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.
If you booked an under-construction flat, paid instalments with GST, and the booking was later cancelled, the GST you paid is not lost. Either the builder refunds it with the rest of your money, or, if the builder can no longer adjust it, you can claim it directly from the government as an unregistered person.
If the builder is still within the s.34 credit-note window (30 November after the end of the financial year of the supply, or the annual return date if earlier), it should refund the GST itself. If that window has closed and the builder returns only the base amount, you can claim the GST under s.54(1) by taking a temporary registration with your PAN and filing RFD-01 under "Refund for Unregistered Person" with Statement 8 and a supplier certificate (Rule 89(2)(ka), (kb)). The two-year limit runs from the date of the builder's cancellation letter (Circular 188/20/2022-GST). Only the proportionate GST is refunded if the builder returned part of the money.
Why home buyers get stuck with the GST
GST applies to under-construction flats because the builder is supplying a construction service. A completed flat sold after the completion certificate is outside GST, so this issue arises only for bookings made before completion.
When a booking is cancelled, the builder returns the money. For the GST part, the builder normally issues a credit note under s.34 and reduces its own tax liability. But s.34 has a deadline: the credit note must be declared no later than 30 November following the end of the financial year in which the supply was made, or the date of the annual return, whichever is earlier. Many projects stall for years, so by the time of cancellation this window has often closed. The builder then refunds only the base amount, and the buyer bears GST on a flat never delivered.
Notification 26/2022-CT and Circular 188/20/2022-GST fixed this by letting the unregistered buyer claim directly.
Step 1: ask the builder first
| Situation | Who refunds the GST |
|---|---|
| Builder can still issue a credit note under s.34 | Builder refunds GST along with the base amount; no application by you |
| Credit-note window has lapsed; builder returns base amount only | You claim GST via temporary registration |
| Builder returns part of the base amount | You claim the proportionate GST |
| You are a registered business and took ITC | Different treatment; get specific advice |
The Handbook is clear that the buyer's claim is allowed only when the credit-note period has already lapsed. Get the builder's position in writing.
Step 2: temporary registration
On the GST portal, apply for temporary registration using your PAN, choosing the same State/UT as the builder's registration. The circular requires Aadhaar authentication and a bank account in your own name linked to your PAN. A separate application is needed for each builder, and for builders registered in different States.
Step 3: file RFD-01 under "Refund for Unregistered Person"
Your documents (Rule 89(2)(ka) and (kb)):
| Document | Purpose |
|---|---|
| Statement 8 (PDF) | Invoice-wise details: number, date, value, tax paid |
| Copies of invoices / demand letters with GST | Proof of tax charged |
| Proof of payment to the builder | Shows you bore the tax |
| Agreement or registered agreement | Proves the contract |
| Builder's cancellation or termination letter | Fixes the relevant date |
| Details and proof of amount refunded by the builder | For proportionate calculation |
| Supplier certificate (clause (kb)) | Builder certifies it paid the tax, has not adjusted it by credit note, and has not claimed and will not claim refund |
A CA certificate on unjust enrichment is not required where an unregistered person who bore the tax is the claimant (second proviso to Rule 89(2)(m)). The claim cannot exceed the tax shown on the invoices. If you are unsure how to prepare Statement 8 or get the builder's certificate, our excess tax paid refund service handles these claims end to end.
Step 4: time limit and relevant date
For a person other than the supplier, the normal relevant date is the date of receipt of goods or services. A cancelled flat was never delivered, so Circular 188/20/2022-GST clarifies that the date of issuance of the cancellation letter by the supplier is the relevant date. You have two years from that date. Details on limitation are in relevant date for a GST refund claim.
Worked examples
Illustration 1: full refund of base amount. Instalments paid: ₹40,00,000 + GST ₹2,00,000. Builder cancels in 2026 and refunds ₹40,00,000; its credit-note window for the earlier years has closed. Refund claim = ₹2,00,000.
Illustration 2: partial refund of base amount. Same facts, but the builder deducts a cancellation charge and returns ₹30,00,000 of the ₹40,00,000. Proportionate GST = ₹2,00,000 × 30,00,000 ÷ 40,00,000 = ₹1,50,000.
Illustration 3: small claim. If the proportionate GST works out below ₹1,000, no refund is paid (s.54(14)).
What happens after filing
The officer processes the claim like any other RFD-01: acknowledgement or deficiency memo within 15 days (Rule 90), and a final order in RFD-06 with a detailed speaking order. If anything is to be disallowed, you must first get a notice in RFD-08 and a chance to reply and be heard (Rule 92(3)). The refund is credited to your PAN-linked bank account. You can track it with the ARN at gst.gov.in → Services → Refunds → Track Application Status; see GST refund status check.
Common problems
- Builder will not give the certificate. The certificate is a required document. Send a written request citing Circular 188/20/2022-GST and Rule 89(2)(kb); keep the correspondence.
- Builder's GSTIN is cancelled. Get advice; the claim depends on proving the tax was paid.
- Cancellation letter is undated or missing. The relevant date depends on it. Ask for a formal letter.
- Invoices were not issued for some instalments. The claim is limited to tax shown on invoices.
- Both spouses paid. File in the name of the person whose PAN and bank account match the payments and the agreement; get advice for joint bookings.
Long-term insurance policies terminated early follow the same route. See GST refund on contract cancellation for unregistered persons.
Need help recovering GST on a cancelled flat?
If your builder has returned your money but kept the GST, we can check whether the credit-note window has closed, take the temporary registration, obtain the supplier certificate and file RFD-01 within the two-year window. See our GST refund support for excess tax paid, or the broader GST refund service.
Key takeaways
- Ask the builder first: within the s.34 window, it must refund the GST itself.
- After that window closes, the buyer claims via temporary registration and RFD-01 with Statement 8.
- The builder's certificate under Rule 89(2)(kb) is essential.
- Two years run from the date of the builder's cancellation letter.
- Partial refund of the base amount means proportionate GST refund; no CA certificate is needed.
Read next
- GST refund with temporary registration
- Can an NRI claim GST refund?
- Refund of tax on a cancelled supply and advances
- Can an individual claim GST refund?
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.