What is the time limit for claiming GST refund?

The time limit for claiming a GST refund is 2 years from the relevant date. The relevant date varies depending on the type of refund claim. For exports, it is the date of shipment. For inverted duty structure, it is the end of the financial year in which the claim arises. For excess payment, it is the date of payment. Applications must be filed in Form RFD-01 on the GST Portal.

How is GST refund calculated for inverted duty structure?

GST refund for inverted duty structure is calculated using the formula prescribed under Rule 89(5) of CGST Rules: Maximum Refund = [(Turnover of inverted rated supply x Net ITC) / Adjusted Total Turnover] minus Tax payable on such inverted rated supply. This formula ensures that refund is capped at the proportionate ITC attributable to the inverted rated supply, minus the tax already paid on such supply.

Can I claim GST refund on exports?

Yes, GST refund on exports is available under two routes. First, if you export without payment of tax under a Letter of Undertaking (LUT) or Bond, you can claim a refund of accumulated ITC using the formula under Rule 89(4). Second, if you export with payment of IGST, you can claim a refund of the IGST paid on such exports. Both routes are covered under Section 54 of the CGST Act read with Rule 89.

What is the difference between Rule 89(4) and Rule 89(5)?

Rule 89(4) governs GST refund claims for zero-rated supplies (exports), whether made under LUT/Bond or with payment of IGST. The formula is: Refund = (Turnover of zero-rated supply x Net ITC) / Adjusted Total Turnover. Rule 89(5) governs refund claims for inverted duty structure, where input tax rate is higher than output tax rate. The formula is: Maximum Refund = [(Turnover of inverted rated supply x Net ITC) / Adjusted Total Turnover] minus Tax payable on inverted rated supply.

What documents are required for GST refund?

Documents required for GST refund depend on the type of claim. For exports under LUT/Bond: shipping bills, export invoices, bank realisation certificate (for services), and GSTR-3B. For inverted duty structure: purchase invoices, sales invoices, and calculation sheet showing the refund amount. For IGST paid on exports: shipping bill with IGST details, export invoices, and GSTR-1. All claims are filed online via Form RFD-01 on the GST Portal.

How long does it take to get a GST refund?

Under the CGST Act, the GST officer must process a refund claim within 60 days from the date of receipt of a complete application. If the refund is not processed within this period, interest at 6% per annum is payable on the refund amount from the date of expiry of the 60-day period. For IGST paid on exports, the refund is processed directly by Customs and is generally faster.

Is GST refund available for composition dealers?

No, GST refund on account of inverted duty structure or accumulated ITC is not available to composition scheme taxpayers. Composition dealers pay tax at a flat rate and are not eligible to claim Input Tax Credit. Therefore, the mechanism of ITC-based refund does not apply to them. However, if a composition dealer has excess cash balance in the electronic cash ledger, they can claim a refund of that excess amount.

What is adjusted total turnover for GST refund?

Adjusted Total Turnover (ATT) is the total turnover of the registered person during the relevant period, excluding the value of exempt supplies and the value of supplies in respect of which refund is claimed under Rule 89(4A) or 89(4B). ATT is used as the denominator in the refund formulas under Rule 89(4) and 89(5) to determine the proportionate ITC eligible for refund.

Can GST refund be claimed for services under inverted duty?

No. As per the amendment effective from October 2019, GST refund on account of inverted duty structure is not available for input services. The refund under Rule 89(5) is restricted to Input Tax Credit on inputs (goods) only, not on input services. This restriction was upheld by the Supreme Court in Union of India v. VKC Footsteps India Pvt. Ltd. (2021). Only ITC on capital goods and input goods is considered in the refund calculation.

What happens if the GST refund claim is rejected?

If a GST refund claim is rejected, the officer issues a deficiency memo in Form RFD-03 or a rejection order in Form RFD-06 after giving the applicant a show cause notice. The applicant can respond to the show cause notice and present their case. If the refund is still rejected, the applicant can appeal to the Appellate Authority within 3 months of the order, and further to the Appellate Tribunal and High Court if required.

