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.
Exports are zero-rated under GST, so an exporter should not end up carrying the tax. You get it back in one of two ways: pay IGST on the export and have it refunded, or export under a Letter of Undertaking (LUT) and claim a refund of the input tax credit that builds up. This guide explains both routes, the forms and the time limits, and what changed in 2026.
Exports are zero-rated supplies under section 16 of the IGST Act. For goods exported with payment of IGST, the shipping bill is treated as the refund application (Rule 96), and Customs pays the refund once the export manifest is filed and GSTR-1/GSTR-3B match. Goods and services exported under LUT (FORM GST RFD-11) go through FORM GST RFD-01, where accumulated ITC is refunded using the Rule 89(4) formula. Every claim must be filed within two years of the relevant date.
Two routes to a GST refund for exporters
Section 16(3) of the IGST Act lets a registered person make zero-rated supplies without paying IGST, under bond or LUT, and claim a refund of the unused ITC. Section 16(4) lets the Government notify the goods or services that can be exported on payment of IGST with the tax refunded. Notification 01/2023-Integrated Tax allows all goods and services on the IGST route except the goods listed in its table. Customs checks this at shipping-bill level, so a shipping bill with even one restricted item cannot be filed on the IGST route.
| Point | Export with payment of IGST | Export under LUT / bond |
|---|---|---|
| What is refunded | The IGST paid on the export | Unused ITC (inputs and input services) |
| Application (goods) | Shipping bill, deemed application under Rule 96 | FORM GST RFD-01 with Statement 3 |
| Application (services) | FORM GST RFD-01 (Rule 96(9)) | FORM GST RFD-01 with Statement 3 |
| Who processes it | Customs (ICES) for goods; GST officer for services | Jurisdictional GST officer |
| ITC on capital goods | Can be used to pay the IGST | Excluded from "Net ITC" in the formula |
| Main risk | Mismatch between GSTR-1 and shipping bill blocks the refund | Formula caps, document gaps, deficiency memos |
If you are still choosing a route or a claim is stuck, our export refund team handles both the ICEGATE side and the RFD-01 side.
Route 1: IGST paid on exports of goods
Under Rule 96(1), the shipping bill is deemed to be the refund application. It counts as filed only when:
- the carrier has filed the export manifest or export report covering the shipping bill;
- you have filed a valid GSTR-3B for the period; and
- you have completed Aadhaar authentication where it applies.
If the shipping bill data does not match GSTR-1 (or GSTR-1A), the application is treated as filed only on the date you fix the mismatch. That date then matters for limitation.
In practice, report every export invoice in Table 6A of GSTR-1 with the port code, shipping bill number and date, and show the IGST in Table 3.1(b) of GSTR-3B. The GST portal will not transmit the record to Customs if the IGST in 3.1(b) is less than the IGST claimed in Table 6A. Once the record reaches ICES and matches the shipping bill, the refund is paid through a payment scroll to the bank account registered with Customs. How to read the stages is covered in IGST refund status on ICEGATE.
Route 2: Exports under LUT and the RFD-01 claim
Under Rule 96A, you file the LUT in FORM GST RFD-11 on the portal before exporting. It is accepted as soon as the ARN is generated and is valid for the financial year. Persons prosecuted for tax evasion above ₹250 lakh must furnish a bond with a bank guarantee instead.
The refund of accumulated ITC is calculated under Rule 89(4):
Refund = (Turnover of zero-rated goods + Turnover of zero-rated services) × Net ITC ÷ Adjusted Total Turnover
For goods, the export value is the lower of the FOB value in the shipping bill and the invoice value, and it is further capped at 1.5 times the value of like goods supplied domestically. For services, the export turnover is based on payments received during the period.
Illustration: In a quarter, export turnover (lower of FOB and invoice) is ₹60 lakh, domestic turnover is ₹40 lakh and Net ITC on inputs and input services is ₹9 lakh. Refund = 60 × 9 ÷ 100 = ₹5.4 lakh. The remaining ₹3.6 lakh of credit stays in the ledger for domestic output tax.
You can check the arithmetic on the GST refund calculator. A full walk-through is in GST refund calculation for export without payment.
Time limits and what counts as the relevant date
The two-year limit under section 54(1) runs from the relevant date in Explanation 2:
| Export type | Relevant date |
|---|---|
| Goods by sea or air | Date the ship or aircraft leaves India |
| Goods by land | Date the goods cross the frontier |
| Goods by post | Date the Post Office despatches the goods abroad |
| Services | Date the payment is received in convertible foreign exchange (or INR where RBI permits); invoice date if paid in advance |
The period from 01.03.2020 to 28.02.2022 is excluded when computing limitation (Notification 13/2022-CT).
Conditions exporters overlook
- Realisation of proceeds. Services qualify as exports only when payment is received (BRC, FIRC or e-BRC). For goods, Rule 96B requires you to repay the refund with interest if the proceeds are not realised within the FEMA period, unless RBI writes off the requirement.
- Unexported goods under LUT. Under Rule 96A, if goods are not exported within three months of the invoice, or payment for services is not received within one year (or the FEMA period, if later), IGST with interest becomes payable. Circular 197/09/2023-GST confirms that once the export happens, the IGST paid can be refunded, but the interest cannot.
- Drawback of central tax. The third proviso to section 54(3) bars an ITC refund if you avail drawback of central tax or claim IGST refund on the same supplies. Drawback limited to customs duties does not bar it.
- Rejected ITC is not re-credited automatically on the IGST route. Accuracy at the filing stage saves months of follow-up.
Processing timelines and the 2026 position
For RFD-01 claims, the officer issues an acknowledgement or a deficiency memo within 15 days (Rule 90). Zero-rated claims are eligible for a 90% provisional refund under section 54(6). From 01.10.2025, Rule 91(2) provides for that provisional order in RFD-04 within 7 days of acknowledgement, based on system-based risk evaluation. Higher-risk applicants may not be cleared automatically. Final sanction is due within 60 days of a complete application (section 54(7)), and interest at 6% runs after that.
Two further 2026 changes affect exporters:
- Intermediary services. Section 13(8)(b) of the IGST Act was omitted with effect from 30.03.2026. Intermediary services supplied to overseas clients on or after that date can now qualify as exports. See intermediary services and GST refund in 2026.
- Minimum refund amount. The Finance Act 2026 removes the ₹1,000 minimum in section 54(14) for export-with-payment refunds. This has been enacted but is not yet in force, pending notification.
Need help with an export refund?
Most export refunds get stuck on data rather than law: a shipping bill that does not match Table 6A, an EGM that never reached the system, or a Statement 3 the portal rejects. We reconcile the export register against GSTR-1, GSTR-3B and ICEGATE, fix what needs fixing and follow the claim through to credit. Start with our GST refund on exports service, or see the wider GST refund support page.
Key takeaways
- Exports are zero-rated, and refunds come either as IGST refunded through the shipping bill or as accumulated ITC refunded through RFD-01 under LUT.
- On the IGST route, GSTR-1 Table 6A, GSTR-3B Table 3.1(b), the shipping bill and the EGM must all agree.
- On the LUT route, the Rule 89(4) formula applies: lower of FOB and invoice value, a 1.5× cap for goods, and no capital goods in Net ITC.
- Two years from the relevant date is the outer limit, and a mismatch pushes the deemed filing date forward.
- For 2026: the intermediary place-of-supply rule is omitted from 30.03.2026, and the removal of the ₹1,000 floor awaits notification.
Read next
- Rule 96: shipping bill as refund application
- How to claim a GST refund on exports without payment (LUT)
- IGST refund shipping bill error codes
- GST refund on export of services
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.