GST Refund for Exporters of Services Under LUT with RFD-01 (2026)

Written by CA Nandini Hasija, Krystal7 Consultants. Last updated 23 October 2026.

An exporter of services billing under a Letter of Undertaking (LUT) claims back unutilised input tax credit under section 54(3) of the CGST Act. It files Form GST RFD-01 with Statement 3, Statement 3A and FIRC or eBRC details. The refund is capped by rule 89(4): zero rated turnover times net ITC, divided by adjusted total turnover. The claim is due within two years of the relevant date. The officer can pay 90 percent provisionally within seven days.

This guide covers the refund of unutilised ITC for exporters of services as the law stands on 23 Oct 2026. It walks through the formula, documents, portal steps, deficiency memos and interest, with a worked example.

How do exporters of services get a GST refund of unutilised ITC?

An exporter of services under LUT charges no IGST on its export invoices, so its input tax credit builds up. Section 54(3) of the CGST Act lets it claim that unused credit back in cash. It files Form GST RFD-01 for a tax period, or a run of periods. The officer then sanctions the amount the rule 89(4) formula allows.

The right comes from two Acts read together:

1. Section 16(1)(a) of the IGST Act makes an export of services a zero rated supply.
2. Section 16(2) of the IGST Act keeps input tax credit available for zero rated supplies. The blocked credits in section 17(5) of the CGST Act still apply.
3. Section 16(3) of the IGST Act lets a registered person export under bond or LUT without paying IGST. It then claims the unutilised credit under section 54.
4. Clause (i) of the first proviso to section 54(3) of the CGST Act allows the refund for zero rated supplies without payment of tax.

Our guide to GST on export of services explains the zero rating rules. This page deals only with getting the credit back.

Who can claim a refund under section 54(3)?

Any registered person that made zero rated supplies without payment of IGST can claim, if it holds a valid LUT or bond for the period. The claim is for credit accumulated "at the end of any tax period". Monthly filers can claim by month and QRMP filers by quarter.

The section bars the refund where the supplier claims drawback of central tax or a refund of IGST on the same supply. A further bar for goods under export duty never applies to services.

Section 16(3) of the IGST Act was substituted by the Finance Act, 2021, with effect from 1 Oct 2023 under Notification No. 27/2023-Central Tax of 31 Jul 2023. Since then the LUT route is the default for zero rated supplies.

Section 16(4) lets the government notify who may export on payment of IGST and claim that tax back. It did so in Notification No. 01/2023-Integrated Tax of 31 Jul 2023, amended by Notification No. 05/2023-Integrated Tax of 26 Oct 2023 with effect from 1 Oct 2023. The payment route is open for all goods and services except listed goods such as pan masala and tobacco. No class of services is barred, so an exporter of services can choose either route.

The exporter files the LUT in Form GST RFD-11 under rule 96A of the CGST Rules. It goes in before the first export invoice of each financial year. Our LUT filing guide covers the steps. If the LUT was filed late, Circular No. 37/11/2018-GST of 15 Mar 2018 (paragraph 4.1) says the delay may be condoned case by case. We still treat a missing LUT as a fix to make before the claim, not after a deficiency memo.

When does a service count as an export for refund purposes?

A service is an export only when all five conditions in section 2(6) of the IGST Act are met. Fail one and the supply is taxable in India, so the credit is not refundable. Officers test these conditions first, before they look at the arithmetic.

Condition in section 2(6), IGST Act	What the officer checks	Where claims fail
(i) Supplier located in India	GST registration and place of business	Rarely an issue
(ii) Recipient located outside India	Contract party, billing address, who receives the service	Contract signed by a foreign company but service received by its Indian branch
(iii) Place of supply outside India	Section 13 of the IGST Act; default rule is the recipient's location	Services on goods in India, or services tied to Indian immovable property
(iv) Payment received in convertible foreign exchange, or in INR where RBI permits	FIRC or eBRC for each invoice	Payment netted off, received in INR from a non permitted source, or not yet received
(v) Supplier and recipient are not merely establishments of a distinct person	Explanation 1 to section 8 of the IGST Act	A branch billing its own foreign head office

Condition (v) does not catch a subsidiary billing its foreign parent. A company incorporated in India and a company incorporated abroad are separate persons. Circular No. 161/17/2021-GST of 20 Sep 2021 clarified exactly this in paragraph 5.2. The other conditions in section 2(6) must still be met.

Intermediary services changed on 30 Mar 2026. Until then, section 13(8)(b) of the IGST Act placed an intermediary's service at the intermediary's own location in India. An Indian sales support company working for a foreign principal could not zero rate its fee.

