GST on Exports: Refunds, Eligibility & Application Procedure [2025 Guide]-by CA Vishal Haresh Mehta

Exports play a crucial role in a country’s economic growth. Recognizing this, India’s Goods and Services Tax (GST) regime offers special treatment for exports, ensuring they remain zero-rated and not burdened by domestic taxes. For exporters, understanding the refund eligibility, application procedures, and compliance requirements under GST is critical to ensuring cash flow and legal adherence.

In this comprehensive guide, we’ll cover:

1. What are Exports under GST?

2. GST Treatment of Exports

3. Types of Export Refunds

4. Eligibility Criteria for GST Refund on Exports

5. Documents Required

6. Step-by-Step Refund Application Procedure

7. Timelines & Common Issues

8. FAQs

   
   

1. ✅ What are Exports under GST?

Under GST, exports of goods or services mean taking goods or services outside India. These fall into two categories:

• Export of goods – Sending goods from India to a place outside India.

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2. 🌐 GST Treatment of Exports

Exports are treated as Zero-Rated Supplies under Section 16 of the IGST Act, 2017, which means:

• The output is taxed at 0%, but

• The input taxes paid on inputs, input services, and capital goods used in exports are refundable.

Exporters have two options under GST:

Option 1: Export with IGST Payment

• Pay IGST on export supplies.

• Claim refund of the IGST paid.

Option 2: Export under LUT/Bond without IGST

• No need to pay tax on export.

• File Letter of Undertaking (LUT) or Bond.

• Claim refund of accumulated Input Tax Credit (ITC).

  
  

3. 💸 Types of GST Refunds on Exports

Type of Refund	Applicable When	Refund Claim
Refund of IGST Paid on Exports	Export with tax payment	Automatically processed via shipping bill
Refund of ITC	Export under LUT/Bond	Manual claim via GST portal

4. 🧾 Eligibility Criteria for GST Refund on Exports

To claim GST refunds on exports, the following conditions must be met:

For Exports with IGST:

• GST registered exporter

• Actual export of goods or services

• IGST must be paid on the shipping bill

• Valid shipping bill & EGM (Export General Manifest) filed

For Exports under LUT/Bond:

• Registered person furnishing LUT/Bond (LUT for all except those prosecuted for tax evasion > ₹250 lakh)

• ITC not restricted under Section 17(5) (blocked credits)

• Exports must be supported by valid documents (invoice, shipping bill, EGM)

• Payment must be received in convertible foreign exchange

5. 📋 Documents Required for Export Refund Application

Here’s a list of documents typically required:

• GST RFD-01 Form (online)

• Export Invoices

• Shipping Bills

• Export General Manifest (EGM)

• LUT/Bond Copy (if applicable)

• FIRC/BRC for services export (Foreign Inward Remittance Certificate)

• Statement 3/3A (export statement)

• Input tax invoices

• CA certificate (if required)

6. 📌 Step-by-Step GST Refund Application Procedure

🔹 A. For IGST Paid Exports:

1. File GSTR-1: Report export invoice under Table 6A.

2. File GSTR-3B: Declare IGST paid on exports.

3. Ensure shipping bill, invoice, and EGM details match.

4. Automatic refund is processed by customs after EGM filing.

5. Refund credited to bank account.

No manual application needed if data matches.

🔹 B. For Exports under LUT/Bond (Refund of ITC):

1. Login to GST Portal

2. Go to Services > Refunds > Application for Refund

3. Select “Refund of ITC on Export of Goods & Services without Payment of Tax”

4. Fill in Form RFD-01:

   • Select period

   • Upload invoices

   • Attach required documents (Statement 3/3A)

5. Submit application with DSC/EVC

6. ARN generated; Track status via portal.

7. Refund credited after verification by officer.

7. ⏱️ Timelines & Processing

Step	Timeline
Refund application filing	Within 2 years from relevant date
Acknowledgment (RFD-02)	Within 15 days
Refund sanctioned (RFD-06)	Within 60 days of filing
Provisional Refund (90%)	Within 7 days of acknowledgment (for exporters not prosecuted in last 5 years)

8. ⚠️ Common Issues in Export Refunds

• Mismatch in invoice/shipping bill data

• Incorrect HSN/SAC codes

• Bank details not validated

• Non-filing or delay in EGM

• Utilization of ineligible ITC

• Not filing LUT on time

👨‍🏫 Tips for Exporters to Avoid GST Refund Delays

• Always file returns (GSTR-1, 3B) on time.

• Match invoice data with shipping bills.

• Validate bank details on GST portal.

• Maintain all export documentation.

• File LUT/Bond at start of financial year.

• Regularly track refund application status.

📚 Conclusion

GST on exports offers significant benefits through zero-rated supply status and refund of taxes paid on inputs. Exporters can choose between exporting with IGST or under LUT/Bond, depending on their cash flow and compliance capacity.

Timely documentation, accurate filings, and knowledge of refund procedures ensure you don’t lock working capital unnecessarily. Whether you're a merchant exporter or service exporter, understanding the refund eligibility and application process is key to sustaining profitability under GST.

🔎 FAQs on GST Export Refunds

Q1. Can I claim refund for both IGST paid and ITC for the same export?

🅰️ No. You can claim either IGST refund or ITC refund, not both.

Q2. How often can I file refund claims?

🅰️ Refund claims can be filed monthly or quarterly, depending on your filing frequency.

Q3. What if my refund is delayed?

🅰️ Interest is payable by the government if refund is not issued within 60 days.

Q4. Is LUT mandatory every year?

🅰️ Yes. LUT must be filed every financial year.

Q5. Do SEZ supplies qualify as zero-rated?

🅰️ Yes. Supplies to SEZ units/developers are also treated as zero-rated under GST.

If you’re an exporter and need help streamlining your GST compliance or refund process, feel free to consult us for expert assistance.

-CA Vishal Haresh Mehta @Camehtaji #Camehtaji #Vishalmehtablogs #Refundonexports #refundonGST #IGSTrefund #Vishalhareshmehta #cavishalmehta.com