Indirect Tax Laws · Refunds

Refund under GST: Section 54 and Relevant Date

Updated 5 October 2026

Section 54 of the CGST Act lets any person claim a refund of tax, interest or any other amount paid, by applying within two years from the relevant date. The relevant date depends on the case: exports, supplies to SEZ, deemed exports, wrong payment, provisional assessment, court orders, inverted duty or other cases. Identify the case first, fix its relevant date, then count two years.

Understand Refund under GST: Section 54 and Relevant Date

A refund is the return of money that the government should not have kept. Under GST, section 54 is the main provision. It says any person, registered or not, who has paid tax, interest or any other amount can claim it back, if the law allows a refund in that situation.

The common refund situations are: exports of goods or services (zero-rated supplies) where tax is paid and refund is claimed, or where goods or services are exported without paying tax and the input tax credit (ITC) is stuck; unutilised ITC because the tax rate on inputs is higher than on output supplies (inverted duty structure); tax paid by mistake or wrongly (for example, CGST and SGST paid when IGST was due); excess cash paid in the ledger; deemed exports and supplies to SEZ units or developers; tax paid on a provisional basis; and refunds arising from an appeal, court or authority order.

Every claim has a deadline. You must apply before the expiry of two years from the relevant date. The relevant date is not one fixed event. It changes with the type of refund.

For goods exported, where a refund of tax paid is available on the goods themselves or on the inputs or input services used in them, it is linked to the departure of the carrier, the crossing of the frontier or dispatch by post.
For supplies of goods regarded as deemed exports, where a refund of tax paid is available on the goods, it is the date on which the return relating to such deemed exports is furnished.
For services exported, where a refund of tax paid is available on the services themselves or on the inputs or input services used in them, it is the date of receipt of payment in convertible foreign exchange (or in Indian rupees where RBI permits) if the supply was completed before the payment. It is the date of issue of the invoice if payment was received in advance, before the invoice.
For supplies of goods to an SEZ unit or developer, it is the date the goods enter the SEZ. For services supplied to an SEZ unit or developer, the payment or invoice rule applies.
For court or appellate orders, it is the date the order is communicated.
For refund of unutilised ITC under the inverted duty structure (the second case in section 54(3)), it is the end of the financial year in which the claim for refund arises.
For tax paid provisionally, it is the date of adjustment of tax after the final assessment.
For a person other than the supplier, it is the date of receipt of goods or services or both by that person.
In any other case, it is the date of payment of tax.

Do not mix the situations. The export dates cover refund linked to exported goods or services. This includes the ITC on inputs and input services used in them, so they also apply to a refund of unutilised ITC where exports were made without payment of tax. The end-of-financial-year date is only for the inverted duty case. Never count from the tax period of the return.

Two more ideas matter. First, a refund of unutilised ITC is allowed only in two cases: zero-rated supplies made without payment of tax, and inverted duty structure. You cannot claim a refund of ITC just because it is unused. Second, the refund must pass the test of unjust enrichment: if you passed the tax burden to the buyer, then under section 54(8) the refund is credited to the Consumer Welfare Fund, not paid to you. The exceptions, where the refund is paid to the claimant, are:

refund of tax paid on zero-rated supplies (exports) of goods or services or both, or on inputs or input services used in making them;
refund of unutilised ITC under section 54(3);
refund of tax paid on a supply that is not provided, wholly or partly, where no tax invoice has been issued or a refund voucher has been issued;
tax and interest, if any, or any other amount paid by the applicant, where the applicant has not passed on the incidence to any other person;
tax or interest borne by such other class of persons as the Government notifies on the recommendation of the Council.

So every exam answer follows one chain: who is claiming, which situation applies, what the relevant date is, and whether two years have been met.