The Finance Act, 2026 omitted section 13(8)(b) when it received assent on 30 Mar 2026, as the GST Council's March 2026 newsletter records. In our reading, such a fee now falls under the default rule in section 13(2). It can qualify as an export from that date if the other conditions are met. Intermediary fees for supplies before 30 Mar 2026 stay outside zero rated turnover.

How is the refund calculated under rule 89(4)?

Rule 89(4) of the CGST Rules sets the ceiling. All figures relate to the "relevant period", which is the period for which the claim is filed. The formula reads:

Refund amount = (Turnover of zero rated supply of goods + Turnover of zero rated supply of services) x Net ITC / Adjusted total turnover

Each term has its own definition, and the definitions decide most disputes.

Term in rule 89(4)	Definition in short	What it means for an exporter of services
(A) Refund amount	The maximum refund that is admissible	A ceiling, not an entitlement
(B) Net ITC	ITC availed on inputs and input services during the relevant period	Capital goods credit stays out
(C) Turnover of zero rated supply of goods	Value of goods exported under LUT, capped at 1.5 times the value of like domestic goods	Nil for a pure service exporter
(D) Turnover of zero rated supply of services	Payments received in the period for zero rated services, plus earlier advances for services completed in the period, minus advances for services not yet completed	A receipts test, not an invoice test
(E) Adjusted total turnover	Turnover in the State or Union territory excluding services, plus zero rated and other services, excluding exempt supplies	The whole business, on the same basis as (D) for exports
(F) Relevant period	The period for which the claim is filed	One month, one quarter, or several periods clubbed

Definition (D) is the one exporters misread. An invoice raised in March and paid in May counts in the claim that covers May. So a March quarter claim with large unpaid March invoices gives a low refund for that quarter.

The formula is not the only cap. Circular No. 125/44/2019-GST of 18 Nov 2019 and the portal's Statement 3A restrict the refund to the lowest of three figures:

1. The maximum refund under the rule 89(4) formula.
2. The balance in the electronic credit ledger at the end of the tax period of the claim.
3. The balance in the electronic credit ledger when the claim is filed.

Paragraph 37 of Circular No. 125/44/2019-GST also says the formula applies to the consolidated ITC across IGST, CGST and SGST. On filing, the portal debits IGST first, then CGST and SGST in equal parts.

Which ITC goes into net ITC?

Net ITC is the credit availed on inputs and input services in the claim period. Section 2(59) of the CGST Act defines inputs to exclude capital goods, so capital goods fall outside net ITC. Laptops, servers and office fit outs bought for the export business do not raise the refund.

The credit must also pass three filters:

1. It must be availed in the GSTR-3B returns of the claim period. The test is when credit was availed, not the invoice date.
2. It must be eligible under section 16 and not blocked under section 17(5) of the CGST Act. Food, club fees and most motor vehicle costs are out.
3. It must appear in GSTR-2A or GSTR-2B for supplier invoices. Paragraph 5.2 of Circular No. 135/05/2020-GST of 31 Mar 2020 restricts the refund to invoices uploaded by suppliers.

Credit on imports and on reverse charge does not come through a supplier's GSTR-1. IGST paid in cash on a parent's management fee is a common example. That reverse charge credit is credit on an input service, so it belongs in net ITC. We support it with the self invoice and the cash ledger entry. Our guide to reverse charge on import of services covers how that credit arises.

On 8 Oct 2026 the 57th GST Council recommended refunds of capital goods credit for zero rated supplies (PIB release, item 8). The release says it applies to capital goods credit availed on or after 1 Apr 2027, and the refund will be spread over 60 months. It needs an amendment to the law before it takes effect.

What is the time limit for a GST export refund?

Section 54(1) of the CGST Act allows two years from the relevant date. For an export of services, clause (c) of Explanation 2 to section 54 sets the relevant date. It is the date of receipt of payment where the service was completed first. Where payment came in advance, it is the invoice date.

Clause (e) of Explanation 2 covers only the inverted duty refund under clause (ii). In our reading, the clause (c) date governs a refund of credit on exports of services. Each invoice has its own clock, starting from its own payment date.

Three practical points follow:

1. A claim can cover several tax periods, even across financial years. Paragraph 2.5 of Circular No. 135/05/2020-GST removed the earlier bar on spreading a claim across years.
2. If an officer issues a deficiency memo, the time between the first filing and the memo does not count towards the two years. The proviso to rule 90(3), inserted by Notification No. 15/2021-Central Tax of 18 May 2021, says so.
3. Payments older than two years at filing drop out of the zero rated turnover. We remove them before filing, because the officer will.

