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.
Handicraft sellers, jewellery makers, D2C brands and marketplace sellers often ship abroad by courier or India Post rather than by container. The GST law does not have a separate refund scheme for parcels. A courier or postal export is an export of goods like any other, and the same two refund routes apply. What changes is the paperwork, and that is where small exporters lose refunds.
Goods sent abroad by courier or post are zero-rated exports under section 16 of the IGST Act. You can ship under LUT and claim accumulated ITC in RFD-01 (Rule 89(4)), or pay IGST and have the shipping bill or bill of export treated as the refund application (Rule 96). Either way the claim needs the export document number and date. For postal exports the relevant date for the two-year limit is the date the Post Office despatches the goods out of India. Goods restricted from the IGST route by Notification 01/2023-Integrated Tax cannot be exported on payment of IGST through any channel, including courier.
Courier and post are allowed export channels
The Foreign Trade Policy 2023 permits export through courier and post, and the ICAI FTP handbook records the per-consignment ceiling for courier-based e-commerce exports as raised from ₹5 lakh to ₹10 lakh. That value cap was later omitted from the Customs courier regulations with effect from 1 April 2026 by Notifications No. 33/2026 and 34/2026-Customs (N.T.). FTP 2023 also promotes Dak Niryat Kendras, which link artisans and small businesses to Foreign Post Offices.
For GST, what matters is that goods physically leave India under a customs export document: a shipping bill, a bill of export or, for post, a postal bill of export. Once they do, the supply is zero-rated.
Choosing the route for parcels
| Point | Under LUT (no IGST) | With payment of IGST |
|---|---|---|
| What you claim | Accumulated ITC on inputs and input services | IGST paid on each export invoice |
| Where you claim | RFD-01 on the GST portal | Shipping bill is the application; paid via Customs |
| Key documents | Statement 3 with export document number and date | GSTR-1 Table 6A and GSTR-3B 3.1(b) matching the export document |
| Main risk for parcels | Missing or unlinked export document numbers | Electronic data not reaching the Customs system |
The LUT route suits most small exporters. File RFD-11 at the start of the financial year, ship without IGST, and file RFD-01 periodically. Rule 89(2)(b) requires a statement of the number and date of shipping bills or bills of export along with the export invoices. For parcels, that means collecting every export document reference from your courier or post office and linking it to your invoice.
The IGST route works only when the export document is filed electronically and the carrier's departure or export manifest is filed. Rule 96(1) deems the shipping bill to be a refund application only when the person in charge of the conveyance files the manifest or export report and you have filed a valid GSTR-3B. Customs has also asked officers, especially for manual shipping bills at non-EDI locations and for exports through post and courier, not to allow IGST-paid export of goods restricted by Notification 01/2023-Integrated Tax.
Before choosing the IGST route for parcels, confirm with your courier or the post office that your consignment's export document will be filed electronically and that the IGST refund can flow through the Customs system. If not, the LUT route is the safer default. Our GST refund on exports team can look at your shipping pattern and set the route.
Relevant date and the two-year limit
Explanation 2(a) to section 54 fixes the relevant date for exported goods by mode:
| Mode | Relevant date |
|---|---|
| Sea or air (includes air courier) | Date the ship or aircraft carrying the goods leaves India |
| Land | Date the goods pass the frontier |
| Post | Date the Post Office despatches the goods to a place outside India |
The ITC refund must be filed within two years from that date. For postal exports, keep the despatch confirmation with each invoice.
Worked example
Illustration: A Jaipur jewellery seller ships 400 parcels by air courier in a quarter under LUT. Export value is ₹30 lakh, domestic sales are ₹20 lakh and Net ITC on inputs (silver, packaging, courier charges billed with GST) is ₹2 lakh.
- Refund = 30 × 2 ÷ 50 = ₹1.2 lakh.
- Rule 89(4) also caps the export turnover used in the formula at 1.5 times the value of like goods supplied domestically by the same or a similarly placed supplier. Keep your domestic price list handy.
- Statement 3 must list 400 invoice–export document pairs. The refund is only as good as that reconciliation.
Try your own numbers on the GST refund calculator.
Where courier export refunds get stuck
Export document numbers not captured. The courier files the document, but the seller never receives or records its number. Ask for a report of export document numbers and dates for every consignment.
Consolidated documents. Where one export document covers many invoices, each invoice must still be traceable to it. Keep the courier's mapping.
Returns mismatch on the IGST route. GSTR-1 Table 6A must match the export document at invoice level, and IGST in GSTR-3B 3.1(b) must not be less than the refund claimed in Table 6A. Errors are corrected through Table 9A of a later GSTR-1.
Restricted goods. If an invoice on an export document covers goods restricted from the IGST route, the IGST-paid document cannot be filed. Use the LUT route for those goods.
Goods subject to export duty. Section 54(15), inserted by the Finance (No. 2) Act, 2024 with effect from 01.11.2024, bars both ITC refund and IGST refund where the zero-rated goods are subject to export duty.
Unrealised proceeds. Payments collected through marketplaces or gateways must be realised within the FEMA period. Rule 96B recovers refunds where they are not.
Need help with a courier or postal export refund?
Small-parcel refunds are usually lost to reconciliation, not to the law: hundreds of invoices, a courier report in a different format, and a Statement 3 that does not tie out. We rebuild the invoice-to-export-document map, choose the right route and file the claim. Start with our GST refund on exports service, or see export refund under LUT if you already ship without IGST.
Key takeaways
- Courier and postal exports are ordinary zero-rated exports of goods; both refund routes apply.
- The LUT route needs the export document number and date for every invoice (Rule 89(2)(b)).
- The IGST route works only if the export document and manifest reach the Customs system electronically.
- For postal exports, the two-year clock starts on the date the Post Office despatches the goods.
- Restricted goods under Notification 01/2023-IT and goods subject to export duty cannot use the IGST refund route.
Read next
- GST refund for exporters: both routes explained
- IGST refund status on ICEGATE
- Rule 96: the shipping bill as refund application
- Statement 3 for GST refund on export without payment
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.