Question 1

What types of GST refunds can be claimed?

Accepted Answer

Section 54 CGST Act covers: (1) IGST paid on zero-rated exports — auto-processed via GSTR-1 shipping bill linkage, no RFD-01 needed; (2) accumulated ITC on zero-rated supplies without payment of IGST — RFD-01 via Rule 89; (3) inverted duty structure (input rate > output rate) — RFD-01 under Section 54(3)(ii); (4) excess cash ledger balance — RFD-01, processed within 30 days.

Question 2

What is the time limit for filing a GST refund application?

Accepted Answer

Two years from the "relevant date" under Rule 89(1) — for exports, this is the shipping bill date; for inverted duty, the end of the financial year in which the claim arises. Missing the two-year window results in permanent forfeiture — there is no condonation provision under GST law.

Question 3

How is the inverted duty structure refund calculated?

Accepted Answer

Rule 89(5) formula: Refund = (Net ITC × Turnover of inverted-rated supplies) ÷ Adjusted Total Turnover. "Net ITC" excludes ITC on capital goods and exempt supplies. The Supreme Court in VKC Footsteps (2021) confirmed that ITC on input services is excluded — only ITC on goods qualifies.

Question 4

Why do export refunds get stuck and how are they fixed?

Accepted Answer

Common reasons: (a) GSTR-1 shipping bill data does not match ICEGATE records — requires GSTR-1 amendment or GSTN-ICEGATE portal intervention; (b) LUT expired or not filed for the relevant period — Form RFD-11 must be on record; (c) EGM not filed by the shipping line — no fix until the EGM is filed by the carrier.

Question 5

What interest applies if the department delays processing?

Accepted Answer

Section 56 CGST Act mandates 6% interest per annum on refunds not processed within 60 days of a complete application. The interest accrues automatically — it need not be separately claimed and is payable by the government without a fresh application.

GST Refund Services

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