How to Claim Tax Refund under GST

By Registrationwala

6th May 2017


A Tax Refund alludes to any sum that is due or returnable to the individual from the tax division. There are particular situations in which refund is permitted and merchants can claim tax refunds in these situations, for example, excess payment of taxes, unutilized input tax credit by virtue of output supplies being exports. Rate of tax on inputs being higher than the rate of tax on outputs (Inverted duty structure), etc.

Tax Refund under current Regime

Refund of Tax in the current Regime is allowed in the following cases:-


  • Tax which is paid on purchasing goods and have been exported or on the inputs used to manufacture the goods exported
  • Input tax credit that has accumulated due to output supplies being only exports or zero rated supplies


  • VAT paid to purchase the goods which have been exported
  • If the input tax credit exceeds the tax payable on sales in a month, the excess credit will be carried over till the end of the financial year. Toward the finish of the financial year, the merchant has an alternative to claim the sum as refund or convey forward the input tax credit.

Service Tax

  • If there is excess service tax paid, where the excess payment cannot be balanced against a future tax accountability.
  • At the point when there is collected input tax credit utilised as a part of providing an output service which has been exported without paying the Service Tax.

Tax Refund under GST Regime

Tax refund that has been allowed under the GST regime is similar to the current regime. Below are the cases where refund is allowed under GST:-

  • Tax paid on the inward supply of goods or services benefits which have been exported on inputs or input services used in goods and/or services exported. Take note of that if the products are subjected to export duty, refund won't be permitted.
  • Unutilized input tax credit due to output supplies being exports or 0 rated supplies
  •  Unutilized input tax credit due to inverted duty structure. This is the point at which the rate of tax on inputs of info is higher than the rate of tax of tax on output supplies. In the present expense administration, this is not taken into consideration for the refund.  Be that as it may, in the GST administration, this situation is qualified for a claim of the tax refund. Take note of that for this situation, a refund is not material when supplies are NIL appraised or completely absolved.

Read More: Types of Return in GST

Documents required for claiming refund under GST

Amount Claimed as Tax Refund is less than 5 Lakhs

If an Individual is claiming amount as tax refund which is less than 5 Lakhs, he needs to file a declaration based on the documents and other evidence accessible with him affirming that the incidence of tax or interest being claimed as refund has not been passed to someone else.

Amount Claimed as Tax Refund is greater than 5 Lakhs

If an Individual is claiming amount as tax refund which is greater than 5 Lakhs, the application of refund must be joined by:-

  • Documentary proof to set up that the refund is due to that individual.
  • Documentary or other confirmation to build up that the sum was paid by him/her and that the occurrence of the tax or interest has not been passed on to someone else.

Procedure for claiming GST Refunds

1. Application for Refunds

Form GST RFD-1 needs to be filed by the individual claiming refund of tax or interest or any another amount paid before the expiry of 2 years from the relevant date.



Goods exported via air or sea

Date on which the ship or aircraft in which the goods are loaded, leaves India


Goods exported via land

Date on which the goods pass the frontier


Goods exported via post

Date of dispatch of goods by the concerned post office


Services exported, where the supply of service has been completed prior to the receipt of payment

Date of receipt of payment

Service exported, where the payment has been received in advance prior to the date of issue of invoice

Date of issue of invoice

Utilized Input Tax Credit

End of the financial year in which the claim for tax refund arises


Take note of: A claim for refund of the adjust in the electronic money record must be made through the important month to month return, i.e., Form GSTR-3 if there should arise an occurrence of a standard dealer, and Form GSTR-4 in the event of a composition dealer.

2. Order for Refunds

For the Account of Export

In the event that the refund is on account of export of goods and/or services, the approved officer will refund 90% of the aggregate sum claimed as a refund on a provisional basis in the Form GST RFD-4. From that point, after due confirmation of the documents furnished, the officer will issue a request for final settlement of the refund claimed. Provisional Refund will be granted in the following conditions:-

  • The Individual claiming refund has not been prosecuted for tax evasion of a sum surpassing Rs. 250 Lakhs amid the first 5 years.
  • The individual’s GST compliance rating is not less than 5 on a scale of 10.
  • No pending appeal, review or revision exists on the amount of refund.

For any other case

In the event that the officer is satisfied that the entire or part of the amount claimed as refund in the application is refundable, he will issue an order for the refund in Form GST RFD-5. This will be done inside 60 days from the date of receipt of the application. On the off chance that the refund is not permitted inside 60 days, interest on the refund sum will be paid for the period after expiry of 60 days till the date of actual refund of tax.


How to Claim Tax Refund under GST