Partial Refund Sanction 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 partial refund sanction means the officer has accepted part of your claim and rejected the remainder in the same RFD-06 order. The sanctioned part moves to payment. The rejected part has its own path: you either accept it and get the ITC back in your credit ledger, or appeal it. Choosing between those two, and doing so on time, decides how much of the claim you eventually recover.
Under Rule 92(3), the officer can reject the whole or any part of a claim only after issuing RFD-08 and considering your RFD-09 reply; the result is an RFD-06 sanctioning in whole or in part. The sanctioned amount is paid through RFD-05. Under Rule 93(2), ITC debited for the rejected part is re-credited by PMT-03, but only after you undertake not to appeal or the appeal is finally decided. If a provisional refund was higher than what is finally admissible, the excess is recovered as an erroneous refund. The appeal window is three months from communication (section 107).
How a partial sanction comes about
A partial sanction is not supposed to arrive by surprise. The rule requires a notice in RFD-08 for "the whole or any part" of the amount that the officer finds inadmissible, a reply window of fifteen days, and an opportunity of being heard. If part of your claim was cut without an RFD-08 or a hearing, that is itself a ground of appeal; see refund rejected without personal hearing.
Common reasons for a partial cut:
| Reason | Typical effect |
|---|---|
| ITC not reflected in GSTR-2B | Net ITC reduced in the formula |
| Turnover figures differ from returns | Adjusted total turnover recomputed |
| Some shipping bills or invoices outside the period | Zero-rated turnover reduced |
| Export value above 1.5 times domestic value | Turnover capped under Rule 89(4) |
| Input services or capital goods in an inverted-duty claim | Net ITC reduced |
| Part of the claim beyond two years | That part rejected as time barred |
If you want a second view on whether the cut part is worth contesting, our refund rejection support can review the order and the RFD-08 trail.
What happens to each part
Sanctioned part. Paid through RFD-05 to the bank account in your registration and application. If it is paid more than 60 days after the application, interest under section 56 applies at 6% per annum. Track it through refund status.
Rejected part (accepted by you). Give the undertaking not to appeal. The officer then re-credits the debited ITC through PMT-03, and you can use it for output tax. This does not turn the credit into cash.
Rejected part (appealed). The ITC stays debited while the appeal is pending. If you win, you file a fresh claim under the category "Refund on account of assessment/provisional assessment/appeal/any other order". The Handbook, citing Circular 111/30/2019-GST, notes that you need not debit the amount again because it was never re-credited.
Ineligible ITC. Where the officer treats part of the credit as ineligible, the RFD-08 and RFD-06 may be issued under section 54 read with section 73 or 74, and the ineligible ITC with interest and penalty can be entered in your liability register through DRC-07.
Worked examples (illustration)
The ICAI Handbook uses two small examples. Scaled up:
Example 1: provisional refund exceeds final entitlement. A zero-rated refund of Rs 10,00,000 is claimed. Rs 9,00,000 (90%) is paid provisionally through RFD-04. On final examination, only Rs 7,00,000 is admissible.
- Rejected: Rs 3,00,000.
- Excess already paid: Rs 9,00,000 − Rs 7,00,000 = Rs 2,00,000, which the RFD-08 proposes to recover under section 73 or 74 with interest.
Example 2: accumulated ITC claim partly cut. A claim of Rs 10,00,000 is sanctioned at Rs 8,00,000: Rs 1,50,000 rejected as ineligible ITC and Rs 50,000 for another reason.
- Rejected: Rs 2,00,000.
- Ineligible ITC of Rs 1,50,000 can be demanded through DRC-07 with interest and penalty if the notice is decided against you.
- The Rs 2,00,000 is re-credited through PMT-03 only after an undertaking not to appeal or a final appellate decision.
Accept or appeal? A quick decision frame
| Question | Lean towards accepting | Lean towards appealing |
|---|---|---|
| Is the cut a clear factual error (wrong figure, missed document)? | Yes | |
| Is it a genuine missing-supplier 2B issue? | Yes | |
| Is the rejected ITC easily usable against output tax soon? | Yes | |
| Does the cut rest on a legal view you dispute (formula, relevant date)? | Yes | |
| Is recovery of ineligible ITC with penalty also proposed? | Usually yes, at least on that limb |
You can also split: accept a small, clearly valid cut and appeal the rest. State the split precisely in the undertaking and the appeal.
Steps after a partial sanction
- Download the RFD-06, the RFD-08 and your RFD-09 reply.
- Reconcile the rejected amount line by line against the grounds in the order.
- Recompute with the GST refund calculator to confirm the officer's arithmetic.
- Decide accept or appeal for each ground within the three-month window.
- Track the sanctioned part to the bank, and follow up on PMT-03 for any accepted rejection.
Need help with a partial refund sanction?
A partial order is two decisions in one, and the rejected part is often where the recoverable money is. We can reconcile the order, advise which grounds are worth an appeal, draft the appeal and follow the PMT-03 re-credit on the rest. See our GST refund rejection and appeal support.
Key takeaways
- A partial sanction is an RFD-06 that allows part of the claim and rejects part, after RFD-08 and a hearing.
- The sanctioned part is paid via RFD-05; interest applies beyond 60 days.
- Rejected ITC is re-credited via PMT-03 only after an undertaking not to appeal or a final appellate decision.
- Excess provisional refund is recovered as erroneous refund under section 73 or 74.
- After a successful appeal, file a fresh claim under the appeal/order category without re-debiting.
Read next
- Re-credit of rejected refund through PMT-03
- RFD-08 show cause notice reply format
- Refund on account of an appellate or court order
- 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.