Refund of Input Tax Credit in GST Regarding

It is a known fact that Indian exporters procure raw materials locally by paying taxes. However, exports can be duty-free. In this case, the input tax credit can not be utilized for output liability. Thus, now you can ask for a refund of such credit lying in your credit ledger. See below how you can get the input tax credit refund from GST.

Refund of Input Tax Credit paid on Exports

To get a refund of Input Tax Credit on account of exports without payment of Tax, you may comply with the activities as specified below:  

1. File a GST refund application in Form GST RFD-01 at GST Portal. You can file for a refund of multiple tax periods in one refund application.

2. You have to provide the turnover of Zero-Rated supplies and Adjusted Total Turnover for the period refund is sought.

Read about input tax credit Guide 2023

Auto population of Refund Records

3. The Net ITC in the table “Computation of Refund to be claimed” is auto-populated by the system and can be edited downwards considering the net ITC availed.

This is for the heads of CGST/SGST/IGST together and Cess, in the return for the respective tax period for which the refund is claimed. However, it is excluding any ITC related to Capital Goods and transition ITC.

4. System will auto-calculate the eligible refund amount and post in the last column of the table “Maximum refund amount to be claimed”.

Refund Limitations

5. The applicant should ensure that the amount being claimed as a Refund does not exceed such that:

• the amount in each head is equal to or lower than the balance in each head of the Electronic credit ledger;
• the total refund amount must not exceed the “Maximum Refund amount to be claimed” in Statement 3A; and
• the total refund amount must not exceed the amount calculated at the aggregate level (IGST+CGST+SGST) in the table “Balance in Electronic Credit Ledger at the end of the tax period for which refund is claimed”.

6. Applicant has to be careful while furnishing values in Form GST RFD-01, as no rectification in the application is allowed after its filling and must ensure that:  

• The applicant has to ensure that they have filed Form GSTR-1 and Form GSTR- 3B for all the tax periods pertaining to which the Refund is claimed.
• They must have exported goods/services on account of which they are claiming an ITC refund. In case of the Export of Goods, the taxpayer shall provide Shipping Bill and EGM details.
• In the case of the export of services, they should have obtained FIRC/BRC from the concerned bank for receipt of foreign exchange.

Read Input Tax credit GST conditions

7. Once the Application Reference Number (ARN) is generated, the refund application filed will be assigned to Jurisdictional Refund Processing Officer for processing. Thereafter, the refund applicants can track the status of refund applications filed using the “Track Application status” functionality on the portal.

8. The Invoice details given under Form GSTR-1 (Table 6A of Form GSTR-1) and as given in the refund statement must be the same.

Read GST sett off rules 2023

Frequently Asked Questions in ITC Refund?