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Under GST, exports of goods or services, and supplies of goods or services to a Special Economic Zone (SEZ) developer or unit for authorised operations, are treated as "zero-rated supplies" (IGST Act, section 16(1)). You can take input tax credit for making zero-rated supplies, subject to the blocked-credit rules in section 17(5) of the CGST Act (section 16(2)).
Zero-rated does not mean IGST never applies. The law gives exporters two ways to remove the tax cost:
This guide covers exports of goods out of India. Exporters of services follow different documentation rules, which are summarised near the end. Supplies to SEZ units and developers have their own refund conditions and are not covered here.
An exporter who wants to supply without paying IGST must furnish a bond or LUT in FORM GST RFD-11 to the jurisdictional Commissioner before the export (CGST Rules, rule 96A(1)).
By doing so, the exporter undertakes to pay the tax due, with interest, if the goods are not exported within three months of the export invoice date, or any further period the Commissioner allows. That payment is due within fifteen days after the period ends.
If the goods are not exported in time and that amount is not paid, permission to export under the bond or LUT is withdrawn and the amount is recovered. The facility is restored once the amount is paid (rule 96A(3) and (4)).
Any registered person may furnish an LUT instead of a bond. The exception is a person prosecuted for an offence under the CGST Act, the IGST Act or the earlier tax laws where the tax evaded exceeds ₹250 lakh. The LUT is furnished for a financial year (Notification No. 37/2017-Central Tax).
The LUT is filed online in FORM GST RFD-11 on the GST portal, for the financial year you select, before you make the zero-rated supply. It is signed by an authorised signatory using a DSC or EVC, and it expires at the end of that financial year (GST portal FAQs on filing an LUT).
No documents need to be submitted physically to the tax office. CBIC treats an LUT as accepted once the portal generates an acknowledgement with an Application Reference Number (ARN). However, if the exporter was not eligible to furnish an LUT, it can later be rejected, and the rejection then applies from the start (Circular No. 40/14/2018-GST).
For zero-rated supplies made without payment of tax, the CGST Act allows a refund of unutilised input tax credit (CGST Act, section 54(3)). The claim is filed electronically in FORM GST RFD-01 on the GST common portal, subject to Aadhaar authentication under rule 10B (CGST Rules, rule 89(1)).
For exports of goods, the application must include a statement of the shipping bill or bill of export numbers and dates, and the numbers and dates of the related export invoices (rule 89(2)(b)). The amount claimed is debited from your electronic credit ledger (rule 89(3)).
The refund is not simply all the credit in your ledger. Rule 89(4) sets a formula for the maximum admissible refund, based on your zero-rated turnover. For that formula, the value of exported goods is the lower of the FOB value in the shipping bill and the value in the tax invoice (rule 89(4), Explanation).
No refund of input tax credit is allowed if the supplier claims drawback of central tax, or claims a refund of the IGST paid, on those same supplies (section 54(3), proviso).
Since 1 October 2023, section 16(4) of the IGST Act allows this route only for the classes of persons and of goods or services that the Government notifies. Notification No. 01/2023-Integrated Tax, as amended by Notification No. 05/2023-Integrated Tax, notifies all goods and services for export on payment of IGST except the goods listed in its table.
The table covers pan masala; specified unmanufactured tobacco and tobacco products, such as chewing tobacco, snuff, cut tobacco and gutkha; and peppermint and other mint essential oils. Each entry is identified by its customs tariff heading or item. Check your exact tariff item against the table before choosing this route.
For goods exported on payment of IGST, you do not file a separate refund form. The shipping bill is treated as the refund application, but only once all three of these conditions are met (CGST Rules, rule 96(1)):
If the shipping bill details do not match the export details in your FORM GSTR-1 (as amended in GSTR-1A, if any), the application is treated as filed only on the date you correct the mismatch (rule 96(1), proviso).
The export invoice details from GSTR-1 are sent electronically from the GST portal to the Customs system, which confirms that the goods have left India (rule 96(2)). Once a valid GSTR-3B has been filed, Customs processes the claim. An amount equal to the IGST paid on each shipping bill is credited to the bank account in your GST registration that has also been intimated to Customs (rule 96(3)).
Rule 96(4) allows the refund to be withheld in three situations:
Where a claim is withheld on the first or third ground, or on the second ground after Customs passes an order of violation, it is transferred to the GST officer as a system-generated FORM GST RFD-01. It is then dealt with under rule 89 (rule 96(5A) to (5C)).