GST Refund Calculator | Free Online GST Refund Calculator India

What is GST Refund?

A GST refund is the return of excess GST paid by a registered taxpayer to the government. Under Section 54 of the Central Goods and Services Tax (CGST) Act, 2017, read with Rule 89 of the CGST Rules, a taxpayer can claim a refund in specific situations where the input tax credit accumulated exceeds the tax liability, or where tax was paid on exports that qualify as zero-rated supplies.

The three primary scenarios where GST refund arises are:

Inverted Duty Structure (Rule 89(5)): When the GST rate on inputs is higher than the GST rate on outputs, a business accumulates ITC that cannot be offset against output tax. For example, a textile manufacturer buying fabric at 12% GST and selling finished garments at 5% GST builds up excess ITC eligible for refund
Export of Goods or Services Without Payment of Tax (Rule 89(4)): Exporters who execute exports under a Letter of Undertaking (LUT) or Bond without paying IGST accumulate ITC. They can claim a refund of this accumulated ITC based on the proportion of zero-rated turnover to total turnover
Export of Goods or Services With Payment of IGST (Rule 89(4)): Exporters who pay IGST on their export invoices can directly claim a refund of the IGST paid. This route is simpler as the refund equals the IGST paid on such exports
Excess Cash Balance: If a registered person has paid more tax than required in the electronic cash ledger, the excess amount can be claimed as a refund. This often happens due to computation errors

All GST refund claims must be filed in Form RFD-01 on the GST Portal within 2 years from the relevant date. The officer must process the claim within 60 days. Use our free GST calculator to compute your GST liability alongside your refund claims.

How is GST Refund Calculated?

GST refund is calculated using different formulas depending on the type of claim. Rule 89 of the CGST Rules prescribes specific formulas for inverted duty structure refund and zero-rated supply refund. Using an ITC calculator alongside helps you verify the net ITC available before applying the refund formula.

Formula for Inverted Duty Structure (Rule 89(5)):

Maximum Refund = [(Turnover of Inverted Rated Supply x Net ITC) / Adjusted Total Turnover] - Tax Payable on Inverted Rated Supply

Formula for Export Without Tax / LUT (Rule 89(4)):

Refund = (Turnover of Zero-Rated Supply x Net ITC) / Adjusted Total Turnover

Formula for Export With Payment of IGST:

Refund = IGST Paid on Zero-Rated Supply (Exports)

Step-by-step process to calculate GST refund:

Step 1: Identify the refund category: inverted duty structure, export under LUT/Bond, or export with payment of IGST

Step 2: Gather the relevant figures, including turnover of zero-rated or inverted rated supply, net ITC for the period, and adjusted total turnover

Step 3: Apply the appropriate Rule 89 formula to compute the maximum refund amount

Step 4: For inverted duty, deduct the tax payable on such supplies from the proportionate ITC to arrive at the net refund

Step 5: File Form RFD-01 on the GST Portal with supporting documents and the computed refund amount

GST Refund Calculation with Example

Let us walk through two practical examples to understand how GST refund is computed under Rule 89 of the CGST Rules.

Example 1: Inverted Duty Structure (Textile Manufacturer)

Scenario: A textile manufacturer buys fabric at 12% GST and sells finished garments at 5% GST. For the quarter, the figures are as follows.

Turnover of Inverted Rated Supply: Rs 50,00,000

Net ITC for the period: Rs 8,00,000

Adjusted Total Turnover: Rs 1,20,00,000

Tax Payable on Inverted Rated Supply: Rs 1,50,000

Proportional ITC = (50,00,000 x 8,00,000) / 1,20,00,000 = Rs 3,33,333

Maximum Refund = Rs 3,33,333 - Rs 1,50,000 = Rs 1,83,333

The manufacturer can claim a maximum GST refund of Rs 1,83,333 for this quarter by filing Form RFD-01.

Example 2: IT Services Exported Under LUT (Rule 89(4))

Scenario: An IT company exports software services under a Letter of Undertaking without paying IGST. Details for the month are as follows.

