GST Refund Sanctioned but 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.
A sanction order feels like the finish line, so it is frustrating when the bank statement shows nothing weeks later. In GST, sanction and payment are two separate legal steps, and the money can stall between them for several distinct reasons. Each reason leaves a different trace on the portal, so you can usually identify yours in a few minutes.
RFD-06 (or RFD-04 for provisional refund) decides the amount; the money moves only after a payment order in RFD-05 is issued and PFMS validates your bank account and disburses. The common reasons for "sanctioned, not received" are: no RFD-05 yet, PFMS validation failure, an invalidated payment order, a payment order needing revalidation in a new financial year, adjustment against dues in the RFD-06, a withholding in RFD-07, or a bank-side posting problem. Interest under s.56 runs until the amount reaches your bank.
First, read the sanction order properly
Before chasing anyone, open the RFD-06 and check three figures:
- Amount sanctioned, which may be less than claimed;
- Amount adjusted against outstanding demand, which never reaches your bank; and
- Balance refundable, the only figure the RFD-05 will carry.
Adjustment of refund against an outstanding demand, whether partial or complete, is made in the RFD-06 itself, and the handbook confirms that demands under the pre-GST laws can also be adjusted. Many "missing" refunds are actually adjusted refunds. If the balance refundable is nil, the enquiry ends here and the question becomes whether the demand was correct. Our guide checking the GST refund amount after sanction walks through each line.
The seven causes and how to spot them
| # | Cause | What you will see | Fix |
|---|---|---|---|
| 1 | RFD-05 not yet issued | RFD-06 in the tracker, no payment order | Follow up with the officer; ask for RFD-05 |
| 2 | Bank account not validated by PFMS | Validation error on the post-login refund dashboard | REG-14 non-core amendment; re-select the account |
| 3 | RFD-05 invalidated after issue | Payment order shown as invalid; later a new reference | Correct bank details; officer reissues RFD-05 |
| 4 | RFD-05 not disbursed within the same FY | Payment order dated in an earlier FY, no credit | Ask the officer to revalidate (Rule 92(4) proviso) |
| 5 | Adjusted against dues | RFD-06 shows adjustment; balance lower or nil | Verify the demand; contest if wrong |
| 6 | Withheld | RFD-07 Part A with reasons | Cure the cause (return, dues) or seek Part B release |
| 7 | Bank-side posting delay | Portal shows disbursed | Take the payment details to your bank branch |
If you cannot tell which of these applies, our GST refund status support team reads the order trail and the PFMS response and tells you which step broke.
Cause 1: no payment order yet
The sanction order and the payment order are separate documents. Both are issued by the same officer for all tax heads, but they are still two steps. The handbook records CBIC's instruction that officers issue RFD-06 and RFD-05 within 45 days of the ARN so that disbursement can be completed within 60 days. If you have an RFD-06 but no RFD-05 after a reasonable time, a polite written reminder to the officer, citing the ARN and order number, is the right first move.
Causes 2 and 3: PFMS will not accept the bank account
The officer can issue RFD-05 only after PFMS validates the bank account selected in the refund application. When PFMS rejects it, an error is posted on your dashboard. The prescribed fix is a non-core amendment in REG-14, either correcting the existing account or adding a new one, then selecting it from the drop-down on the refund dashboard so that PFMS can validate it again. The full walkthrough is in PFMS bank account validation failed.
Occasionally the failure comes after the RFD-05. The portal then invalidates the payment order, and after you correct the details, the officer issues a new RFD-05 with a new reference number. The ARN, sanction order number and amount do not change.
Cause 4: the financial year turned over
Under the proviso to Rule 92(4) (and Rule 91(3) for provisional refunds), a payment order must be revalidated if the refund is not disbursed in the same financial year in which it was issued. A refund sanctioned in late March and caught in a validation problem can therefore sit untouched in April until the officer revalidates it. The sanction orders themselves (RFD-04 and RFD-06) do not need revalidation.
Causes 5 and 6: adjustment and withholding
Section 54(10) allows the officer to withhold a refund where you have not filed a return, or to deduct unpaid tax, interest or penalty that has not been stayed by the last date for appeal. Section 54(11) allows the Commissioner to withhold where an appeal or other proceeding is pending and the refund may harm the revenue because of malfeasance or fraud. Withholding is ordered in RFD-07 Part A, with reasons; release is in Part B. See refund withheld under s.54(10) and 54(11).
Cause 7: disbursed, but not in the account
PFMS reports the disbursement to the GST portal, which shows it on the tracker and notifies you by email/SMS. If the portal says disbursed and the bank disagrees, the problem is with the bank credit, not with GST. Take the details shown on the portal to the branch.
Interest: the delay has a price for the department
Section 56 gives interest at 6% p.a. where a refund is not paid within 60 days from the date of receipt of the application, running until the date the amount is credited to your bank, not the date of sanction. Where the refund arises from an appellate or court order, the rate is 9%.
Illustration: Refund of ₹6,00,000 on an application received 1 June. Sanction 15 July, but the RFD-05 is held up and the money is credited on 29 September. Day 60 ends on 31 July, so interest runs for 60 days (1 August to 29 September). Interest ≈ ₹6,00,000 × 6% × 60/365 ≈ ₹5,918.
Keep a record of when you corrected any bank details; where your own details caused the delay, expect the officer to take that into account.
Need help getting a sanctioned refund paid?
A sanctioned refund that never arrives is usually stuck on a fixable procedural step: a missing payment order, a PFMS rejection or a revalidation. We identify the step, file the REG-14 correction where needed, and follow up with the officer until the credit lands. See GST refund status support or our overall GST refund service.
Key takeaways
- Sanction (RFD-06/RFD-04) and payment (RFD-05 + PFMS) are separate steps.
- Check the RFD-06 for adjustments before assuming the money is missing.
- PFMS validation failures are fixed through a REG-14 non-core amendment and re-selection.
- A payment order not disbursed in the same financial year must be revalidated.
- Interest runs until the bank credit, at 6% (9% where the refund flows from an appellate or court order).
Read next
- RFD-05 payment order explained
- PFMS GST refund status: how to check
- Section 56: interest on delayed refunds
- Refund adjusted against demand: RFD-07
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.