GST Refund &
Export Services
CA-Assisted
File your LUT for zero-rated exports, claim IGST refund, get GST back on inverted duty or excess payment, and file RFD-01 — all done by a CA, on time, with maximum refund recovery.
GST LUT Filing — Export Without Payment of Tax
▼A Letter of Undertaking (LUT) is a declaration filed by an exporter on the GST portal that allows them to export goods or services without paying IGST. Instead of paying 18% IGST and then claiming a refund later, you simply file LUT once a year and export tax-free. This is the most cash-flow-efficient route for all regular exporters.
Who Can File LUT?
- Any GST-registered taxpayer who exports goods or services (goods or services supplied to a Special Economic Zone also qualify)
- Service exporters providing services to foreign clients (even if payment is received in Indian Rupees in certain cases)
- Suppliers to SEZ units and SEZ developers — supply to SEZ is also treated as zero-rated
- NOT eligible: Taxpayers who have been prosecuted for offences under CGST Act / IGST Act with tax amount above ₹2.5 Crore
Step-by-Step LUT Filing Process
- 1
Login to GST Portal
Visit gst.gov.in → Services → User Services → Furnish Letter of Undertaking (LUT)
- 2
Select Financial Year
Choose the FY for which LUT is being filed. For renewal, select the new financial year before 1st April.
- 3
Fill in Declaration Details
Confirm the undertaking conditions — that you will comply with export obligations and pay IGST if export conditions are not met within the prescribed time.
- 4
Add Authorized Signatory Details
Name and designation of the person signing the LUT — must be an authorised signatory registered on the GST portal.
- 5
Submit with DSC or EVC
Sign using Digital Signature Certificate (DSC) for companies/LLPs, or EVC (OTP) for proprietorships and partnerships.
- 6
Download Acknowledgement
LUT is accepted instantly. Download the ARN (Acknowledgement Reference Number) and the LUT PDF — share with your customs house agent and buyer as proof of zero-rated export.
Export Time Limit Under LUT
For goods: Exports must happen within 3 months from the date of invoice. For services: Payment must be received in convertible foreign exchange within 1 year from invoice date. If these conditions are not met, IGST must be paid — otherwise the LUT conditions are breached and your LUT may be revoked.
Documents Required for LUT Filing
⚠️ Never Export Without Filing LUT First
Exporting without a valid LUT means you must pay IGST on the export invoice value. While you can later claim this as a refund via RFD-01, it blocks your working capital unnecessarily for 1–3 months. Always file/renew LUT before the start of the financial year (or before your first export shipment).
GST Refund — Export, Inverted Duty & Excess Payment
▼GST refunds arise in three main situations: (1) exporters who paid IGST on exports instead of using LUT, (2) businesses with an inverted duty structure where input GST rate exceeds output GST rate, and (3) cases of excess or wrongful GST payment. All three categories claim refunds via Form RFD-01 on the GST portal.
| Refund Type | Who Gets It | Relevant Date | Time Limit |
|---|---|---|---|
| Export of Goods with IGST Payment | Exporters who paid IGST instead of using LUT | Date of shipping bill filing | 2 years |
| Export of Services with IGST Payment | Service exporters who paid IGST on invoices | Date of invoice | 2 years |
| ITC Refund — Inverted Duty Structure | Businesses where input tax rate > output tax rate | End of FY in which ITC accumulated | 2 years |
| Excess / Wrongful Tax Payment | Any taxpayer who overpaid CGST/SGST/IGST | Date of excess tax payment | 2 years |
| Supplies to SEZ Unit / Developer | Businesses supplying to SEZ without LUT | Date of invoice | 2 years |
| Deemed Exports | Supplier of goods to EOU / AA holders | Date of return filing for the period | 2 years |
What is the Inverted Duty Structure Refund?
When your input GST rate is higher than your output GST rate, you accumulate ITC that cannot be utilized — this is inverted duty structure. The government allows a refund of this accumulated, unutilised ITC.
Classic Inverted Duty Example
A manufacturer buys raw materials at 18% GST and sells the finished product at 5% GST (e.g., footwear, textiles, fertilizers). The ITC of 18% paid on inputs can never be fully offset against the 5% output GST. This leftover ITC is refundable.
Documents for GST Refund Claim
✅ What Happens After Refund is Sanctioned?