Key rules to remember

General time limit: Last date for refund application = relevant date + 2 years; The application must be made before the expiry of two years from the relevant date. If in doubt, file earlier than the exact anniversary.
Relevant date: goods exported: By sea or air: date the ship or aircraft leaves India. By land: date goods pass the frontier. By post: date of dispatch by the post office to a place outside India.; It is the departure of the carrier or the crossing of the frontier, not the date of the invoice or shipping bill. It applies where a refund of tax paid is available on the goods themselves or on the inputs or input services used in them. So it also covers a refund of unutilised ITC where goods are exported without payment of tax.
Relevant date: deemed exports: Date on which the return relating to such deemed exports is furnished; Applies to supplies of goods regarded as deemed exports, where a refund of tax paid is available on the goods.
Relevant date: services exported: Date of receipt of payment (in convertible foreign exchange, or in Indian rupees where RBI permits), where the supply of services was completed before the payment was received. Date of issue of the invoice, where payment was received in advance, before the date of issue of the invoice.; Check the order of events: advance before invoice means the invoice date; service completed before payment means the date of receipt of payment. Apply the rule to the supply as a whole. It applies to a refund of tax paid on exported services and to ITC on inputs or input services used in them.
Relevant date: supplies to SEZ unit or developer: Goods: the date the goods enter the SEZ. Services: the payment or invoice rule, as for exported services; Apply the goods rule or the services rule according to what is supplied to the SEZ unit or developer.
Relevant date: orders: Date of communication of the judgment, decree, order or direction of the appellate authority, Appellate Tribunal or court; Applies where the refund arises out of such an order.
Relevant date: unutilised ITC, inverted duty structure: End of the financial year in which the claim for refund arises; Applies only to refund of unutilised ITC under the inverted duty case of section 54(3). The tax period within the year does not matter. It does not apply to ITC stuck because of exports without payment of tax, which uses the export dates.
Relevant date: provisional assessment: Date of adjustment of tax after the final assessment; Applies where tax was paid provisionally.
Relevant date: tax borne by a person other than the supplier: Date of receipt of goods or services or both by such person; Applies in the case of a person other than the supplier.
Relevant date: any other case: Date of payment of tax; Residuary rule. Use it for wrongly paid or excess tax where no special case applies.
Refunds of ITC allowed: Only for (i) zero-rated supplies made without payment of tax and (ii) inverted duty structure; Inverted duty refund is not allowed where the output supplies are nil-rated or fully exempt, and certain notified goods or services are excluded.
Small refunds: No refund is paid if the amount of tax and any other amount refundable is less than ₹1,000; Section 54(14) sets this limit. Compare it with the total amount refundable.

How to solve Refund under GST: Section 54 and Relevant Date questions

Use this method for any section 54 question, whether it asks for the type of refund, the relevant date or the last date to apply.

1Identify the claimant and the nature of the amount: tax on export, unutilised ITC, excess or wrongly paid tax, provisional assessment, order-based refund, or tax borne by a person other than the supplier.
2Check that the law allows a refund in that situation. For ITC, confirm it is a zero-rated supply without payment of tax or an inverted duty case.
3Pick the correct relevant date from the case type. Read the facts for the mode of export, the order of invoice and payment, or the date of the order.
4Separate the two ITC cases. Unutilised ITC on exports made without payment of tax uses the export dates for goods or services. Unutilised ITC under the inverted duty structure uses the end of the financial year in which the claim arises.
5Add two years to the relevant date to find the last date, and compare it with the date of the application.
6State the conclusion clearly: whether the application is in time, and the date by which it should have been or can be filed.
7Mention unjust enrichment if the claimant has passed on the tax to customers, and the ₹1,000 limit if the total amount refundable is small.

Quickest way: Case, date, add two years

When to use it: Use when time is short, especially in MCQs and in case-scenario questions that ask only for the last date or the relevant date.

Underline the trigger word in the facts: sea, air, land, post; services; advance; SEZ; deemed export; inverted duty; order; provisional; other.
Map it to the relevant date: carrier leaves or frontier crossed; return furnished for deemed exports; payment or invoice for services; financial year end for inverted duty ITC refund; order communicated; final assessment adjustment; date of payment of tax.
Add two years to that date.
Check the exceptions: ITC refund only for zero-rated or inverted duty, and no refund if the amount refundable is less than ₹1,000.
Write the answer in one line: relevant date, last date, in time or barred.

Common mistakes in Refund under GST: Section 54 and Relevant Date

Using the invoice date or shipping bill date as the relevant date for export of goods.
Students link refund timing to documents, because documents are what they file.
Fix: For goods, think of physical movement: the ship or aircraft leaving India, goods crossing the frontier, or dispatch by post.
Counting two years from the tax period for which ITC refund is claimed.
Returns are filed period by period, so the period feels like the starting point.
Fix: For an inverted duty refund, the relevant date is the end of the financial year in which the claim arises. For ITC on exports without payment of tax, use the export dates. Count two years from the relevant date, never from the tax period.
Treating all unutilised ITC as refundable.
The word 'unutilised' suggests that any balance can be taken back.
Fix: Only two cases qualify: zero-rated supplies without payment of tax and inverted duty structure. Other balances stay in the credit ledger.
Ignoring the order of advance payment and invoice for services exports.
Students remember only 'date of receipt of payment'.
Fix: If payment arrived before the invoice, the relevant date is the invoice date. If the service was completed before payment, it is the date of receipt of payment. Apply the rule to the supply as a whole; do not split it into parts.
Using the end of the financial year for an ITC refund on exports made without payment of tax.
Students see 'unutilised ITC' and apply one rule to both ITC cases.
Fix: The financial year end is only for the inverted duty case. For ITC on exports without payment of tax, use the export dates for goods or services.
Using the date of payment of tax for every refund.
It is the easiest rule to remember and feels logical for wrongly paid tax.
Fix: It is only the residuary rule. Check first for export, SEZ, deemed export, provisional assessment, order-based and other-than-supplier cases.
Forgetting unjust enrichment and the minimum refund amount.
The time limit absorbs all attention.
Fix: Add a closing line: refund goes to the Consumer Welfare Fund if the incidence of tax was passed on, and no refund is paid if the amount of tax and any other amount refundable is less than ₹1,000.

