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

Refund of IGST Paid on Exports and Supplies to SEZ

Updated 11 October 2026 · Fact-checked

When you export goods on payment of IGST, the shipping bill is itself treated as the refund application under Rule 96 of the CGST Rules. Once the export manifest is filed and a valid GSTR-3B is furnished, Customs processes the refund and credits the IGST paid to your bank account. Services exports and SEZ supplies need a refund claim in FORM GST RFD-01.

Understand Refund of IGST Paid on Exports and Supplies to SEZ

A zero rated supply can be made in two ways. You can export under a bond or Letter of Undertaking without paying IGST, and claim a refund of unutilised input tax credit. Or you can pay IGST on the export and claim that IGST back. This page deals with the second route.

For goods, the law removes the need for a separate application. Under Rule 96(1), the shipping bill filed by the exporter is deemed to be an application for refund of the integrated tax paid on the goods exported. You do not file anything in FORM GST RFD-01 for the normal case.

The deemed application is treated as filed only when certain conditions are met. The person in charge of the conveyance must file a departure manifest, export manifest or export report covering the shipping bill number and date. You must also have furnished a valid return in FORM GSTR-3B. You must have undergone Aadhaar authentication under rule 10B.

The process is automatic. The invoice details in your GSTR-1 flow from the common portal to the system designated by Customs. Customs confirms back that the goods were exported. After the valid GSTR-3B information is received, the Customs system or proper officer processes the claim and credits an amount equal to the IGST paid on each shipping bill or bill of export to your bank account as registered and intimated to Customs.

For services, there is no shipping bill. Rule 96(9) requires the refund application for IGST paid on services exported to be filed in FORM GST RFD-01 and dealt with under rule 89. Rule 96 is silent on SEZ supplies. Treat them as zero rated supplies and apply the general refund route in rule 89. For FIRC and similar payment conditions for services, rely on your zero rated supply and refund notes, as they are not in the Rule 96 text.

Key rules to remember

Refund amount for goods exported on payment of IGST: Refund = IGST paid in respect of each shipping bill or bill of export; Rule 96(3). Credited electronically to the bank account in your registration particulars and intimated to Customs.
Deemed application for goods: Shipping bill = refund application, deemed filed only when (a) export manifest/report/departure manifest is filed, (b) valid GSTR-3B is furnished and (c) Aadhaar authentication is done; Rule 96(1)(a), (b), (c). Condition (b) has a mismatch proviso, below.
Mismatch proviso: Mismatch between shipping bill and GSTR-1 (as amended in GSTR-1A, if any) → application deemed filed on the date the mismatch is rectified; The refund clock does not start until you correct the data.
Refund for services: Application in FORM GST RFD-01, dealt with under rule 89; Rule 96(9). No deemed application for services.
Withholding grounds: Withheld if (a) request under section 54(10) or (11), (b) Customs finds export violated the Customs Act, 1962, (c) Board-authorised risk-based verification of exporter credentials, including ITC availment; Rule 96(4). In cases (a) and (c), the claim goes to the GST officer in a system-generated RFD-01 under 96(5A). In case (b), it goes to the GST officer under 96(5B) only after Customs passes an order that the goods were exported in violation of the Customs Act, 1962.
Upward price revision: Additional IGST refund claimed in FORM GST RFD-01 under rule 89; Proviso to rule 96(1). Applies only where IGST paid at export was already refunded under sub-rule (3).
Exports to Bhutan: Refund of IGST may be paid to the Government of Bhutan for notified goods; the exporter then gets no refund; Rule 96(8).

How to solve Refund of IGST Paid on Exports and Supplies to SEZ questions

Use this order for any question on IGST refund on exports or SEZ supplies.

1Identify whether the supply is goods or services, and whether the question is about export or an SEZ supply.
2Confirm IGST was actually paid. If the export was under bond or LUT, this topic does not apply; the claim is for unutilised ITC.
3For goods, treat the shipping bill as the application. Check the three conditions: export manifest or report filed, valid GSTR-3B furnished, Aadhaar authentication done.
4Check for mismatch between the shipping bill and GSTR-1 data. If there is one, fix the date of filing as the date of rectification.
5Check the withholding grounds in rule 96(4) and say which officer takes over the claim if one applies.
6For services or SEZ supplies, state that FORM GST RFD-01 is filed and handled under rule 89.
7Compute the refund as the IGST paid per shipping bill, and conclude with a clear statement of the amount and the route.
8Where the question goes beyond the rule 96 text, say so and state the general rule without a rule number.

Quickest way: Four-question check for IGST export refund

When to use it: Use this in MCQs and short case-based questions where you need the answer in under two minutes.

Goods or services? Goods: shipping bill is the application. Services: RFD-01.
Was IGST paid? If no, it is not an IGST refund case.
Are the three triggers met: manifest or report, valid GSTR-3B, Aadhaar authentication?
Any red flag: section 54(10)/(11) request, Customs Act violation, or risk-based verification? If so, the refund is withheld. For a section 54(10)/(11) request or risk-based verification, the claim is passed to the GST officer. For a Customs Act violation, the claim is passed to the GST officer only after Customs passes an order that the goods were exported in violation.

