| Authored by R & D Law Chambers LLP | Practice led by Ravish Bhatt. Dual-qualified lawyer (India and England & Wales) | Bar Council of Gujarat, Enrolment G/504/2008 | SRA (non-practising) Registration No. 492 477 | ADIT, Chartered Institute of Taxation, London
Published: 3 October 2026 | Last reviewed: 3 October 2026 |
| This article states the position under sections 54 and 56 of the Central Goods and Services Tax Act, 2017 (the CGST Act), section 56 as amended by the Finance Act, 2023 from 1 October 2023, and rules 89, 90, 94 and 96 of the Central Goods and Services Tax Rules, 2017 (the CGST Rules), as at 3 October 2026. Refunds on inverted duty structures and to non-exporters are not covered. |
| Short answer. An exporter’s refund runs on one of two clocks. IGST paid on exported goods is refunded through Customs on a shipping bill that counts as the application only once the export manifest and a valid GSTR-3B are on record. Every other refund starts with Form GST RFD-01 and must be decided within sixty days of a complete application, with interest after that. And since 6 August 2026, rule 96(10) cannot be applied to refunds still pending when it was omitted. |
Index of Topics
- Two Refund Systems, Two Clocks
- When an IGST Export Refund Is Treated as Filed
- A Deficiency Memo Restarts the Application, Not the Limitation
- Interest on a Delayed Refund: From Day Sixty-One
- Rule 96(10) After Goodluck India
- When the Gujarat High Court Steps In
- Frequently Asked Questions
- How R & D Law Chambers Works on These Matters
1. Two Refund Systems, Two Clocks
| Short answer. Exports are zero-rated, and refunds are claimed under section 54 of the CGST Act. IGST paid on goods exported goes through Customs under rule 96. Refunds of unutilised credit on exports under bond or letter of undertaking, and IGST on exported services, are claimed in Form GST RFD-01 under rule 89. Procedure, dates and remedies differ. |
For goods exported on payment of IGST, rule 96(1) makes the shipping bill itself the refund application, and the Customs system credits the amount once the conditions are met. For services exported on payment of IGST, rule 96(9) sends the claim to Form GST RFD-01 and rule 89. Refunds of accumulated credit on zero-rated supplies made without payment of tax also go through Form GST RFD-01.
The first question in any refund dispute is therefore which system the claim sits in. The answer decides when the claim was made, which officer decides it, and which deadlines run against the department.
2. When an IGST Export Refund Is Treated as Filed
| Short answer. Under rule 96(1) the shipping bill is deemed to be the refund application, but only when the carrier has filed the departure or export manifest and the exporter has filed a valid GSTR-3B. If the shipping bill and GSTR-1 data do not match, the application is deemed filed only when the mismatch is rectified. |
Most delayed IGST export refunds are not decisions at all. These are claims the system has not yet treated as filed, because the manifest is missing, the GSTR-3B is not valid, or the shipping bill does not match Table 6A of GSTR-1. The proviso to rule 96(1) fixes the deemed filing date as the date of rectification in a mismatch case.
The practical sequence is to confirm the manifest, confirm the return, and reconcile the shipping bill with GSTR-1 invoice by invoice. Only once all three are in order is there an application whose delay can be complained of.
3. A Deficiency Memo Restarts the Application, Not the Limitation
| Short answer. For RFD-01 claims, rule 90(2) gives the officer fifteen days to scrutinise the application and either acknowledge it in Form GST RFD-02 or issue a deficiency memo in Form GST RFD-03. A deficiency memo requires a fresh application, but the time from the first filing to the memo is excluded from the two-year limit in section 54(1). |
Section 54(1) requires the claim within two years from the relevant date, and section 54(7) requires the order within sixty days of receipt of a complete application. Rule 90(2) sets the fifteen-day scrutiny period, and an acknowledgement in Form GST RFD-02 records the filing date from which the sixty days run.
Rule 90(3) requires the applicant to file a fresh application after a deficiency memo. Its proviso then excludes the period from the original filing to the communication of the deficiencies when computing the two-year limit for the fresh claim. A claimant that receives a memo near the end of the limitation period has not lost the claim by refiling, provided it refiles promptly and keeps both acknowledgements.