The GST department processes the refund within 60 days of RFD-01 submission. Once sanctioned, the amount is directly credited to your registered bank account via NEFT/RTGS. If the department delays beyond 60 days, they must pay 6% interest p.a. on the refund amount for the delayed period.
IGST Refund on Export of Goods
▼When an exporter pays IGST on the export invoice (instead of filing LUT), the IGST paid is refundable. For export of goods, this refund is largely automated — the customs system (ICEGATE) shares your shipping bill data with GSTN, which cross-checks it with your GSTR-1. If data matches, the refund is processed without filing RFD-01. For services, RFD-01 must be filed manually.
How the Automated IGST Refund Works
Step 1 — Export Goods with IGST Payment
File your export invoice with IGST charged. Mention "Payment of IGST" on the shipping bill filed at customs (ICEGATE).
Step 2 — File GSTR-1 with Export Details
Report the export invoice in GSTR-1 under Table 6A (Export with payment of IGST). Invoice number, value, and IGST amount must match the shipping bill exactly.
Step 3 — File GSTR-3B and Pay IGST
Declare and pay the IGST in GSTR-3B. The refund is of the IGST already paid — GSTR-3B payment is mandatory before refund can be processed.
Step 4 — ICEGATE ↔ GSTN Matching
Customs (ICEGATE) transmits shipping bill data to GSTN. GSTN cross-validates: shipping bill number, invoice number, IGST amount, exporter GSTIN. Mismatches block the refund.
Step 5 — Refund Sanctioned & Credited
If all data matches, the refund is automatically sanctioned by ICEGATE and credited to your pre-validated bank account — no officer intervention needed for clean cases.
Common Reasons IGST Refund Gets Stuck
- Mismatch between GSTR-1 invoice details and shipping bill — even a 1-rupee difference blocks the refund
- GSTR-3B filed but IGST not paid in the correct head (CGST paid instead of IGST by mistake)
- Shipping bill not filed with "IGST paid" flag — filed as "LUT/Bond" accidentally
- Bank account not pre-validated on the GST portal — refund cannot be credited
- GSTR-1 not filed in time — shipping bill data present but GSTR-1 missing
- IEC (Import Export Code) not linked to GSTIN on the customs portal
| Export Type | Refund Route | Form | Processing |
|---|---|---|---|
| Export of Goods (with IGST payment) | Automated via ICEGATE-GSTN | No RFD-01 needed | Automatic if data matches |
| Export of Services (with IGST payment) | Manual application | RFD-01 required | 60 days after RFD-01 |
| Export of Goods (with LUT) | ITC refund via RFD-01 | RFD-01 required | 60 days after RFD-01 |
| Supply to SEZ with IGST payment | Manual application | RFD-01 required | 60 days after RFD-01 |
IGST Refund vs LUT Route — Which is Better?
The LUT route is always better for regular exporters — zero upfront tax payment, better cash flow, no refund processing wait. IGST refund route makes sense only if you forgot to file LUT, or if your export is a one-off and you want to keep things simple. TaxClue helps you switch to the LUT route going forward while recovering all pending IGST refunds.
RFD-01 Filing — GST Refund Application
▼Form RFD-01 is the standard GST refund application form filed on the GST portal for all manually claimed refunds. It is the primary form for export of services refund, inverted duty refund, excess payment refund, deemed exports refund, and any other refund not processed automatically. TaxClue prepares and files RFD-01 with all supporting documents to maximise your chances of full refund without deficiency memos.
RFD-01 Filing — Step by Step
- 1
Identify the Refund Category
RFD-01 has different sections for each refund type — export of goods/services, inverted duty, excess payment, etc. Selecting the wrong category is a common mistake that leads to rejection.
- 2
Prepare the Refund Calculation
Calculate the exact refund amount — for inverted duty, use the formula: (Turnover of inverted supply ÷ Adjusted Total Turnover) × Net ITC. For exports, the IGST actually paid is the refund amount.
- 3
Attach Supporting Statements
Statement 3 (for exports with IGST), Statement 5A (for services exports), Statement 5B (for inverted duty) — specific annexures required for each refund type.
- 4
Submit RFD-01 on GST Portal
File the form online → GST Portal → Services → Refunds → Application for Refund. Upload all documents and sign with DSC or EVC.
