How Many Days Will It Take to Get GST Refund?

The Goods and Services Tax (GST) in India was introduced with the objective of creating a uniform tax system and simplifying the taxation process. While GST has streamlined many aspects of business taxation, one important feature that significantly impacts businesses—especially exporters and those with input tax credits—is the GST refund process. If a business has paid excess GST or is eligible for a refund due to zero-rated supplies (like exports), then understanding how many days it will take to get the refund is crucial for cash flow planning and operational efficiency.

In this article, we will explore how long the GST refund process takes, the steps involved, types of refunds, and why it’s beneficial to understand this system thoroughly.

How Long Does It Take to Get a GST Refund?

Under the current GST rules in India, the standard timeline for GST refund processing is 60 days from the date of application. However, in many cases—especially for exporters—the government aims to process refunds within 7 to 15 working days, provided all documentation is complete and correct.

Here’s a quick breakdown:

• Normal Refund Timeline: Up to 60 days
• Provisional Refund (Exporters): Within 7 days (up to 90% of the claim)
• Final Refund (After verification): Remaining 10% within 60 days

In case the refund is delayed beyond 60 days, the taxpayer is eligible for interest at 6% per annum on the refund amount, as per GST law.

How Does the GST Refund Process Work?

The GST refund process involves several steps, from filing the application to the actual disbursal of funds. It is governed by Section 54 of the CGST Act, and the filing is done electronically via the GST Portal . The process varies slightly depending on the type of refund claimed.

Here is a general overview of the GST refund process:

1. Filing the Refund Application
   The taxpayer files Form GST RFD-01 on the GST portal along with supporting documents. This must be filed within 2 years from the “relevant date” (which varies based on refund type).
2. Acknowledgment by GST Officer
   Once submitted, the GST officer will issue an acknowledgment in GST RFD-02 within 15 days.
3. Provisional Refund (Optional)
   For exporters, 90% of the refund may be released provisionally in 7 days through GST RFD-04.
4. Verification & Final Sanction
   The officer may ask for further clarification or documents (GST RFD-03). After verification, the refund is approved through GST RFD-06.
5. Disbursement
   Refund is credited to the taxpayer’s bank account through GST RFD-05 (payment order).

Advantages of a Streamlined GST Refund Process

Understanding and following the GST refund process offers several advantages:

• Faster Working Capital Rotation: Especially important for exporters and manufacturers who incur large input credits.
• Improved Cash Flow Management: Avoids unnecessary blocking of funds.
• Legal Entitlement: Ensures that businesses are not financially burdened due to excess tax payment.
• Government Support: Encourages compliant businesses by ensuring quick refunds.
• Interest on Delay: In case of undue delays, businesses earn interest on the refund amount.

Steps to Apply for GST Refund (Step-by-Step Guide)

1. Login to the GST Portal: Go to www.gst.gov.in and log in using your credentials.
2. Navigate to Refund Section: Under Services > Refunds > Application for Refund.
3. Select Refund Type: Choose the category—Export, Excess Payment, ITC Accumulation, etc.
4. Filing GST RFD-01: Fill out the form with necessary details and upload relevant documents like shipping bills, invoices, payment proofs, etc.
5. ARN Generation: Once submitted, an Application Reference Number (ARN) is generated.
6. Provisional Refund (if applicable): For eligible exporters, 90% of the refund is issued within 7 working days.
7. Track Status: You can check the refund status online using your ARN.
8. Final Refund: After due verification, the final amount is credited.

Types of GST Refunds

Different scenarios can give rise to a GST refund claim. Here’s a list of the most common types:

1. Excess Payment of Tax
   Overpayment due to calculation errors or multiple tax payments on the same invoice.
2. Export of Goods or Services (Zero-Rated Supplies)
   Exporters can claim refunds either of IGST paid or on unutilized input credit.
3. Accumulated ITC (Inverted Duty Structure)
   When the tax rate on inputs is higher than the output, leading to unused ITC.
4. Refund on Account of Assessment/Provisional Assessment/Appeal
   When tax is paid under protest and later reversed.
5. Refund to UN Bodies or Embassies
   Special bodies are eligible for refunds on GST paid.
6. Refund due to Supplies Made to SEZ Units
   Supplies to SEZ units or developers are zero-rated and eligible for refund.

Conclusion

The GST refund process in India, while detailed, has been designed to be efficient—especially for businesses engaged in exports and zero-rated supplies. The timeline for receiving a GST refund ranges from 7 to 60 days, depending on the nature of the claim and the completeness of documents submitted. The automation and digitization of the refund process have greatly reduced bureaucratic delays, making it easier for businesses to operate smoothly.

By understanding the timelines, eligibility, and process, businesses can avoid unnecessary delays and ensure they receive their rightful refunds promptly. Filing accurate returns, keeping proper documentation, and responding to officer queries timely can all help expedite the refund.

FAQs

Q1. What is the maximum time limit to claim a GST refund?
Ans: You must file a refund claim within 2 years from the relevant date, which varies depending on the type of refund.

Q2. What is the fastest way to get a GST refund?
Ans: For exporters, opting for provisional refunds and ensuring all documentation is in order can lead to refunds within 7–15 working days.

Q3. Can I track my GST refund status?
Ans: Yes, you can track it using the Application Reference Number (ARN) on the GST portal.

Q4. What happens if the GST refund is delayed?
Ans: If the refund is not processed within 60 days, the government pays an interest of 6% per annum from the 61st day.

Q5. Do I need to file separate applications for different refund types?
Ans: Yes, each type of refund (like export refund or excess payment) must be filed separately using Form GST RFD-01.

Q6. Is GST refund taxable?
Ans: No, the refund received is not considered taxable income.

Q7. What if my refund application is rejected?
Ans: You can respond to the deficiency memo or appeal the decision within the prescribed timelines.