🔹 Introduction

Exports are zero-rated supplies under GST, meaning exporters are not burdened with tax. However, exporters often face working capital blockage due to taxes paid on inputs and IGST on exports. GST law allows refunds to exporters either by paying IGST and claiming refund, or by exporting under LUT/Bond and claiming ITC refund.

(Reference: Sec. 54 of CGST Act, Rule 89–96 of CGST Rules, CBIC Circulars till 2025)

🔹 Types of Refunds Available to Exporters

✅ 1. Refund of IGST Paid on Exports

• Exporter pays IGST at the time of export.

• Refund automatically processed through ICEGATE based on shipping bill & GSTR-1 data.

• No need to file separate RFD-01.

✅ 2. Refund of Unutilized ITC (Exports under LUT/Bond)

• Exporter furnishes Letter of Undertaking (LUT) or Bond.

• No IGST paid at export.

• Refund of accumulated ITC filed via FORM GST RFD-01 on GST portal.

🔹 Step-by-Step Process – Refund of IGST Paid on Exports

📌 Step 1: File GSTR-1 with export invoice details.
📌 Step 2: Shipping bill filed with Customs → considered as refund application.
📌 Step 3: Customs system validates details with GSTR-1.
📌 Step 4: Refund credited automatically to bank account.

🔹 Step-by-Step Process – Refund of Unutilized ITC (LUT Route)

📌 Step 1: File LUT/Bond on GST portal before export.
📌 Step 2: File GSTR-3B and GSTR-1 with export details.
📌 Step 3: Log in to GST portal → Services → Refunds → Application for Refund → RFD-01.
📌 Step 4: Upload supporting documents (shipping bills, invoices, BRC/FIRC).
📌 Step 5: ARN generated → Refund processed by GST officer.
📌 Step 6: Refund sanctioned via RFD-06 order → amount credited to bank account.

🔹 Documentation Required

• Export invoices.

• Shipping bills.

• Bank Realisation Certificate (BRC) / Foreign Inward Remittance Certificate (FIRC).

• LUT/Bond copy (if applicable).

• Statement of invoices (Annexure-B).

🔹 Timelines for Refund Processing

• Refund order to be issued within 60 days from application.

• Delay → Interest @ 6% u/s 56 of CGST Act.

• Provisional refund of 90% within 7 days for exporters (if no risk flagged).

🔹 Practical Examples

Example 1: IT Exporter
Company provides software services abroad. Exports under LUT, accumulates ITC of ₹10 lakh. Applies via RFD-01 → refund sanctioned.

Example 2: Manufacturer-Exporter
Exports finished goods worth ₹2 crore, pays IGST of ₹36 lakh. Refund auto-credited via ICEGATE after GSTR-1 & shipping bill validation.

Example 3: Trader-Exporter
Exports garments under LUT. Files refund of ITC ₹5 lakh → processed via RFD-01 with supporting documents.

🔹 Common Mistakes

• Mismatch between GSTR-1 & shipping bill.

• Not filing LUT before export.

• Wrong bank account in GST portal → refund delay.

• Submitting incomplete supporting documents.

🔹 Best Practices

• ✅ File LUT at start of FY.

• ✅ Reconcile export data in GSTR-1, 3B & shipping bills.

• ✅ Track refund application status regularly.

• ✅ Maintain export documentation properly.

• ✅ Seek professional help for RFD-01 filing.

🔹 FAQs

Q1. Is export under GST exempt?
➡️ No, exports are zero-rated (eligible for ITC & refund).

Q2. Can refund be claimed without BRC/FIRC?
➡️ No, realisation proof is mandatory.

Q3. How long does it take to get refund?
➡️ Normally 60 days, but provisional refund (90%) within 7 days.

Q4. Can refund be rejected?
➡️ Yes, if mismatch found or ineligible ITC claimed.

Q5. Do exporters under composition scheme get refund?
➡️ No, composition taxpayers not eligible.

🔹 Conclusion

Exporters can claim refunds either by paying IGST or under LUT/Bond for unutilized ITC. Timely filing of returns, proper documentation, and reconciliation are key to smooth refund processing.

📌 Need expert help in filing export refunds, LUT, or handling refund rejections?
Contact Tech-Tax Solutions – Quality, Trust & Expertise in Ghaziabad, Noida & Delhi.