How to Claim GST Refunds in India: Step-by-Step Process (2025 Guide)

The Goods and Services Tax (GST) has simplified India’s indirect taxation structure. However, one persistent challenge for businesses is blocked working capital due to excess GST paid. Thankfully, the GST refund mechanism enables eligible taxpayers to claim back excess taxes, ensuring steady cash flow and compliance.

This comprehensive 2025 guide explains who can claim GST refunds, step-by-step filing process, required documents, timelines, and mistakes to avoid. If you’ve been facing refund delays, this article will act as your one-stop solution.

What is a GST Refund?

A GST refund refers to the return of excess tax paid to the government. Refund situations typically arise when:

• Input Tax Credit (ITC) exceeds output tax liability.
• Exports are made (zero-rated supplies).
• An inverted duty structure exists (where the GST paid on inputs is higher than the GST applicable on finished goods or services).
• GST is paid in excess by error.
• Provisional assessments result in overpayment.

Refunds are essential as they:

• Improve cash flow and liquidity.
• Reduce the cost of working capital.
• Promote compliance with GST law.

Who is Eligible for a GST Refund?

Taxpayers who can claim GST refunds include:

1. Exporters of goods or services supplying without IGST payment under a Letter of Undertaking (LUT) or bond.
2. Businesses facing an inverted duty structure, where the input tax credit is higher than their output tax liability.
3. Casual and non-resident taxpayers (after adjustment of dues).
4. Taxpayers who mistakenly deposited excess GST.
5. Businesses with unutilized ITC in specific cases.
6. Suppliers providing goods or services to SEZ units or developers.

Documents Required for GST Refund in 2025

Before initiating a refund application, keep the following documents ready:

• GST RFD-01 Form (filed online via GST portal).
• Statement of invoices (exports, SEZ supplies, or excess tax paid).
• Proof of bank details such as a cancelled cheque or a copy of a bank statement.
• Proof of payment (BRC/FIRC in case of exports).
• Declaration confirming that the tax burden has not been passed on (self-declaration or CA certificate).
• Additional supporting documents depending on the type of refund (LUT, export invoices, etc.).

Step-by-Step Process to Claim GST Refund in 2025

The government has simplified refund claims through online filing. Follow this process:

Step 1: Log in to GST Portal

Go to the official GST portal and sign in using your registered username and password.

Step 2: Access Refund Section

Navigate to Services → Refunds → Apply for Refund.

Step 3: Select the Refund Category

Choose the appropriate type of refund, such as:

• Refund of excess balance in cash ledger
• Export of goods/services without IGST payment
• Refund due to inverted duty structure
• Refund of excess tax deposited

Step 4: Fill GST RFD-01 Form

• Enter details like the tax period, turnover, and invoices.
• Upload supporting documents in PDF/JPEG formats.

Step 5: Upload Statements & Declarations

Depending on your claim type, attach:

• Statement 2 for exports
• Statement 5 for inverted duty cases
• Self-declaration (for refund claims below ₹2 lakh)
• CA certificate (for claims above ₹2 lakh)

Step 6: ARN Generation

Once submitted, an Application Reference Number (ARN) is generated for future tracking.

Step 7: Refund Scrutiny by Officer

• A GST officer examines the application within 15 days.
• Deficiencies, if any, are communicated through RFD-03.
• If all documents are correct, the refund process moves ahead.

Step 8: Refund Sanction Order

• Approved refunds are sanctioned through RFD-06.
• A payment order is generated in RFD-05.
• The refund amount is directly transferred to the taxpayer’s registered bank account.

GST Refund Timeline in 2025

• Application filing: Within 2 years from the relevant date.
• Acknowledgment by officer: Within 15 days of filing.
• Provisional refund: Exporters receive 90% within 7 days.
• Final refund: Must be issued within 60 days of filing, else 6% interest is payable by the government.

Common Mistakes to Avoid During GST Refund Filing

1. Mismatch between invoices and returns (GSTR-1 & GSTR-3B).
2. Selecting the wrong refund type, leading to rejection.
3. Incomplete documentation.
4. Filing refund claims beyond the 2-year limit.
5. Claiming ineligible ITC.

Pro Tips for a Hassle-Free Refund

• Always reconcile GSTR-2B, GSTR-3B, and GSTR-1 before applying.
• Keep LUT and export-related documents updated.
• Track ARN status regularly on the GST portal.
• Consult a GST professional to minimize chances of rejection.

FAQs on GST Refunds in India (2025)

Q1. How long does it take to receive a GST refund?
Usually within 60 days, though exporters get provisional refunds faster (within 7 days).

Q2. Can I claim GST refund on exports without LUT?
No. You must furnish a Letter of Undertaking (LUT) to export without IGST payment.

Q3. What if my refund claim is rejected?
You can file a fresh application after correcting deficiencies or appeal against the rejection order.

Q4. Is GST refund available for service providers?
Yes. Exporters of services and SEZ service suppliers are eligible for GST refunds.

Q5. What happens if the refund is delayed?
If refund is not sanctioned within 60 days, interest at 6% per annum is payable by the government.

Conclusion: File Your GST Refund Hassle-Free with India Company Setup

Claiming a GST refund in India can seem complex, but with the right documentation and expert help, the process becomes smooth and stress-free. Timely refunds mean improved cash flow and better business growth.

At India Company Setup, we specialize in GST registration, GST return filing, and GST refund assistance. Our CA-led team ensures that your refund application is error-free, compliant, and processed on time.

Don’t let your working capital get stuck with the government. Call 9915731447 today to talk to our experts and get your GST refund processed without delays.