01 (under the LUT route). Refund applications must be filed within two years of the relevant date, and 90% may be granted provisionally.

The two refund routes

Route 1 — pay IGST, automatic refund. For export of goods on payment of IGST, the shipping bill itself is treated as the refund application; the IGST is refunded to the exporter's bank account once the shipping bill and GSTR-1/3B data match (Rule 96).

Route 2 — LUT, refund of ITC. For exports under LUT without payment of tax (typical for services), the exporter claims a refund of unutilised ITC in Form RFD-01 (Rule 89).

The RFD-01 process

1. File Form RFD-01 on the portal for the period, selecting the export category.
2. Upload statements (invoice details, FIRC/BRC for services, shipping bills for goods).
3. The officer issues an acknowledgment (RFD-02) or deficiency memo (RFD-03).
4. Provisional refund of 90% via RFD-04, then final order in RFD-06.
5. Payment order in RFD-05 credits the bank account.

The Rule 89(4) formula

Refund of ITC = (Turnover of zero-rated supply × Net ITC) ÷ Adjusted Total Turnover. 'Net ITC' is the ITC availed on inputs and input services in the period. Worked example: Net ITC Rs.5,00,000; zero-rated turnover Rs.40,00,000; adjusted total turnover Rs.50,00,000. Refund = 5,00,000 × 40,00,000 ÷ 50,00,000 = Rs.4,00,000.

Timelines and common rejections

• File within two years of the relevant date (Section 54).
• Missing FIRC/BRC for service exports is the top rejection reason.
• Mismatch between shipping bill and GSTR-1 stalls automatic IGST refunds.
• Interest at 6% is payable by the department if refund is delayed beyond 60 days (Section 56).