Turnover of Zero-Rated Supply (Exports): Rs 80,00,000

Net ITC for the period: Rs 6,00,000

Adjusted Total Turnover: Rs 1,00,00,000

Refund = (80,00,000 x 6,00,000) / 1,00,00,000 = Rs 4,80,000

The IT company can claim a refund of Rs 4,80,000 representing the ITC attributable to their export turnover.

Types of GST Refund Claims in India

The CGST Act and Rules provide for refunds in several scenarios. Understanding which category applies helps you use the correct formula and submit accurate documentation.

Refund Scenario	Applicable Rule	Basis of Refund	Time Limit
Inverted duty structure	Rule 89(5)	Proportionate ITC minus tax payable	2 years from end of financial year
Export under LUT/Bond (zero-rated)	Rule 89(4)	Proportionate ITC on zero-rated supply	2 years from relevant date
Export with payment of IGST	Rule 89(4)	IGST paid on export invoices	2 years from date of shipment
Excess cash in electronic cash ledger	Section 54(1)	Excess amount paid	2 years from date of payment
Tax paid on exempt supply by mistake	Section 54(3)	Tax wrongfully paid	2 years from date of payment
Refund on supplies to SEZ unit	Rule 89(1)	Zero-rated supply to SEZ	2 years from relevant date

For exporters using invoicing software, the Petpooja Invoice platform automates GST computation on invoices and makes it easier to reconcile export turnover for refund claims. You can also use our GST composition scheme calculator to check if the composition scheme is suitable for your business, since composition dealers cannot claim ITC-based refunds.

How to Use This GST Refund Calculator

This free GST refund calculator covers all three refund scenarios under Rule 89 of the CGST Rules. Follow these steps to get your refund amount instantly.

Step 1: Select your refund type. Choose "Inverted Duty" if your input GST rate exceeds output GST rate. Choose "Export (LUT/Bond)" if you export without paying IGST. Choose "Export (With Tax)" if you have paid IGST on export invoices
Step 2 (Inverted Duty): Enter turnover of inverted rated supply, net ITC for the period (inputs only, excluding input services), adjusted total turnover, and tax payable on inverted rated supply
Step 2 (Export LUT/Bond): Enter the turnover of zero-rated supplies (export value), net ITC for the period, and adjusted total turnover
Step 2 (Export With Tax): Simply enter the IGST paid on your export invoices. Your refund equals the IGST amount paid
Step 3: Click "Calculate Refund" to see the maximum GST refund amount, the rule applied, proportional ITC, and tax adjustment
Step 4: Download the PDF report for a detailed breakup including the formula applied, effective refund rate, and filing reference for Form RFD-01

Cross-check your GST return values using our reverse GST calculator before finalising the refund claim. Accurate turnover and ITC figures are critical for a valid RFD-01 application.

GST Refund Filing Process (RFD-01)

After computing your refund amount using this calculator, you need to file Form RFD-01 on the GST Portal. Here is the step-by-step process for filing your GST refund claim.

Step 1: Log in to the GST Portal. Visit gst.gov.in and log in with your GSTIN and credentials. Navigate to Services, then Refunds, then Application for Refund
Step 2: Select Refund Type. Choose the appropriate refund category from the dropdown: "Refund of ITC on account of export of goods or services without payment of tax", "Refund on account of ITC accumulated due to inverted tax structure", or "Refund of excess balance in electronic cash ledger"
Step 3: Select the Tax Period. Choose the financial year and the tax period (month or quarter) for which you are claiming the refund. Ensure that GSTR-3B for the relevant period has been filed
Step 4: Fill Form RFD-01. Enter the refund amount calculated using Rule 89. The portal auto-populates some figures from your GSTR-1 and GSTR-3B filings. Verify and complete all mandatory fields
Step 5: Upload Supporting Documents. Attach relevant documents such as purchase invoices, export invoices, shipping bills, bank realisation certificates (for services), and the computation statement
Step 6: Submit and Track. Submit the application using your Digital Signature Certificate (DSC) or Electronic Verification Code (EVC). Note the ARN for tracking. The refund officer must process the claim within 60 days

GST Refund Calculator