GST Refund & LUT for Exporters — Get the ITC Back Without a Deficiency Memo
Quick answer: Exporters either export under a Letter of Undertaking and claim refund of unutilised ITC in RFD-01, or pay IGST and get it back through the shipping bill. Since 1 November 2025 low-risk claims get 90% provisionally through the system — if the first filing is complete. We reconcile invoice by invoice before filing, renew the LUT every April, and track FEMA realisation so a refund never turns into a recovery.
Last verified 4 October 2026 — rules on this page checked against the current notifications. We update it the day a rule changes.
Which refund route — and what each needs
| Situation | Route | Key document | Typical trap |
|---|---|---|---|
| Export of goods/services without IGST | LUT (RFD-11) + refund of unutilised ITC via RFD-01 | Statement 3 with invoices and BRC/FIRC | LUT not renewed in April; ITC on capital goods wrongly included |
| Export with payment of IGST | Refund through shipping bill / GSTR-1 Table 6A | Shipping bill, EGM, matched GSTR-3B | Invoice value mismatch between GSTR-1 and shipping bill blocks the claim |
| Supplies to SEZ | LUT or IGST-paid, refund by supplier | SEZ officer endorsement | Missing endorsement |
| Inverted duty structure | Refund of accumulated ITC (formula-based) | Statement 1A | Input services excluded from the formula; wrong net ITC |
| Deemed exports (EOU, Advance Authorisation supplies) | Refund by supplier or recipient | Recipient's undertaking | Both parties claiming |
| Excess cash-ledger balance / wrong head | RFD-01 (excess balance) | Ledger extract | Filing under the wrong category |
What we do
- LUT every April, and a check that every export invoice in the year sits under a live LUT
- Refund file built to the category's statement — invoice-level reconciliation of GSTR-1, GSTR-3B, GSTR-2B, shipping bills and BRC/FIRC before filing
- RFD-01 filing, RFD-03 deficiency replies, provisional-refund follow-up, and the final order
- Show-cause notices on refunds (RFD-08) and appeals where a claim is rejected
- FEMA realisation tracking and the recovery exposure on unrealised proceeds
- Pairing with IEC/DGFT and Advance Authorisation / EPCG files so the schemes and the refunds don't contradict each other
Client: An Okhla garment exporter with eight months of accumulated ITC.
Situation: Two earlier refund applications had gone into deficiency memos over invoice mismatches; the working-capital gap was being financed at bank rates.
Approach: Rebuilt the invoice-level reconciliation across GSTR-1, 2B and shipping bills, split claims by tax period correctly, and filed with BRC evidence attached.
Outcome: Claims acknowledged without deficiency; provisional refund credited within the fast-track window; balance on final order.
Client identity and certain details have been changed or withheld to protect confidentiality. Outcomes depend on individual facts and are not a guarantee of results.
Part of our GST practice. Exporters in Gurugram, Noida, Faridabad and Delhi.
Talk to us before you file anything
Frequently asked questions
LUT or pay IGST and claim refund — which is better for an exporter?
Under a Letter of Undertaking (RFD-11) you export without charging IGST and claim refund of the unutilised input tax credit; with payment of IGST you pay on the export invoice and the refund flows through the shipping bill once GSTR-1 and GSTR-3B match. LUT keeps cash in the business; the IGST route is simpler to reconcile where ITC is small. Most NCR service exporters use LUT; many goods exporters run both depending on the ITC position.
When do I file the LUT?
Before the first export of the financial year — it is valid for that year only. File it every April; an export made without a live LUT means IGST was due on that invoice, which is a common audit finding in Cyber City and Noida IT firms.
What is the time limit for a refund claim?
Two years from the relevant date — for exports of goods, the date the vessel/aircraft leaves or the goods cross the border; for services, the date of receipt of convertible foreign exchange (or the invoice date, whichever is later); for unutilised ITC, the end of the financial year in which the claim arises. Claims are filed in RFD-01 on the portal with the statement for the category.
How fast does the refund come?
Acknowledgement (RFD-02) or deficiency memo (RFD-03) within 15 days of filing; for zero-rated supplies and inverted-duty claims, system-based provisional sanction of 90% for low-risk claims has applied since 1 November 2025, with the balance after scrutiny; the final order is due within 60 days, after which interest at 6% runs. A deficiency memo restarts the clock — so the first filing must be complete.
I exported under LUT but the foreign payment is late — what happens?
Export proceeds must be realised within the FEMA timeline (ordinarily nine months). If they aren't, the IGST that was waived becomes payable with interest, and the refund already taken can be recovered. We track BRC/FIRC status against each shipping bill or invoice.
Which office processes my refund?
Your jurisdictional officer — Centre or State as assigned to your GSTIN — not the customs port. In Delhi-NCR that means CGST Delhi/Haryana/Ghaziabad or the respective State Tax office; IGST-paid export refunds are processed through ICEGATE against the shipping bill.