Take a service completed on 30 Jun 2026 and paid on 10 Aug 2026. The relevant date is 10 Aug 2026, so the claim for that receipt is due by 10 Aug 2028.

What documents go with RFD-01?

The application needs a short set of statements and files. Paragraph 4(a) of Circular No. 125/44/2019-GST says no other document is needed at the filing stage. For exports of services, rule 89(2)(c) of the CGST Rules requires a statement of invoices. It lists each invoice number and date with the matching BRC or FIRC.

Document	Legal basis	What it holds
Statement 3	Rule 89(2)(b) and (c)	Each export invoice with number, date and value, and the FIRC or eBRC number and date against it
Statement 3A	Rule 89(4)	The formula figures: zero rated turnover, adjusted total turnover, net ITC
Statement of input invoices (Annexure B)	Circular No. 125/44/2019-GST; Circular No. 135/05/2020-GST paragraph 6.3	Every input and input service invoice in net ITC, with GSTIN and HSN or SAC
Copy of GSTR-2A or GSTR-2B for the period	Circular No. 125/44/2019-GST, Annexure A	Proof that supplier invoices were uploaded
FIRC, FIRA or eBRC copies	Rule 89(2)(c); Circular No. 37/11/2018-GST paragraph 12	Proof of foreign currency receipt for each invoice
LUT reference number	Rule 96A; portal field	The reference number of the RFD-11 for that financial year, linked to the GSTIN
Declaration and undertaking	Section 54(3) provisos; section 16(2)(c) of the CGST Act	No drawback or IGST refund claimed; refund repaid with interest if the supplier did not pay the tax

Unjust enrichment does not apply. Section 54(8)(a) pays export refunds straight to the applicant, so no chartered accountant certificate on incidence of tax is needed.

We also keep the export contract and a payment to invoice reconciliation ready for the notice stage. Our guide to FIRC and eBRC for export of services explains how to get the bank evidence.

How do you file RFD-01 step by step on the GST portal?

The portal path is Services, then Refunds, then Application for Refund. Choose "Exports of Goods/Services, without Payment of Tax (accumulated ITC)" and select the period. The steps below follow the GSTN user manual.

1. File GSTR-1 and GSTR-3B for every period in the claim. The portal blocks the application until the GSTR-3B for the claim period and every other return due are filed.
2. Download the offline utility for Statement 3. Enter each invoice with its BRC or FIRC as a separate row. One invoice can carry several FIRC numbers.
3. Validate the file, create the JSON and upload it. A validated statement cannot be edited, only deleted and uploaded again.
4. Enter the figures in Statement 3A: zero rated turnover and adjusted total turnover. The portal fills net ITC, which you can only reduce.
5. Check the refundable amount, which the portal sets at the lowest of the formula and the two ledger balances.
6. Enter the LUT reference number, select the bank account and upload supporting files.
7. Tick the declaration, undertaking and self declaration. File with DSC or EVC.
8. Save the ARN. The portal debits the electronic credit ledger by the amount claimed at once.

A claim of INR 50 crore or more needs a Legal Entity Identifier on the form.

How does provisional refund work for zero rated supplies?

Section 54(6) of the CGST Act lets the officer refund 90 percent of the amount claimed on a provisional basis for zero rated supplies. Rule 91(2) of the CGST Rules sets the timing. The officer issues the order in Form GST RFD-04 within seven days of the acknowledgement. The payment order follows in Form GST RFD-05.

Rule 91(2) was substituted with effect from 1 Oct 2025 by Notification No. 13/2025-Central Tax of 17 Sep 2025. The provisional refund now rests on risk identification and evaluation by the system. The officer may still decline it for reasons recorded in writing and go straight to a final order under rule 92.

Rule 91(1) shuts provisional refund for one group. It covers anyone prosecuted in the previous five years for tax evasion above INR 250 lakh. Section 54(14) bars any refund below INR 1,000.

The Finance Act, 2026 extends 90 percent provisional refunds to inverted duty claims from a date the government will notify. On 23 Oct 2026 the CBIC text of section 54 still showed the old wording, limited to zero rated supplies. Check the Central Tax notifications on cbic-gst.gov.in for the start date before you rely on it for an inverted duty claim. Export claims already qualify.

On 8 Oct 2026 the 57th GST Council recommended that the system sanction the 90 percent automatically (PIB release, item 6.1). That is not yet law.

What happens after the claim is filed?

