Indirect Tax Laws and Practice · Zero Rated Supplies and Deemed Exports

Refund Application under Rule 89 of CGST Rules

Q: What is the time limit to file a refund under section 54?

You must apply before the expiry of two years from the relevant date. The relevant date depends on the type of claim, for example the date the ship or aircraft leaves India for goods exported by sea or air.

Q: Which form is used to claim a GST refund under Rule 89?

Section 54 says the application is made in the form and manner prescribed. Under the CGST Rules, the refund application is filed in Form GST RFD-01 on the common portal. The steps after filing are also set by the Rules.

Q: Do I need to attach documents for every refund claim?

You must attach evidence that a refund is due. Evidence that the tax incidence was not passed on is needed if the claim is ₹2,00,000 or more. For a claim less than ₹2,00,000, a declaration is enough.

Q: Within how many days is the refund order passed?

The proper officer must issue the order within sixty days from the date of receipt of an application complete in all respects. For zero-rated supplies, 90% can be refunded provisionally before the final order.

Updated 11 October 2026 · Fact-checked

You claim a GST refund by an application under section 54 of the CGST Act, in the form and manner prescribed by the CGST Rules (Rule 89, Form GST RFD-01). Apply within two years from the relevant date, attach the required evidence, and expect an order within sixty days of a complete application.

Understand Refund Application under Rule 89 of CGST Rules

A refund is money the government returns to you because you paid too much tax, or because the law does not let you keep credit you have built up. Section 54 of the CGST Act gives the right and sets the time limit, the evidence rule and the order timeline. The CGST Rules (Rule 89) prescribe the form and manner of applying. Think of section 54 as the "what and when" and the Rules as the "how".

Section 54(1) says the application is made "in such form and manner as may be prescribed". Under the CGST Rules, this is Form GST RFD-01 on the GST portal. That detail comes from the Rules, not from the text of section 54. The same route covers refund of tax paid on exports, unutilised input tax credit (ITC) on zero rated supplies, ITC accumulated under an inverted duty structure, and tax paid by mistake.

Time is the first test. Under section 54(1), the application must be made before the expiry of two years from the relevant date. The relevant date differs by case. For goods exported by sea or air, it is the date the ship or aircraft leaves India. For services exported, it is the date of receipt of payment in convertible foreign exchange (or Indian rupees where RBI permits), or the date of invoice if payment came in advance. For unutilised ITC under the inverted duty case, that is, under clause (ii) of the first proviso to section 54(3), the relevant date is the due date for filing the section 39 return for the period in which the claim arises (Explanation (2)(e)).

Clause (e) is limited to that inverted duty case. It does not cover clause (i), zero rated supplies made without payment of tax. For a zero rated supply, take the relevant date from the specific clause: (a) for goods exported, (c) for services exported, (b) for deemed exports, or (ba) for supplies to a Special Economic Zone developer or unit. In any other case, it is the date of payment of tax.

The second test is proof. Section 54(4) requires documentary evidence to show that a refund is due, and evidence that the incidence of tax was not passed on to another person. If the claim is less than two lakh rupees, you need not furnish such evidence. You file a declaration that the incidence was not passed on. If the claim is ₹2,00,000 or more, you furnish the evidence.

The steps after filing, such as the acknowledgement and any deficiency memo, come from the CGST Rules and not from section 54, so learn them as procedure. What section 54(7) itself says is that the proper officer must issue the order within sixty days from the date of receipt of an application complete in all respects.

Key rules to remember

Time limit for refund claim: Application before expiry of 2 years from the relevant date; Section 54(1). Count from the relevant date, not from the date of supply or invoice, unless that is the relevant date.
Relevant date: goods exported by sea or air: Date on which the ship or aircraft leaves India; For export by land it is the date goods pass the frontier. By post it is the date of despatch by the Post Office.
Relevant date: services exported: Date of receipt of payment in convertible foreign exchange (or INR where RBI permits); if advance received, date of invoice; Explanation (2)(c) to section 54.
Relevant date: unutilised ITC (inverted duty): Due date for filing section 39 return for the period in which the claim arises; Explanation (2)(e). It applies only to unutilised ITC under clause (ii) of the first proviso to section 54(3), the inverted duty case. For zero rated supplies, use clause (a) for goods exported, (c) for services exported, (b) for deemed exports or (ba) for supplies to an SEZ developer or unit. Do not use the month-end of the tax period.
Relevant date: any other case: Date of payment of tax; Residual clause (h). Use it only when no specific clause applies.
Evidence threshold: Claim < ₹2,00,000 → declaration on non-passing of incidence is enough; Section 54(4) proviso. At ₹2,00,000 or more, furnish evidence.
Order timeline: Order within 60 days from receipt of application complete in all respects; Section 54(7).
Minimum refund: No refund under section 54(5) or (6) if amount < ₹1,000; Section 54(14). A refund of exactly ₹1,000 is payable.
Provisional refund: 90% of the claim on a provisional basis for zero-rated supplies; Section 54(6). Applies to registered persons other than notified categories. Final order follows verification.

How to solve Refund Application under Rule 89 of CGST Rules questions

Use this method for any question on filing a refund application. Work through the facts in order and state the law at each step.