If the price of goods already exported is revised upward, and you pay additional IGST on the increase after the original IGST refund has been paid under rule 96, you can claim a refund of that additional IGST. The claim is filed in FORM GST RFD-01 within two years from the relevant date for the original export (rule 89(1B); proviso inserted in rule 96(1) by Notification No. 12/2024-Central Tax).
This claim needs its own documents (rule 89(2)(bb) and (bc)), including:
No refund of unutilised input tax credit, and no refund of IGST paid, is allowed on a zero-rated supply of goods that is subject to export duty. This is stated in IGST Act section 16(5) and CGST Act section 54(15), both inserted by the Finance (No. 2) Act, 2024 and in force from 1 November 2024 under Notification No. 17/2024-Central Tax.
A refund on exported goods depends on the sale proceeds being received. If you have been refunded unutilised credit or IGST on exported goods but the proceeds are not realised in India, in full or in part, within the period allowed under the Foreign Exchange Management Act, 1999 (including any extension), you must repay the refund.
The repayment covers the unrealised part only, with interest, and is due within thirty days after that period ends. If you do not repay, the amount is recovered as an erroneous refund with interest (CGST Rules, rule 96B(1); see also the proviso to IGST Act section 16(3) for the LUT route).
The refund is not recovered if the Reserve Bank of India writes off the realisation requirement on merits. If the proceeds are realised after recovery, within any extended period the RBI permits, the recovered amount is refunded to the extent realised, provided you produce evidence within three months of realisation (rule 96B(1) proviso and 96B(2)).
If you have defaulted in filing any return, or must pay tax, interest or penalty that has not been stayed, the proper officer may withhold a refund due to you. The officer may also deduct those unpaid amounts from it (CGST Act, section 54(10)).
A refund application under section 54 must be made within two years from the "relevant date". The relevant date depends on how the goods leave India (CGST Act, section 54(1) and Explanation (2)(a)):
For a refund claim on account of zero-rated supply that is filed with the proper GST officer, such as a Route A claim in FORM GST RFD-01, the officer may refund 90% of the amount claimed on a provisional basis before final settlement (CGST Act, section 54(6)). This does not happen automatically, and some exporters are excluded.
From 1 October 2025, these categories are not allowed a provisional refund (Notification No. 14/2025-Central Tax):
Nor is it available to a person who, in the five years before the tax period of the claim, was prosecuted for an offence where the tax evaded exceeds ₹250 lakh (CGST Rules, rule 91(1)).
For refund applications filed on or after 1 October 2025, the provisional order is made on the basis of the system's identification and evaluation of risk, within seven days of the acknowledgement of the application. The officer may, for reasons recorded in writing, decline a provisional refund and proceed to a final order under rule 92 (rule 91(2) and proviso).
CBIC has instructed its officers to sanction 90% provisionally where the system classifies the claim as low risk. Claims not classified as low risk get no provisional refund and go through detailed scrutiny instead (Instruction No. 06/2025-GST, paras 3.1 and 4).
Even a low-risk claim may not receive a provisional refund in some cases. The officer may instead decide it finally where an amount may need to be adjusted or withheld under section 54(10) or (11). A provisional refund may also be refused where, on an earlier refund claim, the issue is pending in appeal, a show cause notice has been issued, or an order has not attained finality (Instruction No. 06/2025-GST, para 3.2).
Services follow a different procedure. A refund claim on exported services must include a statement of invoices together with the relevant Bank Realisation Certificates or Foreign Inward Remittance Certificates (rule 89(2)(c)). A refund of IGST paid on exported services is claimed in FORM GST RFD-01 under rule 89, not through the shipping bill (rule 96(9)). Under an LUT, the tax becomes payable if payment for the services is not received within the period set in rule 96A(1)(b).
These are good-practice checks, not additional legal requirements:
For the wider set of export documents, see our export documentation checklist for Indian exporters.
This article is general information for Indian exporters, not tax or legal advice. It is based on the IGST Act, CGST Act, CGST Rules, notifications, circulars and instructions as published on the CBIC Tax Information Portal and in the Gazette of India, and on the GST portal's LUT guidance. GST rules change frequently through notifications, so check the current official text or consult a qualified GST professional before acting on your own refund claim.
Last checked: 22 October 2026.
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