Rule 96B 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.
An exporter claims a refund, receives it, and the overseas buyer never pays. The goods have gone, the tax has been refunded, and no foreign exchange has come in.
Rule 96B unwinds it.
Rule 96B(1): where any refund of unutilised input tax credit on account of export of goods, or of integrated tax paid on export of goods, has been paid, but the sale proceeds have not been realised in full or in part in India within the period allowed under the Foreign Exchange Management Act, 1999, including any extension, the person shall deposit the amount so refunded, to the extent of non-realisation, along with applicable interest, within thirty days of the expiry of that period — failing which the amount is recovered under s.73, s.74 or s.74A as an erroneous refund, with interest under s.50.
What it covers
Export of goods only. The rule speaks of refund on account of export of goods and of IGST paid on export of goods. Services are dealt with through Rule 96A(1)(b), which requires the tax to be paid where the payment for services is not received within the FEMA period. Rule 96A: the LUT →
Both refund routes. Whether the exporter used the LUT route and claimed refund of unutilised credit under Rule 89(4), or the with-payment route under Rule 96, the recovery applies.
To the extent of non-realisation. Partial realisation produces a proportionate repayment, not a full one.
The thirty-day window
The obligation is to deposit — voluntarily, without a notice.
From: the expiry of the FEMA realisation period, including any extension allowed.
Within: thirty days.
With: applicable interest.
Missing the window converts a voluntary deposit into an erroneous refund recovery under s.73, s.74 or s.74A, with the penalty exposure those provisions carry.
The RBI write-off proviso
"Provided that where sale proceeds, or any part thereof, in respect of such export goods are not realised by the applicant within the period allowed under the Foreign Exchange Management Act, 1999, but the Reserve Bank of India writes off the requirement of realisation of sale proceeds on merits, the refund paid to the applicant shall not be recovered."
This is the escape route, and it is narrow:
"Writes off the requirement of realisation." Not a mere extension, and not a self-write-off in the books. It is an RBI or authorised dealer write-off under the FEMA framework, where the exporter has made all reasonable efforts to realise and the failure is on merits — buyer insolvency, war, government action in the buyer's country, and similar.
"On merits." A write-off obtained for convenience does not qualify.
Where the write-off is obtained, the refund stands and nothing is repayable.
Restoration on later realisation
Rule 96B(2): where the sale proceeds are realised by the applicant, in full or part, after the amount of refund has been recovered under sub-rule (1), and the applicant produces evidence about such realisation within a period of three months from the date of realisation of sale proceeds, the amount so recovered shall be refunded by the proper officer to the applicant, to the extent of realisation.
So the sequence can run: refund → non-realisation → repayment → later realisation → refund again.
The three-month window from the date of realisation is short, and it is the taxpayer's obligation to produce the evidence.
What "the period allowed under FEMA" means
Under the FEMA export regulations, the general realisation period is nine months from the date of export, with different periods for specified categories — units in SEZs, status holder exporters, and goods exported to a warehouse established outside India.
Extensions may be granted by the authorised dealer bank or the RBI, and an extension granted before expiry extends the Rule 96B clock with it.
The practical implication is that the Rule 96B trigger date is not a fixed number of months from export. It has to be computed per shipment, from the FEMA position for that category of exporter and that shipment, including extensions actually obtained.
Practical controls
- Maintain a shipment-level realisation tracker with the export date, the FEMA period, extensions obtained, and the realisation status.
- Reconcile to the bank's eBRC or FIRC records, which are the evidence of realisation.
- Diarise the FEMA expiry per shipment, and the thirty days after it.
- Apply for a FEMA extension before expiry where realisation is delayed — an extension prevents the Rule 96B trigger entirely.
- Where realisation has failed on merits, pursue the RBI write-off, and keep the documentation.
- Where the deposit becomes due, make it within thirty days — the difference between a voluntary deposit and an erroneous refund recovery is penalty exposure.
- On later realisation, claim within three months.
Key takeaways
- Rule 96B: refund on export of goods is repayable where proceeds are not realised within the FEMA period.
- Deposit within thirty days of expiry, with interest, or face recovery under s.73, s.74 or s.74A.
- Applies to the extent of non-realisation, so partial realisation produces a proportionate repayment.
- An RBI write-off on merits prevents recovery entirely.
- Later realisation allows the recovered amount to be refunded, on evidence produced within three months.
- The FEMA period is shipment-specific and extendable.
Read next
- Rule 96A: LUT and the Fifteen-Day Consequence
- Rule 96: The Shipping Bill as a Refund Application
- Export Refund: With-Payment and Without-Payment Routes
- Advance Payment from a Foreign Buyer: FEMA and GST
Disclaimer: Positions stated as on 5 September 2026, based on the CGST Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition) and the ICAI Handbook on Refunds under GST (January 2026). FEMA realisation periods and RBI write-off criteria are outside the GST law — verify them separately.