1Identify the type of refund: export of goods or services, unutilised ITC, inverted duty, deemed export, or excess payment. This decides the relevant date and conditions.
2Fix the relevant date from the Explanation to section 54. Pick the specific clause first and use the residual clause only if none fits.
3Add two years to the relevant date. Check whether the application date falls before expiry. If not, the claim is time-barred.
4List the documents. Show a refund is due. For a claim of ₹2,00,000 or more, also furnish evidence that incidence of tax was not passed on. For a claim less than ₹2,00,000, a declaration is enough.
5State the filing step: section 54(1) leaves the form and manner to be prescribed, and under the CGST Rules the application is made in Form GST RFD-01 on the common portal.
6Check for blocks: unfiled returns or unpaid dues can lead to withholding or deduction under section 54(10), and the amount must be at least ₹1,000.
7State the timeline and outcome: order within sixty days of a complete application, with 90% provisional refund possible for zero-rated supplies. Give a clear conclusion.

Quickest way: Three-check shortcut for refund application questions

When to use it: Use it in MCQs and short case questions where you must decide whether a claim is valid or on time.

Check 1, type and relevant date: match the case to its clause and write the date.
Check 2, two years: add 2 years and compare with the filing date.
Check 3, money and proof: is the claim less than ₹2,00,000 (declaration is enough) or less than ₹1,000 (no refund under section 54(5) or (6))?
If all three pass, add the sixty-day order rule and answer.

Common mistakes in Refund Application under Rule 89 of CGST Rules

Counting two years from the invoice date or the date of supply
Students assume the supply date is always the start point.
Fix: Always find the relevant date from the Explanation to section 54. Use the date of payment of tax only when no earlier clause applies.
Using the end of the tax period as the relevant date for unutilised ITC
The claim arises at the end of a period, so it feels natural.
Fix: The relevant date is the due date for furnishing the section 39 return for that period.
Demanding evidence of non-passing of incidence for every claim
Students forget the proviso to section 54(4).
Fix: For a claim less than ₹2,00,000 a declaration is enough. Evidence is needed when the claim is ₹2,00,000 or more.
Treating the sixty-day period as running from the date of filing
Students overlook the words "complete in all respects".
Fix: The period runs from receipt of a complete application. A deficient application does not start the clock.
Saying a refund of ₹1,000 is not payable
Confusion over the words "less than one thousand rupees".
Fix: Only amounts below ₹1,000 are not paid. ₹1,000 is payable.
Assuming the refund is always paid to the applicant
Students forget the Consumer Welfare Fund route.
Fix: Under section 54(5) the amount is credited to the Fund referred to in section 57 (the Consumer Welfare Fund), unless it falls in a category in section 54(8), such as export refunds and unutilised ITC refunds, which are paid to the applicant. Section 54(9) allows no refund except in accordance with section 54(8).

Worked examples

Example 1

Ravi Exports Pvt. Ltd., Chennai, exported goods by sea. The ship carrying the goods left the Indian port on 20 August 2025. The invoice was dated 10 August 2025 and the tax was paid on 5 August 2025. Find the last date by which the refund application of tax paid on these exported goods can be made.

Show the solution

Type of claim: refund of tax paid on goods exported by sea.
Relevant date: the date on which the ship leaves India, i.e. 20 August 2025. The invoice and tax-payment dates are not relevant.
Time limit: application before expiry of two years from the relevant date (section 54(1)).
Two years from 20 August 2025 ends on 20 August 2027, so the application must be made before the expiry of that period.

Answer: The application must be made before the expiry of two years from 20 August 2025, i.e. by 20 August 2027. The invoice date and the tax-payment date do not matter.

Example 2

Mehta Textiles Ltd. has accumulated unutilised ITC of ₹1,80,000 for a tax period and applies for a refund. A second claim by Shah Dyes Ltd. for the same type of refund is ₹6,40,000. Explain the evidence each must furnish regarding incidence of tax and state the time within which the officer must pass the order if both applications are complete.

Show the solution

Evidence rule: section 54(4) needs evidence that a refund is due and evidence that the incidence of tax was not passed on.
Mehta Textiles: ₹1,80,000 is less than ₹2,00,000. Under the proviso it need not furnish documents on incidence. It files a declaration, based on the evidence available, that incidence was not passed on.
Shah Dyes: ₹6,40,000 is not less than ₹2,00,000 (it is ₹2,00,000 or more), so the proviso does not help it. It must furnish the documentary or other evidence on non-passing of incidence along with the evidence that a refund is due.
Timeline: for both, the proper officer must issue the order within sixty days from receipt of the application complete in all respects (section 54(7)).

Answer: Mehta Textiles files a declaration only. Shah Dyes must furnish documentary evidence of non-passing of incidence. In both cases the order must be issued within sixty days of receipt of a complete application.

Exam tips

Practise relevant-date questions. MCQs commonly give several dates (invoice, payment, shipping) and test whether you pick the right one.
Remember the two thresholds: ₹2,00,000 for the declaration rule (declaration only if the claim is less than ₹2,00,000) and ₹1,000 for minimum refund. They are easy to swap in an MCQ.
In case-based questions, write the section number with the rule. Section 54(1) for time, 54(4) for evidence, 54(7) for sixty days.
Say that section 54 leaves the form and manner to the Rules, and that under the CGST Rules the application is made in Form GST RFD-01 on the common portal.

Practice questions from Zero Rated Supplies and Deemed Exports