IGST 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.
For almost seven years, Rule 96(10) of the CGST Rules stopped certain exporters from claiming refunds of IGST paid on exports. It was aimed at exporters who had already enjoyed a tax concession on their inputs. Notification No. 20/2024-Central Tax dated 08.10.2024 omitted it, along with Rules 89(4A) and 89(4B). This guide explains what the rule barred, who can now use the IGST route, and how old cases stand.
Rule 96(10) denied refund of IGST paid on exports to exporters who had received inputs at concessional rates (Notn 40/2017-CT(R), 41/2017-IT(R)), deemed-export supplies (Notn 48/2017-CT), or imported inputs without duty under Notn 78/2017-Customs (EOU) or 79/2017-Customs (Advance Authorisation), with an exception for EPCG capital goods. Notification 20/2024-CT omitted it with effect from 08.10.2024. Such exporters can now pay IGST on exports and get the refund through the shipping bill route. The omission is prospective, but the Bombay High Court (Yasho Industries) has held that proceedings under the omitted rules abate, except matters that are past and closed.
What Rule 96(10) said
In its final form, the rule said that a person claiming refund of IGST paid on exports of goods or services should not have:
| Barred if the exporter had… | Notification | Exception |
|---|---|---|
| received supplies as deemed exports | 48/2017-Central Tax | Capital goods under EPCG |
| received supplies at the concessional merchant-export rate | 40/2017-Central Tax (Rate) / 41/2017-Integrated Tax (Rate) | None |
| imported inputs as an EOU | 78/2017-Customs | Capital goods under EPCG |
| imported inputs under Advance Authorisation (or EPCG) | 79/2017-Customs | Capital goods under EPCG |
The logic: an exporter whose inputs were already exempted or taxed at a token rate should not also pay IGST on the export out of ITC and take that IGST back in cash. Such exporters were expected to export under LUT, and Rules 89(4A) and 89(4B) gave them a limited ITC refund instead.
An Explanation to the rule also provided that the benefit of the customs notifications was not treated as availed where the exporter had paid the integrated tax on the imported inputs. Circular 233/27/2024-GST later clarified that where inputs were imported under 78/2017 or 79/2017-Customs, but the IGST and cess were subsequently paid and the bill of entry reassessed, the IGST refund on the related exports is not a violation of Rule 96(10).
What changed on 08.10.2024
The GST Council, at its 54th meeting, recommended prospectively omitting Rules 96(10), 89(4A) and 89(4B), noting the difficulties exporters faced and aiming to simplify and speed up export refunds. Notification No. 20/2024-CT dated 08.10.2024 did so, and consequentially tidied the Rule 89(4) and 89(5) definitions that had carved out 89(4A)/(4B) turnover and credit.
Who is now eligible for IGST-paid export refunds:
- Advance Authorisation holders importing inputs without duty under Notn 79/2017-Customs;
- EOUs importing under Notn 78/2017-Customs;
- exporters buying from domestic suppliers at the concessional merchant-export rate (0.05% intra-State / 0.1% inter-State);
- exporters receiving deemed-export supplies under Notn 48/2017-CT.
They can now choose, invoice by invoice, between LUT and payment of IGST, like any other exporter. The IGST route is useful where ITC is large and the exporter wants the automatic Customs refund rather than an RFD-01 claim.
If you have been exporting under LUT only because of Rule 96(10), our IGST export refund team can check whether switching routes makes sense for your cash flow.
How the IGST refund works now
The mechanics are the standard Rule 96 route. The shipping bill is deemed to be the refund application once the carrier files the manifest and you file a valid GSTR-3B. GSTR-1 Table 6A must match the shipping bill, and IGST in GSTR-3B 3.1(b) must be at least the amount in Table 6A. The refund is paid by Customs to the bank account registered with Customs, after PFMS validation.
Three limits still apply regardless of Rule 96(10):
- Restricted goods: Notification 01/2023-Integrated Tax lists goods that cannot be exported on payment of IGST.
- Export duty: section 54(15), in force from 01.11.2024, bars both ITC and IGST refunds on zero-rated goods subject to export duty.
- Withholding: Rule 96(4) still allows Customs to withhold the refund on a request from the GST Commissioner under section 54(10)/(11), where the goods are exported in violation of the Customs Act, or pending risk-based verification. See IGST refund withheld: risky exporter verification.
Illustration: An Advance Authorisation holder imports inputs worth ₹2 crore without duty and exports finished goods worth ₹5 crore in November 2026. Domestic inputs and services carry ITC of ₹40 lakh.
- Before 08.10.2024: IGST route barred; LUT plus a restricted Rule 89(4B) claim.
- Now: pay IGST on the export invoices, say ₹40 lakh from the ITC ledger at an illustrative rate (check the current rate schedule), and receive ₹40 lakh through the shipping bill route once the records validate.
Transition points
Exports before 08.10.2024. The omission was prospective. The ICAI background material notes that, since Notification 20/2024 carried no savings clause, the treatment of past proceedings was contested.
Yasho Industries (Bombay HC). In a batch of petitions including Mylan Laboratories, the Bombay High Court quashed show cause notices and orders issued under Rules 96(10) and 89(4B). It accepted that, in the absence of a savings clause, proceedings under the omitted rules abate, since section 6 of the General Clauses Act does not extend to repeal by delegated legislation. The court clarified that the ruling applies to proceedings initiated or continued before or after the omission, but not to matters already past and closed. The department may pursue this further; check the position in your jurisdiction before relying on it.
Old voluntary repayments. Circular 174/06/2022-GST had set out how exporters who received IGST refunds in breach of Rule 96(10) could pay the amount back with interest through DRC-03 and have the ITC re-credited in PMT-03A. If you paid back under that circular, the matter is likely closed; take advice before trying to reopen it.
Pending show cause notices. Reply citing the omission and the Bombay High Court ruling, and keep the matter alive rather than conceding.
Model the choice between routes with the GST refund calculator.
Need help after the Rule 96(10) omission?
Two groups need attention: exporters still exporting only under LUT from habit, and exporters facing old Rule 96(10) demands. We review the import licences and supply notifications, set the right route for new exports, and draft replies on pending notices. See our IGST export refund service, and for disputed cases our GST notices and litigation support.
Key takeaways
- Rule 96(10), along with Rules 89(4A) and 89(4B), was omitted by Notification 20/2024-CT with effect from 08.10.2024.
- AA holders, EOUs, merchant-export buyers and deemed-export recipients can now claim IGST refunds on exports.
- The standard shipping bill route applies; Table 6A must match the shipping bill.
- Restricted goods, export-duty goods (s.54(15)) and Rule 96(4) withholding still limit the IGST route.
- For past periods, the Bombay High Court held that proceedings under the omitted rules abate, except matters past and closed.
Read next
- Rule 96: the shipping bill as refund application
- Rule 89(4A) and 89(4B): advance authorisation and EOU suppliers
- Merchant exports at 0.1% and the refund consequence
- IGST refund status on ICEGATE
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.