GST Refund Timelines

Processing timelines can vary in practice and rules can change. This article is for general information and does not constitute tax advice.

The Basic Sequence

Under Section 54, a refund application on Form RFD-01 gets an acknowledgment (RFD-02) within 15 days if complete, or a deficiency memo (RFD-03) if not, which restarts the process once refiled. From acknowledgment, 90% of the refund for zero-rated supplies can be granted provisionally within 7 days, with the balance following after full scrutiny. The statutory outer limit for the final order is 60 days from the original application date.

Interest for Delay Beyond 60 Days

Under Section 56, interest at 6% per annum accrues automatically from the day after that 60-day limit until actual payment, without needing to be separately applied for. Where a refund follows from an appeal or other order in the taxpayer’s favour and still isn’t paid within 60 days of that order, the interest rate rises to 9%.

Provisions That Extend or Reset the Clock

A deficiency memo effectively restarts the clock on refiling, since it’s treated as if the original application was never validly submitted. Where a refund would go to someone other than the applicant, unjust enrichment rules under Section 54(8) can instead route the amount to the Consumer Welfare Fund, and where any proceeding on the matter (appeal, revision, or similar) is pending, the officer can withhold the refund pending resolution, further extending timelines beyond the statutory 60 days in practice.