Export Refund Under GST

Refund rules and processing timelines can change. This article is for general information and does not constitute tax advice.

Zero-Rated, Not Exempt

Under Section 16 of the IGST Act, exports and supplies to SEZ units/developers are zero-rated: taxed at 0%, but ITC on inputs used to make them remains fully available, unlike a genuinely exempt supply, which blocks input credit entirely. That preserved ITC is what makes a refund meaningful in the first place.

Route 1: Export Under Bond/LUT (No IGST Paid)

A Letter of Undertaking (Form RFD-11) is filed annually, allowing export without paying IGST upfront. The refund claimed here is of accumulated ITC, filed through Form RFD-01 on the portal, calculated using a prescribed formula based on export turnover, total turnover, and net ITC for the period. This route avoids the working-capital hit of paying IGST and then waiting for it back.

Route 2: Export With IGST Payment

IGST is paid on the export, and the shipping bill itself, once matched with the export general manifest and GSTR-1/3B filings, is deemed the refund application — no separate RFD-01 needed for goods exports specifically. This tends to move faster since it’s largely system-driven, but ties up more working capital upfront.

The 2-Year Limitation and What Disqualifies a Claim

Refund claims must be filed within 2 years of the relevant date (generally the export date). Exporters who received capital goods under specific export-promotion duty exemption schemes, or who claim a drawback of central tax simultaneously, are barred from also claiming this refund route on the same goods.