GST Refunds as per CGST Act, 2017: Procedures, Importance, Recent Updates and Practical Insights

Tanishka Vaish | Last updated: 03 June 2025

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Quick Summary

The GST refund mechanism under the CGST Act, 2017, is crucial for maintaining business liquidity and promoting exports. It allows taxpayers to claim refunds for excess tax paid, unutilised Input Tax Credit (ITC) in cases like exports or inverted duty structures, and other specific scenarios. The process, governed by Section 54 of the CGST Act, involves filing an application (Form RFD-01) online within two years, with a mandate for interest payment if not processed within 60 days.

Introduction The Goods and Services Tax (GST) regime, implemented in India from July 1, 2017, revolutionized the country's indirect taxation landscape. Among its many features, the refund mechanism under the Central Goods and Services Tax (CGST) Act, 2017, stands out as a vital tool for ensuring li

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FAQ :

A GST refund under the CGST Act, 2017, is the return of excess tax, interest, or any other amount paid by a taxpayer, or the reimbursement of unutilised Input Tax Credit (ITC) under specific circumstances, as governed by Section 54 of the Act.

Taxpayers can claim GST refunds for excess tax payments due to error, exports of goods or services, supplies to Special Economic Zones (SEZs), deemed exports, accumulation of ITC due to an inverted duty structure, finalisation of provisional assessments, and for excess balance in the electronic cash ledger.

Generally, refund applications must be filed within two years from the 'relevant date', which varies depending on the specific reason for the refund claim.

The process involves filing a pre-application form online, then submitting the primary application through Form GST RFD-01 on the GST portal, uploading necessary statements and supporting documents, and providing valid bank account details for disbursement.

If a refund is not granted within 60 days from the date of receipt of the application, the GST Act mandates that interest is payable to the applicant.

Claiming GST refunds is important for business liquidity by preventing working capital from being blocked, enhances export competitiveness by ensuring zero-rated supplies, builds taxpayer trust, and contributes to the ease of doing business.