Refunds
Getting your own money back
Getting your own money back out of the system.
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Refunds arise in three main situations: you exported without paying IGST and have credit piling up, you exported with IGST and want it back, or your inputs are taxed higher than your output so credit accumulates that you can never use.
Exporters choose between two routes. File a Letter of Undertaking and export without paying IGST at all, then claim refund of accumulated credit – better for cash flow. Or pay IGST on the export and get it back automatically once shipping bill data matches, with no separate application for goods.
The law puts a clock on the department: acknowledgment in 15 days, 90% of a zero-rated claim provisionally within 7 days, and a final order within 60 days – with interest payable to you if they miss it.
Worked example
What the inverted duty formula leaves behind
| Input tax paid on goods | ₹18,00,000 | Inputs taxed at 18% |
| Input tax paid on services | ₹6,00,000 | Freight, job work, professional fees |
| Output tax collected at 5% | ₹9,00,000 | Finished product is a merit item |
Credit accumulates, but the Rule 89(5) formula counts only goods – the ₹6,00,000 on input services stays stuck on the books. Knowing this before you price the product is the difference between a margin and a surprise.
The mistakes that cost people money
Not theoretical risks — the ones we actually see land on clients’ desks.
Letting the LUT lapse on 1 April. It is valid for one financial year, and exporting without a live LUT means IGST becomes payable.
Filing an incomplete refund application. The 60-day clock runs from a complete application, so a deficiency memo resets it.
Missing the two-year limitation from the relevant date. It arrives faster than exporters expect.
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Refunds — the complete guide
9 pages covering all 16 provisions, with the plain-language explanation and practice notes for each. Print it, keep it, share it with your accountant.
Common questions on this
Straight answers to what people actually ask us.
How to File a GST Refund for Exports
Two refund routes exist for exports — LUT-based ITC refund, or automatic IGST refund if you pay tax upfront. H…
How Long Does a GST Refund Actually Take?
The law sets a 60-day clock for GST refunds, with 90% paid provisionally within 7 days for exports — and inter…
What Is an LUT in GST Exports?
An LUT lets exporters ship goods or services without paying IGST upfront. Here’s what it is, who can use it, a…
What Is Refund for Inverted Duty Structure?
When your inputs are taxed higher than your output, ITC piles up unused — inverted duty refund lets you claim …
Every provision on refunds
All 16 of them, each with a plain-language explanation and the full legal text.
CGST Rules, 2017 · 11
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Stuck on refunds for your own business?
You now know more about this than most people who will advise you on it. If the numbers are big enough that being wrong matters, send us the facts – we will tell you where you stand before you commit to anything.
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