4. Interest on a Delayed Refund: From Day Sixty-One
| Short answer. Section 56 makes interest payable where a refund ordered under section 54(5) is not paid within sixty days of receipt of the application. Since 1 October 2023 interest runs for the period of delay beyond sixty days, computed as prescribed. Rule 94(2) excludes delay caused by the applicant, such as late replies to a notice in Form GST RFD-08. |
The rate is the notified rate, which may not exceed six per cent under the main provision. Where the refund arises from an order of an adjudicating authority, Appellate Authority, Appellate Tribunal or court that has attained finality, the proviso allows a rate not exceeding nine per cent from the sixty-first day after the consequential application.
Rule 94(2), in force from 1 October 2023, excludes two periods from the delay: time beyond fifteen days that the applicant takes to reply in Form GST RFD-09 or furnish documents after a notice in Form GST RFD-08, and time taken to furnish or validate correct bank details. Prompt replies preserve the interest claim.
5. Rule 96(10) After Goodluck India
| Short answer. Rule 96(10) barred IGST export refunds where the exporter had received supplies or imports under specified concessional notifications. It was omitted from 8 October 2024 without a saving clause. On 6 August 2026 the Supreme Court held in Goodluck India Limited v Union of India that the omission applies to all proceedings pending on that date. |
The Supreme Court (2026 INSC 821) applied the Constitution Bench decision in Kolhapur Canesugar Works Ltd v Union of India, (2000) 2 SCC 536: where a rule is omitted without a saving clause or a legal fiction continuing pending proceedings, those proceedings cannot continue under it (paragraphs 5 to 7). It held that the GST Council’s recommendation that the omission be prospective was advisory and did not bind the rule-making authority (paragraph 7), dismissed the Revenue’s appeals, and dismissed as infructuous the assessees’ challenges to the validity of the rule (paragraph 1).
The Court also directed High Courts to list pending rule 96(10) cases expeditiously (paragraph 9). An exporter whose refund was withheld, rejected or recovered on the strength of rule 96(10), and whose proceedings were pending on 8 October 2024, should now press for the claim to be processed without that restriction.
6. When the Gujarat High Court Steps In
| Short answer. A rejected refund is an order appealable under section 107. A refund that is simply not decided is different: section 54(7) sets a sixty-day limit, and a petition under Article 226 asking the High Court to direct a decision within that framework does not bypass any appeal, because there is no order to appeal against. |
The distinction matters for remedy. Where the officer has rejected the claim on the merits, the appeal is the ordinary route and the alternative remedy rule applies. Where the officer has neither acknowledged, nor issued a memo, nor decided the claim within the statutory periods, the grievance is inaction, and the remedy sought is a direction to act and to pay interest under section 56.
7. Frequently Asked Questions
Why has my IGST refund on exported goods not been paid?
Under rule 96(1) of the CGST Rules, the shipping bill becomes the refund application only once the export manifest and a valid GSTR-3B are on record. A mismatch between the shipping bill and GSTR-1 postpones the deemed filing date until it is rectified. Most delayed IGST export refunds are claims not yet treated as filed.
What is the time limit for claiming a GST refund?
Section 54(1) of the CGST Act requires the claim within two years from the relevant date, which depends on the type of refund. If a deficiency memo is issued, the time from the original filing to the memo is excluded under the proviso to rule 90(3) when computing the limit for the fresh application.
When does interest start on a delayed GST refund?
Under section 56, interest runs for the period of delay beyond sixty days from receipt of the application, at the notified rate not exceeding six per cent, or nine per cent where the refund arises from an order that has attained finality. Rule 94(2) excludes delay caused by the applicant.
Can rule 96(10) still be used to deny my export refund?
Not in proceedings pending on 8 October 2024, when it was omitted without a saving clause. The Supreme Court held on 6 August 2026 in Goodluck India Limited v Union of India (2026 INSC 821) that the omission applies to all such pending proceedings.
Should I appeal or file a writ if my refund is stuck?
If the refund has been rejected by order, the appeal under section 107 is the ordinary route. If it has not been decided at all within the periods in rule 90 and section 54(7), there is no order to appeal, and a petition seeking a direction to decide the claim and pay interest is the remedy available.
8. How R & D Law Chambers Works on These Matters
R & D Law Chambers LLP is an Ahmedabad law firm. The practice advises exporters on GST refund claims under section 54 and rules 89 and 96, on deficiency memos and refund show cause notices, on interest under section 56, on appeals, and on petitions before the Gujarat High Court.
The practice advises on identifying the refund system and filing date, on limitation and interest, and on the effect of the omission of rule 96(10) on pending claims.
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| General information on Indian law as at 3 October 2026, not advice on any facts. The validity of rule 96(10) itself was not decided in Goodluck India. |