The claim moves through a fixed set of forms and time limits.

Stage	Form	Time limit	Legal basis
Application filed, credit debited	RFD-01	Within two years of the relevant date	Section 54(1); rule 89
Acknowledgement of a complete claim	RFD-02	Within 15 days of filing	Rule 90(2); Circular No. 125/44/2019-GST paragraph 9
Deficiency memo, if incomplete	RFD-03	Within 15 days of filing	Rule 90(3)
Provisional refund of 90 percent	RFD-04	Within seven days of acknowledgement	Section 54(6); rule 91(2)
Notice proposing rejection	RFD-08	Before any rejection	Rule 92(3)
Reply to the notice	RFD-09	Within 15 days of the notice	Rule 92(3)
Final sanction or rejection order	RFD-06	Within 60 days of the complete application	Section 54(7); rule 92
Payment order	RFD-05	With the order	Rules 91(3) and 92(4)

Once the officer acknowledges a claim, no deficiency memo can follow (Circular No. 125/44/2019-GST, paragraph 9). Only one memo may issue per application (Circular No. 37/11/2018-GST, paragraph 6.1).

If the officer rejects part of the claim, the credit comes back to the ledger through Form GST PMT-03. Paragraph 21 of Circular No. 125/44/2019-GST makes the return of credit depend on an undertaking not to appeal. After a deficiency memo, the debited credit returns automatically.

An appeal against the RFD-06 order lies to the Appellate Authority under section 107 of the CGST Act within three months.

Why do export refund claims get a deficiency memo or a rejection?

Most rejections come from mismatches, not from a lack of eligibility. The table lists what we see most often and how we fix it before filing.

Reason	Stage where it usually appears	Fix before filing
Statement 3 invoice values do not match GSTR-1 Table 6A	Deficiency memo	Reconcile invoice by invoice and amend GSTR-1 first
FIRC or eBRC missing, or amounts do not tie to invoices	Deficiency memo	Get the bank to map each receipt to an invoice; keep a mapping sheet
Zero rated turnover taken on invoice value, not payments received	Notice in RFD-08	Rebuild turnover under rule 89(4)(D) from bank receipts
Adjusted total turnover misses domestic sales, or includes exempt income	Notice in RFD-08	Use the same receipts basis for exports and include all taxable supplies
Capital goods credit inside net ITC	Notice in RFD-08	Strip capital goods out of Annexure B
Supplier invoices not in GSTR-2A or GSTR-2B	Notice in RFD-08	Chase suppliers to upload, or leave those invoices out
No LUT for the invoice dates	Deficiency memo or notice	File the LUT and seek condonation under Circular No. 37/11/2018-GST
Place of supply in India (services on goods in India, or intermediary before 30 Mar 2026)	Notice in RFD-08	Exclude those invoices; zero rate only true exports
Recipient is a branch or office of the same legal person	Notice in RFD-08	Check the contract party and Explanation 1 to section 8
Pending dues or unfiled returns	Withholding under section 54(10)	Clear dues and file every return due

The 57th GST Council recommended dropping scanned uploads for zero rated claims (PIB release, item 6.2). RFD-01 would capture the details in a system readable format.

How do SEZ supplies and deemed exports differ from exports?

A supply to an SEZ unit or developer is zero rated, like an export, but the documents differ. A deemed export is not zero rated at all. It is a domestic supply of goods on which tax is paid and later refunded. The refund for deemed exports does not use the rule 89(4) formula.

Point	Export of services	Supply of services to an SEZ unit or developer	Deemed export
Legal basis	Section 16(1)(a), IGST Act	Section 16(1)(b), IGST Act, for authorised operations only	Section 147, CGST Act; Notification No. 48/2017-Central Tax
Covers services?	Yes	Yes	No, notified supplies of goods only
Tax on the invoice	Nil under LUT, or IGST if paid	Nil under LUT, or IGST if paid	GST charged as normal
What is refunded	Unutilised ITC by formula, or IGST paid	Unutilised ITC by formula, or IGST paid	The tax paid on the supply
Who claims	Supplier	Supplier	Recipient, or supplier if the recipient has not taken credit
Foreign currency needed?	Yes, condition (iv) of section 2(6)	No	No
Key documents	Statement 3, FIRC or eBRC	Invoices endorsed by the SEZ specified officer, proof of payment by the SEZ unit, declaration that no tax was collected (rule 89(2)(e) and (f))	Statement of invoices and evidence notified for deemed exports (rule 89(2)(g))
Relevant date	Payment receipt, or invoice date for advances (Explanation 2(c))	Due date of the return for the period (Explanation 2(ba))	Date the supplier files the return for those supplies (Explanation 2(b); Circular No. 166/22/2021-GST)

The words "for authorised operations" in section 16(1)(b) apply from 1 Oct 2023. A service outside the unit's authorised operations is a taxable domestic supply. Our guide to setting up an SEZ unit covers the unit's side.

