A GST inverted duty refund returns input credit that piled up because the tax on the goods you buy is higher than the tax on what you sell. It is claimed in Form GST RFD-01 under the Rule 89(5) formula within two years of the relevant date. The same page covers an excess cash-ledger balance, tax paid in excess or under the wrong head, SEZ supplies and deemed exports, and refunds that follow an order. We check the head, prepare the statements and file.
Section 54(3) allows a refund of unutilised input tax credit at the end of a tax period only in two cases: zero-rated supplies made without paying tax, and an inverted duty structure, where the rate of tax on inputs is higher than the rate on the output supplies. Nil-rated and fully exempt supplies do not qualify.
Each has its own relevant date, statements and papers.
Counts / Does not count
Rule 89(5): the maximum refund is (turnover of inverted-rated supplies x Net ITC / Adjusted Total Turnover) less the tax payable on those supplies.
The relevant date depends on the head; the hint under the field says which.
We did not find a government fee for Form RFD-01.
GST registration certificate
Set by the route, with no success fee. We confirm the exact amount before filing.
Input services or machinery in the claim: Only credit on input goods is refundable under the present law.
We do: Head and last-day check, the working and statements, filing of Form RFD-01, follow-up on a deficiency memo, and a reply to a notice to reject where you want one.
A case where the rate of tax on the goods you buy is higher than the rate on what you sell, so input credit piles up and cannot be used. Section 54(3) lets you claim that unutilised credit as a refund at the end of a tax period.
Not in an inverted duty claim today. Only tax on input goods counts. The 57th GST Council recommended input services from 1 November 2026 and capital goods from 1 April 2027, but that needs amendments and is not law until notified.
The due date of the GSTR-3B for the period in which the claim arises. The older rule, the last day of the financial year, no longer applies. You then have two years.
No. That case is not covered (Circular 135/05/2020). An output taxed at a concessional rate notified for your supply, at the same point in time, is covered (Circular 173/05/2022).
Claim it in Form RFD-01 under section 49(6). Form RFD-02 is issued on filing and the officer has 60 days. No fixed last day is stated for it; we confirm the position before filing.
You can claim a refund of the wrongly paid tax within two years of payment on the inter-State supply (Rule 89(1A)), after paying the correct tax. Section 77 means there is no interest on the correct payment.
For a refund of tax paid in excess or on an order, a self-declaration is enough up to ₹2 lakh and a chartered or cost accountant certificate on non-passing of tax is needed above that. It is not needed for unutilised credit or a wrong-head refund. You provide it, or we arrange one at actuals.
File Form RFD-01 with the order and its number. The relevant date is the day the order is communicated to you. If the order has attained finality, interest at 9% a year applies. A pre-deposit refund needs proof of the pre-deposit.
An acknowledgement or deficiency memo within 15 days and the officer's order within 60 days of a complete application, with 6% a year interest if later. Nobody can promise the date.
A standard claim starts at ₹2,000 + GST and a complex one at ₹6,000 + GST, with no success fee. SEZ, deemed export and order-based refunds are complex, as are claims over more than one financial year and those where we prepare the working. Above ₹50 lakh, or with an earlier rejection, we quote after review. We confirm the exact amount before filing.