Guides · GST
The GST refund process, explained
A GST refund returns tax to a business that has paid or accumulated more than it owes. It matters most to exporters and to businesses whose inputs are taxed higher than their outputs.
When a refund arises
Common refund situations are exports and supplies to SEZs made without paying tax under a bond or letter of undertaking, an inverted duty structure where inputs are taxed higher than outputs, and tax paid in excess or by mistake.
In each case the business is out of pocket for tax it should not ultimately bear, so the law provides a route to claim it back.
How the process broadly works
A refund is claimed by filing an application on the GST portal with the supporting documents for the ground being claimed. The claim is then scrutinised and, if in order, sanctioned.
Accurate, matched records are what make a refund claim go smoothly, because the claim has to reconcile with the returns and the underlying invoices.
How Lekha helps
Lekha generates GST-compliant delivery challans and tax invoices against a purchase order, with HSN, place of supply, and the right CGST/SGST or IGST split computed live, and gap-free financial-year numbering.
Because the sales and purchase records sit in one ledger with their tax fields, the figures a refund claim rests on are consistent rather than reassembled by hand.
Questions
- Who can claim a GST refund?
- Businesses in specific situations, such as exporters, those with an inverted duty structure, and anyone who paid tax in excess or by mistake. Confirm eligibility for your case.
- What is an inverted duty structure?
- It is where the tax rate on a business's inputs is higher than the rate on its outputs, so credit accumulates. That accumulated credit can, subject to rules, be refunded.
- How is a refund claimed?
- By filing a refund application on the GST portal with supporting documents; the claim is then scrutinised and, if in order, sanctioned within the time the law allows.
This guide is general information, not legal or tax advice. Confirm the current rules and your own circumstances for any specific case.