Is interest paid if the refund is delayed?

Yes. Section 56 of the CGST Act pays interest where a refund is not paid within 60 days of receipt of the application. The rate is 6 percent a year under Notification No. 13/2017-Central Tax of 28 Jun 2017. For refunds that arise from an appellate or court order that has attained finality, the rate is 9 percent.

The period counts from the day after the 60 days end until the refund is paid. Section 147 of the Finance Act, 2023, effective 1 Oct 2023, made this period subject to rules. Rule 94(2), inserted by Notification No. 38/2023-Central Tax of 4 Aug 2023, then excludes two delays caused by the applicant:

1. Time beyond 15 days that the applicant takes to reply to an RFD-08 notice in RFD-09.
2. Time taken to give correct bank details, or to get them validated, where the credit failed.

The officer issues the interest order with an RFD-05 payment order under rule 94. We do not wait for the officer to compute it. We ask for it in a letter citing section 56 once the 60 days have run.

How does the FEMA realisation period link to the refund?

The refund needs the money in the bank. Payment in convertible foreign exchange is a condition of export under section 2(6)(iv) of the IGST Act. Under rule 89(4)(D), only payments received count in zero rated turnover. A slow paying client delays the refund as well as the FEMA compliance.

Two clocks run on each export invoice:

1. FEMA: regulation 5(1)(a) of FEMA 23(R)/2026-RB applies from 1 Oct 2026. It requires realisation within nine months of the invoice date for services. The period is twelve months for invoices raised or settled in INR, and the AD bank may extend it.
2. GST: rule 96A(1)(b) of the CGST Rules, as substituted by Notification No. 12/2024-Central Tax of 10 Jul 2024, deals with unpaid invoices. The exporter pays the IGST with interest if payment has not arrived within 15 days after one year from the invoice. Where the FEMA period, with any RBI extension, ends later, the 15 days run from its end instead.

For invoices before 1 Oct 2026 the 2015 export regulations applied. The realisation period under those regulations was fifteen months between 13 Nov 2025 and 5 Jun 2026, then nine months again. Our guide to the export proceeds realisation period explains the history.

From 1 Oct 2026 the Export Declaration Form replaced SOFTEX for software exports.

What changed in 2026

Topic	Old position	New position	Date	Instrument
Intermediary services by an Indian supplier to a foreign principal	Place of supply in India under section 13(8)(b), so no export and no refund	Default rule in section 13(2) applies, so the fee can be an export in our reading	30 Mar 2026	Finance Act, 2026
Provisional refund for inverted duty claims	Not available	90 percent provisional refund extended to clause (ii) claims	Date to be notified (not shown in the CBIC text of section 54 on 23 Oct 2026)	Finance Act, 2026, amendment to section 54(6)
Export realisation period for services	Nine months under the 2015 regulations (fifteen months from 13 Nov 2025 to 5 Jun 2026)	Nine months, twelve months for INR invoices	1 Oct 2026	FEMA 23(R)/2026-RB
SOFTEX for software exports	SOFTEX filed for each invoice	Export Declaration Form for the invoice month	1 Oct 2026	FEMA 23(R)/2026-RB
Provisional refund processing	Officer led	Automatic 90 percent sanction by system risk score	Recommended 8 Oct 2026	57th GST Council, item 6.1
Acknowledgement or deficiency memo window	15 days	10 days, with deemed acknowledgement	Recommended 8 Oct 2026	57th GST Council, item 6.1
Capital goods credit in zero rated refunds	Excluded from net ITC	Refundable over 60 months for credit availed from 1 Apr 2027	Recommended 8 Oct 2026	57th GST Council, item 8.3
Distinct person condition for export of services	Section 2(6)(v) of the IGST Act applies	Condition removed	Recommended 8 Oct 2026	57th GST Council, item 10.1

The risk based provisional refund under rule 91(2) dates from 1 Oct 2025. It was already in force when this page was first published on 28 Feb 2026.

What has happened since 28 Feb 2026

The Finance Act, 2026 received assent on 30 Mar 2026, and the new FEMA export regulations started on 1 Oct 2026. The 57th GST Council recommendations of 8 Oct 2026 need circulars, notifications or amendments to the Acts before they bind. Our note on the 57th GST Council meeting tracks them.

