Exports are zero-rated under GST, which means the goal is to ensure that no GST cost stays locked in the export price. Getting the GST refund for exporters right depends on choosing the right route, reporting the export data consistently and filing the refund within time.
This guide explains the two routes available, how the automated IGST refund works for goods, how to claim unutilised input tax credit in Form RFD-01, and the practical checks that keep refunds moving. It reflects the position as of September 2026, including the risk-based provisional refund system introduced from October 2025.
Key takeaways
- Under section 16 of the IGST Act, exporters can either export under LUT without paying IGST and claim refund of unutilised ITC, or pay IGST and claim refund of that tax.
- The LUT in Form RFD-11 must be filed for each financial year before making exports under that route.
- For goods exported on payment of IGST, the shipping bill itself is treated as the refund application, once GSTR-1 and GSTR-3B are filed and the export manifest is in place.
- ITC refunds for LUT exports are claimed in RFD-01, using the formula in Rule 89(4).
- Low-risk zero-rated refund claims can receive 90% provisional refund, following the amendment to Rule 91(2) effective 1 October 2025.
Two routes for GST refund for exporters
| Point | Export under LUT (no IGST) | Export on payment of IGST |
|---|---|---|
| Tax on export invoice | Nil | IGST charged and paid, often from ITC |
| What is refunded | Unutilised ITC | IGST paid on exports |
| Application for goods | RFD-01 | Shipping bill (deemed application) |
| Application for services | RFD-01 | RFD-01 |
| Working capital | No tax outflow on exports | Tax paid first, refunded later |
| Typical users | Most service exporters and many goods exporters | Goods exporters with large ITC balances |
Both routes are valid. The choice depends on your ITC position, the nature of exports and your systems.
The LUT route in practice
A Letter of Undertaking lets you export without paying IGST. It is filed online in Form RFD-11 on the GST portal for each financial year, generally before the first export of the year, and is usually accepted on filing.
Once exports are made under LUT, the ITC used for those exports can build up. You claim it back in RFD-01 under the category “refund of ITC on export of goods or services without payment of tax”.
The Rule 89(4) formula
Refund amount = (Turnover of zero-rated supplies × Net ITC) ÷ Adjusted total turnover
Example: In a quarter, a software exporter has zero-rated turnover of ₹80 lakh, domestic turnover of ₹20 lakh and net ITC of ₹6 lakh.
- Adjusted total turnover: ₹1 crore
- Refund: ₹80 lakh × ₹6 lakh ÷ ₹1 crore = ₹4.8 lakh
Net ITC here means ITC on inputs and input services; capital goods are excluded from this formula.
The IGST route for goods: refund through the shipping bill
For goods exported on payment of IGST, the refund is largely automated between the GST portal and customs (ICEGATE):
- Report the export invoice in Table 6A of GSTR-1 with the correct shipping bill number, date and port code.
- Pay the IGST through GSTR-3B for the same period.
- Customs files the export general manifest after the goods leave India.
- The shipping bill is treated as the refund claim, validated against GSTR-1 data, and the refund is credited to the bank account registered with customs.
Common reasons for delay are invoice number or value mismatches between GSTR-1 and the shipping bill, missing export manifests and bank account validation issues with customs. Checking these at the time of filing saves a lot of follow-up later.
For services exported on payment of IGST, the refund is claimed in RFD-01.
Time limits and the relevant date
A refund claim must be filed within two years from the relevant date. For goods exported by sea or air, that is generally the date the ship or aircraft leaves India. For services, it is generally the date of receipt of payment in convertible foreign exchange (or permitted rupee settlement), or the invoice date where payment was received in advance.
For export of services, remember that the payment must be received within the time allowed under foreign exchange rules for the supply to remain zero-rated.
Provisional refunds: the 90% route
Rule 91(2) was amended with effect from 1 October 2025 so that provisional refund of 90% for zero-rated supplies can be granted on the basis of system-based risk evaluation. CBIC Instruction No. 06/2025-GST dated 3 October 2025 guides officers to process low-risk claims promptly, while higher-risk claims are examined in more detail. The balance is settled on final sanction.
Clean reporting, consistent data and a good compliance history help a claim fall in the low-risk category.
Documents that support an RFD-01 claim
- Statement of invoices with shipping bill or bill of export details (goods), or foreign inward remittance details (services).
- Bank realisation certificates or foreign inward remittance certificates.
- LUT acknowledgement for the period.
- ITC reconciliation with GSTR-2B.
- Undertakings and declarations prescribed in the form.
Exporters with inverted rate structures on domestic sales may also have a separate refund option; see our guide to inverted duty structure refunds. The CBIC GST portal carries the current rules and circulars.
Frequently asked questions
Is LUT mandatory for exporters?
No. You can export under LUT without paying IGST, or pay IGST and claim a refund. The LUT is needed only if you choose to export without payment of tax.
How is the IGST refund on exports of goods claimed?
The shipping bill is treated as the refund application once GSTR-1 and GSTR-3B are filed and the export manifest is available. No separate RFD-01 is needed.
What is the time limit for an export refund?
Two years from the relevant date, such as the date the goods left India or the date payment was received for services.
Can I get a refund of ITC on capital goods for LUT exports?
The Rule 89(4) formula covers ITC on inputs and input services. Capital goods are not included in the net ITC for this refund.
If you export goods or services and want your GST refunds claimed on time and without mismatches, our GST team will be glad to set up a smooth refund process for you.
This article is general information based on the law as of September 2026, and is not legal or tax advice. Please check the facts of your own case with a professional before acting.