Common mistakes in Refund of IGST Paid on Exports and Supplies to SEZ

Filing RFD-01 for a normal goods export where IGST was paid.
Students carry over the services and ITC refund procedure to goods.
Fix: Remember that under rule 96(1) the shipping bill is the deemed application for goods. RFD-01 is only for services, upward price revision, and system-generated transfers after withholding.
Treating the refund as available as soon as the shipping bill is filed.
The word 'deemed' is read as automatic from the filing date.
Fix: The application is deemed filed only when the export manifest or report is filed and a valid GSTR-3B is furnished. Aadhaar authentication is also required.
Ignoring a GSTR-1 and shipping bill mismatch.
Students think the shipping bill alone drives the refund.
Fix: Under the proviso to rule 96(1)(b), the application is deemed filed on the date the mismatch is rectified.
Saying Customs always releases the refund.
Students overlook rule 96(4).
Fix: The claim is withheld on a section 54(10) or (11) request, a Customs Act violation finding, or Board risk-based verification. State the ground and the next step. Under rule 96(5A), in the section 54(10)/(11) and risk-verification cases the claim goes to the GST officer in a system-generated RFD-01. Under rule 96(5B), in the Customs Act violation case it goes to the GST officer only after Customs passes an order that the export violated the Customs Act.
Applying the goods rule to services exports.
Both are called exports and students assume the same mechanism.
Fix: For services, rule 96(9) requires an RFD-01 application dealt with under rule 89. Customs does not process it.
Claiming refund of IGST and also of unutilised ITC on the same export.
Students confuse the two zero rated routes.
Fix: Choose one route per supply: IGST paid and refunded, or without payment under bond or LUT with ITC refund.

Worked examples

Example 1

Bharat Exports Pvt Ltd, Chennai, exported goods on payment of IGST of ₹4,50,000 under one shipping bill. The conveyance carrier filed the export manifest, and Bharat has filed a valid GSTR-3B and completed Aadhaar authentication. Its GSTR-1 data matches the shipping bill. Explain how and for how much the refund is processed.

Show the solution

Goods exported on payment of IGST, so rule 96 applies and no separate application is needed.
The shipping bill is deemed to be the refund application under rule 96(1).
Check conditions: export manifest filed, valid GSTR-3B furnished, Aadhaar authentication done. All three are met, so the application is deemed filed.
No mismatch, so no delay in the filing date.
GSTR-1 invoice details go from the common portal to the Customs system, which confirms export.
Customs processes the claim under rule 96(3) and credits IGST paid per shipping bill.

Answer: Refund of ₹4,50,000 is credited electronically to Bharat's registered bank account, unless a rule 96(4) ground applies, which is not so here.

Example 2

Kaveri Traders exported goods and paid IGST of ₹2,00,000 on shipping bill A. The Customs system found a mismatch between the shipping bill and GSTR-1 data. Kaveri rectified it on 20 August. The GSTR-3B and export manifest conditions were met earlier. On which date is the refund application deemed filed, and what happens if the jurisdictional Commissioner asks to withhold refund under section 54(10)?

Show the solution

Rule 96(1)(b) proviso: on mismatch, the application is deemed filed on the date the mismatch is rectified.
The rectification date is 20 August, so the shipping bill is deemed to be the refund application filed on 20 August.
If the Commissioner requests withholding under section 54(10), rule 96(4)(a) applies and the claim is withheld.
Under rule 96(5A), the claim is transmitted to the proper officer of central, State or Union territory tax in a system-generated FORM GST RFD-01, with intimation to the exporter.
From that point, the operative application is the system-generated RFD-01, deemed filed on the date of transmission. The 20 August date no longer governs the claim.
That form is dealt with under rule 89 (rule 96(5C)).

Answer: Before any withholding, the application is deemed filed on 20 August. If the claim is withheld under section 54(10), the operative application becomes the system-generated RFD-01, deemed filed on the date of transmission (not 20 August), and it is processed under rule 89.

Exam tips

Quote the sub-rule: 96(1) for the deemed application, 96(3) for credit, 96(4) for withholding, 96(9) for services.
In case-based MCQs, scan for the red flags: GSTR-3B not filed, mismatch, Customs violation, or Aadhaar authentication missing.
Write the contrast clearly: goods have a shipping bill and no application, while services need RFD-01.
Always conclude with the amount and route. A clear final line earns marks in application questions.
Do not quote section numbers beyond those you know. Rule 96 gives the exact text for exports.

Practice questions from Zero Rated Supplies and Deemed Exports

Refund of IGST Paid on Exports and Supplies to SEZ in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CA FinalRefund of Export Duty (Section 26)

Refund of IGST Paid on Exports and Supplies to SEZ: frequently asked questions

Do I need to file RFD-01 to get IGST refund on export of goods?

Generally no. The shipping bill is deemed to be the refund application under rule 96(1). RFD-01 is needed for upward price revision refunds, and a system-generated RFD-01 is used when a claim is withheld and sent to the GST officer.

What happens if GSTR-1 and the shipping bill do not match?

The application is deemed filed only on the date the mismatch is rectified. Correct the data quickly so the refund is not delayed.

When can the IGST export refund be withheld?

Under rule 96(4), it is withheld on a request under section 54(10) or (11), when Customs finds the export violated the Customs Act, 1962, or when the Board or an authorised officer wants verification of credentials, including ITC availment, based on risk parameters.

How is the refund for export of services claimed?

You file FORM GST RFD-01 on the common portal, and it is handled under rule 89. Rule 96(9) says so. There is no shipping bill route for services.