Worked example

A Pune subsidiary of a UK company is registered in Maharashtra and files GSTR-3B monthly. It exports software development services to its parent under an LUT for FY 2026-27. It also sells a small support contract to an Indian client at 18 percent GST. It files one refund claim for July to September 2026.

The figures for July to September 2026

Item	Amount (INR)
Export payments received in the quarter for services completed	2,10,00,000
Advance received in June 2026 for services completed in August 2026	30,00,000
Advance received in September 2026 for services not yet completed	15,00,000
Domestic taxable services invoiced in the quarter	60,00,000
Interest on bank deposits (exempt)	4,00,000
ITC availed on input services and inputs in GSTR-3B for July to September (incl. reverse charge IGST on parent charges)	30,00,000
ITC availed on capital goods (laptops) in the same returns	4,00,000
Output GST on domestic services (60,00,000 x 18%) paid from credit	10,80,000
Electronic credit ledger opening balance on 1 Jul 2026	Nil

Step 1, zero rated turnover

Under rule 89(4)(D), zero rated turnover is payments received in the period of INR 2,10,00,000. Add the June advance for August work of INR 30,00,000. The September advance of INR 15,00,000 is for incomplete work, so it does not count. Zero rated turnover is INR 2,40,00,000.

Step 2, adjusted total turnover

Adjusted total turnover is zero rated services of INR 2,40,00,000 plus domestic services of INR 60,00,000. The exempt interest of INR 4,00,000 is left out. The total is INR 3,00,00,000.

Step 3, net ITC

Net ITC is INR 30,00,000. The INR 4,00,000 of capital goods credit stays out.

Step 4, formula and caps

The formula gives INR 2,40,00,000 x 30,00,000 / 3,00,00,000 = INR 24,00,000. On 30 Sep 2026 the credit ledger holds INR 23,20,000. That is INR 34,00,000 of credit availed less INR 10,80,000 used for output tax. It is unchanged on the filing date of 15 Oct 2026. The company claims the lowest figure, INR 23,20,000. The INR 80,000 gap is credit already used on domestic output tax.

Step 5, provisional refund and interest

The officer acknowledges the claim on 25 Oct 2026. Under rule 91(2), the provisional order for 90 percent should issue by 1 Nov 2026. That is INR 23,20,000 x 90% = INR 20,88,000. The balance of INR 2,32,000 waits for the RFD-06 order, due within 60 days of the complete application.

Now suppose the officer pays no provisional refund. The final order and payment arrive 120 days after the application was received. Interest runs for the 60 days after the first 60. At 6 percent a year: INR 23,20,000 x 6% x 60 / 365 = INR 22,882 (rounded). If the company took 25 days to reply to an RFD-08 notice, 10 days would be excluded under rule 94(2). Interest would then fall to INR 23,20,000 x 6% x 50 / 365 = INR 19,068 (rounded).

Step 6, time limit check

The earliest payment in the claim arrived on 2 Jul 2026, so its two year limit ends on 2 Jul 2028. A company that files once a year must watch the oldest receipts in the batch.

Common mistakes

1. Building zero rated turnover from invoices. Rule 89(4)(D) uses payments received. Fix: take the figure from bank receipts mapped to invoices.
2. Using a different basis in adjusted total turnover. The export part of the denominator must match the numerator. Fix: compute both from the same receipts schedule.
3. Leaving capital goods credit in net ITC. The portal pre fills credit, and teams forget to reduce it. Fix: edit net ITC down in Statement 3A and in Annexure B.
4. Waiting for the year end to claim. Old receipts age past two years, and cash sits in the ledger. Fix: claim monthly or quarterly.
5. Using up credit on domestic output tax before claiming. That lowers the ledger cap. Fix: plan domestic tax payments with the claim in mind, and claim before the ledger drops.
6. Claiming credit that suppliers have not uploaded. Circular No. 135/05/2020-GST restricts the refund to uploaded invoices. Fix: reconcile with GSTR-2B before filing.
7. Zero rating a service whose place of supply is in India. Fix: test each contract under section 13 of the IGST Act before the invoice goes out.
8. Filing without a valid LUT for the period. Fix: file RFD-11 every April before the first export invoice.
9. Missing the 15 day reply window on an RFD-08 notice. The delay cuts interest under rule 94(2) and invites rejection. Fix: diarise the date and reply with documents.

For a review before you file, email [email protected] with Statement 3A, GSTR-2B and the FIRC list for the period.