Worked examples

Example 1

Delta Garments Ltd., a registered person, makes taxable supplies at a lower GST rate than the rate on its inputs. For the tax period September 2025 it has unutilised ITC because of this inverted duty structure. It files its claim for refund in November 2025. By when must it apply?

Show the solution

Nature of claim: refund of unutilised ITC because the tax rate on inputs is higher than on output supplies. This is the inverted duty case, one of the two cases where an ITC refund is allowed. The outputs are taxable, not nil-rated or exempt.
When the claim arises: the claim is filed in November 2025, which falls in financial year 2025-26 (1 April 2025 to 31 March 2026). So the claim arises in 2025-26.
Relevant date: for the inverted duty case, it is the end of the financial year in which the claim for refund arises, that is, 31 March 2026.
Time limit: two years from the relevant date, so the application must be made before the expiry of two years from 31 March 2026, that is, by 31 March 2028.
The September 2025 tax period has no effect on the relevant date.

Answer: The relevant date is 31 March 2026. Delta Garments Ltd. can apply for the refund up to 31 March 2028.

Example 2

Ravi Consulting Pvt. Ltd. exports consultancy services to a foreign client and pays IGST on the export. The whole consideration of $5,000 was received in convertible foreign exchange on 20 December 2026, before the invoice. It issued the invoice on 10 January 2027. It claims a refund of the IGST paid. What is the relevant date, and by when must it apply?

Show the solution

Nature of claim: refund of tax (IGST) paid on export of services, so the services rule for the relevant date applies.
Order of events: payment of the whole consideration, in convertible foreign exchange, came on 20 December 2026. The invoice came later, on 10 January 2027. So payment was received in advance, before the date of issue of the invoice.
Relevant date: where payment for the services is received in advance before the invoice, the relevant date is the date of issue of the invoice, 10 January 2027. The supply is treated as a whole, not split into parts.
Time limit: two years from 10 January 2027, so the application must be made before the expiry of two years from that date, that is, by 10 January 2029.

Answer: The relevant date is 10 January 2027 (date of issue of the invoice, as payment was received in advance). Ravi Consulting Pvt. Ltd. can apply for the refund up to 10 January 2029.

Exam tips

Write the relevant date as a one-line heading before you count the two years. Examiners give marks for the correct date even if the last date is miscounted.
In case-scenario MCQs, look at the sequence of events: advance, invoice, shipment, order. The trap is usually a date placed to look like the relevant date.
When asked about the 'types of refund', list the situations in a short bullet list and then give the relevant date for each in a second list.
Learn the relevant date rules as a fixed list. Questions often combine two situations in one fact pattern, such as an export refund and wrongly paid tax.
Keep the two ITC refunds apart: ITC stuck because of exports without payment of tax uses the export dates, while inverted duty ITC uses the financial year end of the claim.
Close descriptive answers with unjust enrichment and the ₹1,000 limit in one line each.

Practice questions from Refunds

Refund under GST: Section 54 and Relevant Date: frequently asked questions

Who can claim a refund under section 54 of the CGST Act?

Any person who has paid tax, interest or any other amount and is entitled to a refund can apply. This includes registered persons, such as exporters, and others, such as a buyer who paid tax on a supply that was not provided. The claim must be made within two years of the relevant date.

What is the relevant date for refund of GST on export of goods?

For goods sent by sea or air, it is the date the ship or aircraft leaves India. For goods sent by land, it is the date the goods pass the frontier. For goods sent by post, it is the date the post office dispatches them to a place outside India.

What is the time limit for claiming a GST refund?

You must apply before the expiry of two years from the relevant date. The relevant date differs for each type of refund, so you must identify the case first. For exports, use the export dates. For unutilised ITC under the inverted duty structure, it is the end of the financial year in which the claim arises.

Can I claim a refund of any unutilised input tax credit?

No. A refund of unutilised ITC is available only for zero-rated supplies made without payment of tax and for inverted duty structure. In all other cases, the unused credit stays in your electronic credit ledger.

What is the relevant date if tax was paid by mistake?

If no special case applies, the relevant date is the date of payment of tax. If the refund arises from an order of an appellate authority, Tribunal or court, the relevant date is the date the order is communicated. For provisional assessment, it is the date of adjustment after final assessment.