Article explains What is Refund of TAx Under GST, Refund Scenarios Under GST, Time Limit of GST Refund, Procedure for GST Refund, Maximum Input We Can Claim For GST Refund and Points To Be Considered For Smooth GST Refund.

What is Refund of Tax Under GST:

-Refund refers to any amount that is due to any person from the tax department.

-Under GST refund of tax means the amount accumulated with the GST Department which is being reflected in the credit ledger of the tax payer can be applied for refund in the specified circumstances


Refund Scenarios Under GST:

  • Zero rated supplies: It covers two type of supply e., Export of Goods & Services and Supplies to SEZ. In both cases supply can be made with and without payment of tax. If goods are exported without payment of tax then supplier should have LUT which can be applied on GST portal through supplier’s User ID.
  • Inverted Duty Structure: As the name suggest “Inverted” means reverse In this case GST rate on Purchase is higher than GST rate on supply of goods or services due to which input amount gets accumulated.

Note: There are few other cases too in which we can claim refund but they are

  • Excess cash balance in cash ledger
  • Refund of Pre-deposit for filing appeal including refund arising in pursuance of an appellate authority’s order, etc.

Time Limit of GST Refund:

For claiming of refund of tax an application has to be made within 2 years from the relevant date.

Relevant Date:

(a) Goods exported outside India:

  • if the goods are exported by sea or air, the date on which the ship or the aircraft leave India; or
  • if the goods are exported by land, the date on which such goods pass the frontier; or
  • if the goods are exported by post, the date of dispatch of goods by the Post Office concerned to a place outside India

(b) Services exported outside India:

  • receipt of payment in convertible foreign exchange, where the supply of services had been completed prior to the receipt of such payment; or
  • issue of invoice, where payment for the services had been received in advance prior to the date of issue the invoice;

(c) Deemed Export: The date on which the return relating to such deemed export is

Procedure for GST Refund:

In GST application for refund is filed online, there is no provision to file application offline. Here we will discuss process step-wise:

1. We have to Login through applicant User ID on GST

2. Services > Refund > New Application > Select type of refund

3. Period for which refund is applied is

4. An excel sheet in form of json file is uploaded in which we have to mention invoice date, invoice , invoice amount, in case of export of goods we have to mention Shipping Bill no., Shipping Bill Date, EGM No., EGM Date. But in case of export of services FIRC Reference no. is required.

5. We have to upload all invoices on which GST input has been

Maximum Input We Can Claim For GST Refund:

Maximum refund = (Turnover of Zero-rated supply of goods + Turnover of Zero-rated supply of services) x Net ITC / Adjusted Total Turnover

  • Net ITC means input tax credit availed on inputs and input services during the relevant period
  • Turnover of zero-rated supply of goods means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking
  • Turnover of zero-rated supply of service means the value of zero-rated supply of services made without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:- Zero-rated supply of services is the aggregate of the payments received during the relevant period for zero-rated supply of services and zero-rated supply of services where supply has been completed for which payment had been received in advance in any period prior to the relevant period reduced by advances received for zero-rated supply of services for which the supply of services has not been completed during the relevant period
  • Adjusted Total turnover means the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the value of exempt supplies other than zero-rated supplies, during the relevant period

Points To Be Considered For Smooth GST Refund:

There are various miss-matches while we claim for GST refund because GST Department matches data from different sources i.e.., GSTR-1, Bill of Entry, EGM, FIRC.

Therefor we should file our GSTR-1 very carefully and should fill all the details in GSTR-1 required for GST refund.

  • While filling GSTR-1 it is not mandatory to fill Port Code, Shipping Bill , Shipping Bill Date but if you don’t fill this detail your refund will be delayed.
  • If you have not filed above mentioned details in GSTR-1 then you can amend your GSTR-1 within prescribed time
  • You should also check that custom department has uploaded correct information on icegate by making login on is
  • We should reconcile GST Input taken in returns with GSTR-2A, as department will allow only 110% of input reflecting in GSTR-2A
  • In case of supplies of services made to SEZ, a declaration from the Zonal officer of GST is required that services have been utilized in
  • A certificate issued by CA or CWA will be required if the refund amount is greater than Rs 2
  • You cannot charge GST on export /SEZ

You may contact the author and the team at [email protected] or call/whatsapp at 9953247264 to discuss anything related to this writeup and assistance needed.

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  1. sunil JB says:

    in above article you have mentioned that We should reconcile GST Input taken in returns with GSTR-2A, as department will allow only 110% of input reflecting in GSTR-2A.

    in this regard, as per Circular No.135/05/2020 – GST dated 31.03.2020 it is clarified that
    “5.2 The matter has been examined and it has been decided that the refund of accumulated ITC shall be restricted to the ITC as per those invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant. Accordingly, para 36 of the circular No. 125/44/2019-GST, dated 18.11.2019 stands modified to that extent.”

    so what amount we consider in Net ITC ?

  2. Jayanta Sengupta says:

    Dear Sir
    We have exported our service by paying GST, my quarry – in your article you told all input bills we need to upload , what input bill will be in our case. We are a software service provider .
    Thanks in advance
    Waiting for your reply
    With best regards

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May 2021