Checklist

1. Confirm each export invoice meets the five conditions in section 2(6) of the IGST Act.
2. Check that an LUT in Form GST RFD-11 covers every invoice date in the claim.
3. File GSTR-1 and GSTR-3B for all periods in the claim and the latest period due.
4. Map every foreign currency receipt to its invoice using FIRC or eBRC details.
5. Compute zero rated turnover from payments received, adjusting for advances under rule 89(4)(D).
6. Compute adjusted total turnover on the same basis, leaving out exempt supplies.
7. Prepare net ITC from inputs and input services availed in the period, without capital goods.
8. Reconcile supplier invoices in Annexure B with GSTR-2B and add HSN or SAC codes.
9. Compare the formula amount with the credit ledger balances and claim the lowest.
10. Upload Statement 3, fill Statement 3A, attach files, and file RFD-01 with DSC or EVC.
11. Track the RFD-02 acknowledgement within 15 days and the RFD-04 order within seven days of it.
12. Reply to any RFD-08 notice in RFD-09 within 15 days.
13. Request interest under section 56 if the refund is not paid within 60 days.
14. Diarise the two year limit from the oldest receipt in each unclaimed period.

Frequently Asked Questions

What is the GST refund for exporters of services under LUT?+

It is a refund of unutilised input tax credit under clause (i) of the first proviso to section 54(3) of the CGST Act. An exporter that bills without IGST under a Letter of Undertaking cannot use its credit against output tax. It files Form GST RFD-01 to get that credit paid out in cash, up to the rule 89(4) formula.

Which form is used for a refund of ITC on export of services?+

Form GST RFD-01, filed on the GST portal under rule 89 of the CGST Rules. Select "Exports of Goods/Services, without Payment of Tax (accumulated ITC)". Attach Statement 3 with invoice and FIRC details and fill Statement 3A with the formula figures. The officer acknowledges a complete claim in RFD-02.

What is the formula for refund of unutilised ITC on exports?+

Rule 89(4) of the CGST Rules sets it. The refund equals zero rated turnover of goods and services, multiplied by net ITC, divided by adjusted total turnover. The result is then capped at the electronic credit ledger balance at the end of the period and on the filing date.

What is the time limit for filing a GST export refund?+

Two years from the relevant date under section 54(1) of the CGST Act. For an export of services, Explanation 2(c) makes the relevant date the date payment is received. Where payment was received in advance, it is the invoice date. Time between filing and a deficiency memo is excluded for the fresh claim.

Is ITC on capital goods refundable for exporters?+

Not today. Rule 89(4) defines net ITC as credit on inputs and input services only, and section 2(59) of the CGST Act excludes capital goods from inputs. On 8 Oct 2026 the 57th GST Council recommended refunds of capital goods credit availed from 1 Apr 2027, spread over 60 months. That needs a change in the law.

How much provisional refund do exporters get and when?+

Section 54(6) of the CGST Act allows 90 percent of the amount claimed for zero rated supplies. Under rule 91(2), as substituted from 1 Oct 2025, the officer issues the RFD-04 order within seven days of acknowledgement, based on system risk evaluation. The officer can decline it for recorded reasons.

Can a refund claim cover more than one month or financial year?+

Yes. Circular No. 125/44/2019-GST allows a claim for one tax period or for successive periods clubbed together. Paragraph 2.5 of Circular No. 135/05/2020-GST removed the earlier bar on spreading a claim across financial years. Each invoice still has to be within two years of its own relevant date.

Is FIRC or eBRC mandatory for a GST refund on export of services?+

Yes. Rule 89(2)(c) of the CGST Rules requires a statement of invoices with the relevant BRC or FIRC for exports of services. Statement 3 on the portal makes the BRC or FIRC field mandatory for services. Without proof of foreign currency receipt, the supply does not meet section 2(6)(iv) of the IGST Act.

What happens if the officer issues a deficiency memo?+

The officer issues Form GST RFD-03 within 15 days under rule 90(3). The debited credit returns to the ledger automatically, and you file a fresh RFD-01 after fixing the gaps. The time from the first filing to the memo does not count towards the two year limit. Only one memo may issue per application.

Is interest paid on a delayed GST refund?+

Yes. Section 56 of the CGST Act pays 6 percent a year if the refund is not paid within 60 days of the application. Interest runs from the day after those 60 days until payment. Rule 94(2) excludes the applicant's delay beyond 15 days in replying to a notice and time spent fixing bank details.

