🌐 GST Refund Process – Export Under LUT (Without Payment of IGST)

🧾 1. Understanding the LUT (Letter of Undertaking)

• Purpose: LUT allows the exporter to export goods or services without paying IGST at the time of export.
• Who can file: Any registered taxpayer who has not been prosecuted for tax evasion exceeding ₹250 lakh under any indirect tax law.
• Validity: The LUT is valid for one financial year and must be filed before effecting exports.
• Form: RFD-11 (filed online on GST portal).

⚙️ 2. Conditions for Claiming Refund of ITC

To claim refund under LUT route:

• Goods/services must be exported out of India.
• No IGST should be paid on such exports.
• Input Tax Credit (ITC) must be accumulated from inputs or input services used in making such zero-rated supplies.
• The export proceeds must be realized in foreign convertible currency (or INR wherever permitted) within the time limit under FEMA (usually 9 months).

🪜 3. Step-by-Step Refund Process

1. Step 1: File LUT (Form RFD-11)

   • Log in to www.gst.gov.in → Services → User Services → Furnish Letter of Undertaking (LUT)
   • Upload LUT for the current financial year.
   • Once approved, you can make exports without payment of IGST.

2. Step 2: Make Zero-Rated Supply

   • Raise export invoice clearly mentioning “Supply meant for export under LUT without payment of IGST”.
   • File Shipping Bill (for goods) or FIRC/BRC (for services).
   • Report these supplies in GSTR-1 (Table 6A) and GSTR-3B (Zero-rated supplies).

3. Step 3: Compute Refundable ITC

   Refund of unutilized ITC =

   (Turnover of zero-rated supply X Net ITC) ÷ Adjusted Total Turnover

   Where:

   • Net ITC = Input tax credit availed on inputs and input services (excluding capital goods).
   • Adjusted Total Turnover = Turnover in a State excluding exempt and non-GST supplies (except zero-rated).

4. Step 4: File Refund Application (Form RFD-01)

   • Go to Services → Refunds → Application for Refund.
   • Choose Refund of ITC on account of Exports without payment of tax.
   • Select the relevant tax period.
   • Upload the following documents (PDF format):
     • Statement 3 (auto-populated export details)
     • Copy of LUT
     • Shipping bills / Export invoices
     • Bank realization certificate (BRC) or FIRC
     • Input tax credit ledger summary
     • Declaration of non-prosecution / non-passing of ITC benefit

5. Step 5: Acknowledgement by Tax Officer

   • An ARN (Application Reference Number) is generated.
   • The officer issues RFD-02 (Acknowledgment) if documents are complete, or RFD-03 (Deficiency Memo) if more info is needed.

6. Step 6: Provisional Refund (Optional)

   • If eligible, 90% of refund may be sanctioned provisionally within 7 days via RFD-04 (Provisional Order).
   • Balance 10% is released after verification.

7. Step 7: Final Sanction Order

   • Officer examines the claim and issues:
     • RFD-06 (Final Sanction Order) – refund approved
     • RFD-07 (Adjustment Order) – if any dues are adjusted
     • RFD-08 & RFD-09 – if show cause notice issued and replied

8. Step 8: Refund Credited

   • Refund amount is credited directly to the bank account mentioned in your GST registration.

📋 Time Limits

• Refund application must be filed within 2 years from the relevant date (date of export).
• Processing time: Usually 60 days from filing (beyond which interest @6% applies).

⚠️ Common Reasons for Delay/Rejection

• Mismatch in shipping bill & GSTR-1 data
• BRC/FIRC not uploaded or not matching
• Claiming ITC on ineligible inputs
• Export proceeds not realized within FEMA limit

✅ Practical Tips (From ITP)