- 5
Track ARN and Respond to Queries
After filing, an ARN is generated. The refund officer may issue Form RFD-08 (Show Cause Notice) or Form GST RFD-03 (Deficiency Memo) if documents are incomplete. TaxClue responds promptly to all queries.
- 6
Refund Sanctioned — RFD-06
If approved, the Proper Officer issues Form RFD-06 (Refund Sanction Order) and the amount is credited to your bank account via RFD-05 payment advice.
RFD-01 Refund Timeline
| Stage | Form | Timeline | What Happens |
|---|---|---|---|
| Application Filed | RFD-01 | Day 0 | ARN generated, acknowledged |
| Provisional Refund (90%) | RFD-04 | Within 7 days | 90% of refund credited to bank (exports only) |
| Acknowledgement | RFD-02 | Within 15 days | Officer acknowledges completeness of application |
| Deficiency Memo (if any) | RFD-03 | Within 15 days | Officer lists missing documents — applicant must re-file |
| Show Cause Notice (if any) | RFD-08 | Before final order | TaxClue files reply to SCN with supporting documents |
| Final Refund Order | RFD-06 | Within 60 days | Full refund sanctioned — RFD-05 payment advice issued |
| Refund Credited | Bank | 2–3 days after RFD-06 | Amount credited via NEFT to pre-validated bank account |
⚠️ Common Reasons for RFD-01 Rejection
- Filing after the 2-year time limit — refund claim becomes time-barred
- GSTR-1 or GSTR-3B not filed for the refund period — returns must be current before filing RFD-01
- Wrong refund category selected in the form — leads to deficiency memo
- Missing Statement 3 / 5A / 5B annexures — most common deficiency memo reason
- Bank account not pre-validated on GST portal — refund cannot be processed
- Excess ITC claimed in GSTR-3B — refund cannot exceed ITC actually available
Frequently Asked Questions
Yes — if you paid IGST on the export invoice, the entire IGST paid is refundable. For goods exports, the automated ICEGATE-GSTN process should handle this if your GSTR-1 and shipping bill data match. For service exports, file RFD-01 with the relevant invoices and FIRC/BRC. TaxClue can recover all past IGST paid on exports within the 2-year time limit.
The most common reasons are: (1) mismatch between invoice number/value in GSTR-1 and the shipping bill, (2) GSTR-3B filed but IGST amount not shown correctly under IGST head, (3) bank account not pre-validated on the GST portal, (4) IEC not linked to GSTIN on ICEGATE, (5) shipping bill flagged as "Bond/LUT" instead of "IGST paid." TaxClue diagnoses the exact cause and coordinates with both GSTN and customs to resolve it.
Yes — LUT is valid for one financial year and must be renewed before the start of each new financial year (i.e., before 1st April). You can file the new year's LUT from the beginning of March. TaxClue sends renewal reminders and files the LUT for all clients in March to ensure zero disruption to exports at the start of April.
The refund is calculated using the formula: Refund = (Turnover of inverted rated supply ÷ Adjusted Total Turnover) × Net ITC for the period. Note that ITC on capital goods and blocked credits under Section 17(5) cannot be refunded. The refund can be claimed for each quarter or monthly period. TaxClue prepares the full calculation, identifies which ITC is eligible, and maximises your refund amount before filing RFD-01.
A Deficiency Memo means the GST officer found incomplete or missing documents in your RFD-01 application. You must re-file RFD-01 with all the deficiencies corrected — you cannot simply "reply" to RFD-03. Importantly, the 2-year time limit continues to apply — a deficiency memo does not extend your filing deadline. TaxClue responds to all deficiency memos within 48 hours and re-files with the complete documentation.
Yes — this is a classic case of excess / wrongful payment. You paid CGST + SGST on what should have been IGST. The Supreme Court in Union of India vs Bharti Airtel has ruled that such refunds are permissible. However, the process involves filing a rectification in your returns and then claiming refund via RFD-01. TaxClue handles such cross-head refund cases regularly — the process requires careful documentation to prevent rejection.
Recover Every Rupee of GST Refund You're Owed
LUT filed, IGST refund processed, RFD-01 submitted — TaxClue's CA handles everything end-to-end. Maximum refund, zero rejections.
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