How is a refund on supplies to an SEZ different from an export refund?+

A supply to an SEZ unit or developer for authorised operations is zero rated under section 16(1)(b) of the IGST Act. No foreign currency is needed. You need invoices endorsed by the SEZ specified officer, proof of payment by the unit and a declaration that no tax was collected. The relevant date is the due date of the return.

Can an Indian subsidiary claim an export refund for services billed to its foreign parent?+

Yes, if all five conditions in section 2(6) of the IGST Act are met. An Indian company and its foreign parent are separate persons, so condition (v) on establishments of a distinct person does not apply. Paragraph 5.2 of Circular No. 161/17/2021-GST of 20 Sep 2021 clarified this point.

Can intermediary services now get an export refund?+

In our reading, yes, for supplies from 30 Mar 2026. The Finance Act, 2026 omitted section 13(8)(b) of the IGST Act, which placed intermediary services in India. The default rule now places them at the recipient's location. If the foreign principal pays in foreign currency, the fee can be zero rated and the credit refunded.

What if export payment is not received within the FEMA period?+

Under rule 96A(1)(b) of the CGST Rules, the exporter pays the IGST with interest. The deadline is 15 days after one year from the invoice, or 15 days after the FEMA period if that ends later. Under FEMA 23(R)/2026-RB the period for services is nine months, or twelve for INR invoices. An unpaid invoice also stays out of the refund formula.

Sources

• CBIC, Central Goods and Services Tax Act, 2017, section 54 (Refund of tax), as amended, https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/acts/2017_CGST_act/active/chapter11/section54_v1.00.html
• CBIC, Central Goods and Services Tax Act, 2017, section 56 (Interest on delayed refunds), https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/acts/2017_CGST_act/active/chapter11/section56_v1.00.html
• CBIC, Central Goods and Services Tax Rules, 2017, rule 89, https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/rules/cgst_rules/active/chapter10/rule89_v1.00.html
• CBIC, Central Goods and Services Tax Rules, 2017, rule 91, as substituted by Notification No. 13/2025-Central Tax of 17 Sep 2025, https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/rules/cgst_rules/active/chapter10/rule91_v1.00.html
• CBIC, Central Goods and Services Tax Rules, 2017, rule 94, https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/rules/cgst_rules/active/chapter10/rule94_v1.00.html
• CBIC, Central Goods and Services Tax Rules, 2017, rule 96A, clause (b) as substituted by Notification No. 12/2024-Central Tax of 10 Jul 2024, https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/rules/cgst_rules/active/chapter10/rule96a_v1.00.html
• CBIC, Integrated Goods and Services Tax Act, 2017, section 16 (Zero rated supply), https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/acts/2017_IGST_Act/active/chaptervii/section16_v1.00.html
• GST Council Secretariat, Recent amendments in GST in October 2023 (Notification No. 05/2023-Integrated Tax of 26 Oct 2023 amending Notification No. 01/2023-Integrated Tax of 31 Jul 2023), https://gstcouncil.gov.in/sites/default/files/gst-knowledge/Recent-Amendment.pdf
• CBIC, Circular No. 161/17/2021-GST, Clarification relating to export of services, condition (v) of section 2(6) of the IGST Act, 20 Sep 2021, https://cbic-gst.gov.in/pdf/Circular-No-161-14-2021-GST.pdf
• CBIC, Circular No. 125/44/2019-GST, Fully electronic refund process, 18 Nov 2019, https://cbic-gst.gov.in/pdf/circular-cgst-125.pdf
• CBIC, Circular No. 135/05/2020-GST, Refund related clarifications, 31 Mar 2020, https://cbic-gst.gov.in/pdf/Circular_Refund_135_5_2020.pdf
• CBIC, Circular No. 37/11/2018-GST, Clarification on export related refund issues, 15 Mar 2018, https://cbic-gst.gov.in/pdf/circularno-37-cgst.pdf
• CBIC, Circular No. 166/22/2021-GST, Clarification on certain refund related issues, 17 Nov 2021, https://cbic-gst.gov.in/pdf/Circular-166-22-2021-GST.pdf
• GSTN, User manual, Refund of ITC on exports of goods and services without payment of integrated tax, https://tutorial.gst.gov.in/userguide/refund/Refund_of_ITC_paid_on_Exports_of_Goods_and_Services.htm
• GST Council Secretariat, Newsletter March 2026 (Finance Act, 2026 changes), https://gstcouncil.gov.in/sites/default/files/2026-04/newsletter-march-2026.pdf
• Ministry of Finance (PIB), Recommendations of the 57th Meeting of the GST Council, 8 Oct 2026, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2320934