GST refund: types, time limit and process
A GST refund returns excess tax or unused credit, such as on exports or inverted duty. It is claimed in RFD-01 within two years of the relevant date.
Short answer
A GST refund is the return of tax, interest or other amounts paid to the government that a taxpayer is entitled to get back, such as unused input tax credit on exports or IGST paid on exports. Refunds are claimed online in Form GST RFD-01 within two years from the relevant date under section 54 of the CGST Act.
- Governed by
- Section 54, CGST Act 2017
- Application
- Form GST RFD-01
- Time limit
- Two years from the relevant date
- Provisional refund
- 90% for zero-rated claims, and inverted duty under the 2025 reforms
Common types of GST refund
Section 54 and rule 89 allow refunds in several situations. Startups usually encounter the following categories in practice, each with its own documents, statements and formula for the eligible amount.
- Unutilised ITC on exports or SEZ supplies made under LUT
- IGST paid on exports of goods, processed through the customs system
- IGST paid on exports of services or SEZ supplies
- Unutilised ITC due to an inverted duty structure
- Excess balance in the electronic cash ledger
- Tax paid on a supply later held to be inter-state instead of intra-state, or vice versa
How the refund process works
The taxpayer files RFD-01 with supporting statements and invoices. The proper officer issues an acknowledgement and may grant a provisional refund of 90% of the claim for zero-rated supplies, with the GST reforms announced in 2025 extending risk-based provisional refunds to inverted duty cases. The balance is sanctioned after scrutiny. Interest is payable to the taxpayer if the refund is delayed beyond 60 days from the date of a complete application.
Why it matters for startups
Exporters of services under LUT build up input tax credit that can only be recovered through refunds, so delays affect cash flow. File refund claims regularly, match invoices with GSTR-2B and foreign exchange receipts, and respond quickly to deficiency memos. Track the two-year limit carefully, because late claims are rejected.
Related services
Sources
- CBIC GST: Acts, rules and notifications
- GST Portal (GSTN)
- TaxGuru: 25 major tax, GST and company law reforms of 2025
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
How long does a GST refund take?
The law requires refunds within 60 days of a complete application, with interest after that, but actual timing depends on scrutiny and documents.
Can a startup get a refund of ITC on domestic sales?
Generally not, unless the supply falls under an inverted duty structure or another category allowed by section 54.
What is the relevant date for an export of services refund?
It is generally the date of receipt of payment in convertible foreign exchange, or the date of invoice if payment was received in advance.