GST Refund explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
An individual who is not registered under GST cannot normally claim a refund on purchases. There is one practical exception: where you paid GST on a long-term contract, typically a flat booking or a long-term insurance policy, the contract was cancelled, and the supplier returned your money without the GST. In that case the law lets you, as an unregistered person, apply for the GST refund yourself.
Section 54(1) allows "any person" to claim a refund of tax within two years of the relevant date, and s.54(8)(e) pays the refund directly to a person who has borne the tax. Notification 26/2022-CT and Circular 188/20/2022-GST set up the route: temporary registration on the portal, then RFD-01 under "Refund for Unregistered Person" with Statement 8 and the documents in Rule 89(2)(ka) and (kb). It is available only when the supplier can no longer issue a credit note under s.34. The two years run from the date of the supplier's cancellation letter.
Who can use this route
The ICAI Handbook on Refunds, summarising Circular 188/20/2022-GST, describes the problem it solves. Buyers who booked flats or bought long-term insurance policies paid GST with their instalments. When the contract was cancelled, the time limit for the supplier to issue a credit note under s.34 had often passed, so the builder or insurer refunded only the net amount, excluding GST. The buyer had paid tax on a service never received.
| Condition | Why it matters |
|---|---|
| You are not registered under GST | Registered persons use their own credit note and ITC adjustments |
| The contract was for supply of service, cancelled or terminated | The route covers construction agreements and long-term insurance policies |
| You paid GST to the supplier | Proof of payment is required |
| The supplier did not refund the GST | Otherwise nothing is left to claim |
| The s.34 credit note period had lapsed at cancellation | If the supplier can still issue a credit note, it must refund the tax directly |
That last condition is the one most often missed. If the builder or insurer is still within time to issue a credit note, they should reduce their own tax liability and pay you the GST. The unregistered-person refund exists only for cases where that door has closed. Our excess tax paid refund service starts by checking this point.
Documents you need
Rule 89(2)(ka) and (kb) list the evidence for this category.
| Document | Rule |
|---|---|
| Statement of invoices: number, date, value, tax paid, payment details, with copies of invoices | 89(2)(ka) |
| Proof of payment to the supplier | 89(2)(ka) |
| Agreement, registered agreement or contract with the supplier | 89(2)(ka) |
| Supplier's letter cancelling or terminating the agreement | 89(2)(ka) |
| Details and proof of the amount the supplier paid back on cancellation | 89(2)(ka) |
| Supplier's certificate: tax paid on these invoices, not adjusted through a credit note, and no refund claimed or to be claimed by the supplier | 89(2)(kb) |
The supplier's certificate is essential; without it the officer cannot confirm that the same tax will not be refunded twice. No CA certificate on unjust enrichment is needed where the refund is claimed by an unregistered person who has borne the tax (proviso to Rule 89(2)(m)).
How much you get back
The refund cannot exceed the tax shown on the invoices. Where the supplier returned less than the full amount you paid (for example after deducting cancellation charges), only the proportionate tax corresponding to the amount refunded is granted.
Illustration. A buyer paid instalments of ₹30,00,000 plus GST of ₹1,50,000 (illustration). The builder cancels and refunds ₹27,00,000, keeping ₹3,00,000 as charges, and does not return any GST.
| Item | Amount |
|---|---|
| GST paid | ₹1,50,000 |
| Share of principal refunded by builder | ₹27,00,000 ÷ ₹30,00,000 = 90% |
| Proportionate GST refundable | ₹1,35,000 |
Under s.54(14), no refund is paid if the amount is below ₹1,000.
Time limit
For a person other than the supplier, the relevant date under Explanation 2(g) to s.54 is normally the date of receipt of goods or services. In a cancelled long-term contract, the service was never received. Circular 188/20/2022-GST therefore treats the date of issue of the cancellation letter by the supplier as the relevant date. You have two years from that date. For the wider rules, see relevant date for a GST refund claim.
How the claim is filed
The filing itself follows the portal route in GST refund with temporary registration: temporary registration using PAN in the supplier's State, Aadhaar authentication, a bank account in your own name linked to your PAN, and RFD-01 with Statement 8 in PDF. A separate application is needed for each supplier, and for suppliers registered in different States.
The officer processes it like any other RFD-01 and issues the sanction in RFD-06 with a speaking order.
Flat or insurance: what differs
| Point | Cancelled flat booking | Terminated long-term insurance policy |
|---|---|---|
| Typical supplier | Builder or developer | Insurer |
| Cancellation letter from | Builder | Insurer (termination or surrender communication) |
| Common gap | Builder deducts charges; GST on full amount | Premium refunded net of GST |
| Detailed guide | GST refund on flat cancellation | This article and the temporary registration guide |
Need help getting GST back on a cancelled booking or policy?
We check whether the supplier can still issue a credit note, obtain the supplier's certificate in the required form, and file and follow the claim through to RFD-06. See our excess tax paid and unregistered-person refund support, or the broader GST refund service.
Key takeaways
- Unregistered persons can claim GST back on cancelled construction agreements and long-term insurance policies.
- The route applies only where the supplier can no longer issue a credit note under s.34.
- Rule 89(2)(ka) and (kb) documents are required, including the supplier's certificate.
- The relevant date is the date of the supplier's cancellation letter; the limit is two years.
- Only proportionate GST is refunded where the supplier returns part of the payment; no CA certificate is needed.
Read next
- GST refund on flat cancellation: home buyers
- Can an individual claim GST refund?
- Refund of tax on a cancelled supply and advances
- Rule 89(2): documentary evidence for a refund claim
Disclaimer: Positions stated as on 30 September 2026, based on the CGST Act and Rules as amended, the Finance Act 2026, and the ICAI Handbook on Refunds under GST (January 2026). Verify current notifications before filing.