Exporters of services can get GST back because exports are zero-rated: you either export under an LUT and claim a refund of unused input tax credit, or pay IGST on the export and claim that IGST back. Either way, the claim is filed on Form GST RFD-01, and most delays come from one thing: documents that do not tie together, especially invoices, foreign inward remittance proof and the returns you have already filed.
Key takeaways
- Export of services is a zero-rated supply under Section 16 of the IGST Act, which is what makes a refund possible.
- Two routes: export under LUT (no IGST) and claim unutilised ITC, or pay IGST and claim that IGST as a refund.
- The refund application is Form GST RFD-01, filed on the GST portal.
- Proof that you received payment in convertible foreign exchange (or INR where RBI permits) is central. FIRA, FIRC or bank advice is what you will be asked for.
- The EDF does not change your GST position, but a clean EDF and FIRA trail makes the refund file easier to defend.
First, make sure it is an export
A refund only works if the supply qualifies as an export of services. Section 2(6) of the IGST Act sets five conditions:
- The supplier is located in India.
- The recipient is located outside India.
- The place of supply is outside India.
- Payment is received in convertible foreign exchange, or in Indian rupees where RBI permits.
- The supplier and recipient are not merely establishments of a distinct person.
If any condition fails, the supply is not an export and the refund claim will not hold. The place of supply test trips up more exporters than any other, particularly for intermediary-type services. Our article on the five export conditions goes through each one.
The two refund routes compared
| Export under LUT | Export with IGST paid | |
|---|---|---|
| Tax on the export invoice | None | IGST charged on the invoice |
| Invoice wording | "Supply meant for export under LUT without payment of IGST" | IGST shown as normal |
| What you claim back | Unutilised input tax credit | The IGST paid on exports |
| Cash flow | No tax outflow on the export | IGST paid upfront, recovered later |
| Prerequisite | LUT filed on Form GST RFD-11 for the year | None beyond normal registration |
| Refund form | RFD-01 | RFD-01, with a different refund category and statement |
For most service businesses, the LUT route is simpler because no tax leaves your bank account on the export itself. You only claim back the GST you paid on inputs such as software subscriptions, rent and professional fees. The IGST route ties up cash until the refund arrives, though some businesses choose it for their own reasons. Your CA can tell you which suits your input structure.
The refund process, step by step
The exact screens and timelines are set by the GST portal and the refund rules, which change from time to time. The broad sequence:
- File your returns for the period. Export invoices go into GSTR-1 (Table 6A covers exports) and your summary return must be filed. Refund claims are checked against what you reported.
- Collect payment evidence. For each export invoice in the claim, gather the FIRA, FIRC or bank advice showing receipt in foreign exchange.
- Prepare the statements. The refund application needs invoice-wise details of exports and their realisation. Your CA will use the statement format the portal requires.
- Compute the refund. Under the LUT route, the refund of ITC is computed using a formula linked to zero-rated turnover. Your CA or software handles this.
- File RFD-01 on the portal with supporting documents.
- Respond to queries. The officer may issue a deficiency memo or ask for clarifications. Respond within the time given.
- Track the order. Once sanctioned, the refund is credited to your registered bank account.
Where delays come from
Most refund delays are self-inflicted and avoidable. The common ones:
Invoice values that do not match returns
If your refund statement says ₹14,20,000 of exports and your GSTR-1 says ₹14,02,000, expect a query. Reconcile before filing.
Missing or mismatched payment proof
Each invoice needs a matching receipt. When a client pays three invoices in one transfer, or deducts bank charges, the FIRA amount will not equal any single invoice. Keep the client's remittance advice that shows the split. Our article on FIRA vs FIRC explains which document your bank issues.
Wrong or vague purpose codes
If the purpose code on the inward remittance does not look like an export of services, officers may question whether the receipt is export proceeds at all. Ask the client or your bank to use a code that fits your service, and correct errors early with a purpose code correction letter.
No LUT for the period
If you issued invoices without IGST but had not filed the LUT for that financial year, the LUT route is in trouble. File the LUT on RFD-11 before the first export invoice of each year.
Place of supply challenges
Some services, especially where you act as an intermediary arranging supplies for a foreign principal, may be treated as having a place of supply in India. That makes them non-exports. Settle the classification with your CA before you claim.
A worked example
Lumen Analytics Pvt Ltd exports data analytics services under LUT. In the quarter it invoiced USD 60,000 to two clients, received every rupee through its bank, and spent ₹3,40,000 of GST on inputs, of which it could not use most because it has little domestic revenue.
Before filing RFD-01, its accountant does three checks. First, the invoice list matches GSTR-1 Table 6A to the rupee. Second, each invoice has a FIRA, and two invoices paid together are explained by the client's remittance advice. Third, the LUT for the year is on file. The claim goes in clean. Any query that follows is about computation, not missing papers.
Where the EDF fits
The EDF is a FEMA declaration made to your AD bank. It does not change GST or income tax. But the same documents serve both: your export invoice, the FIRA, and the bank's realisation record. Unrealised exports can block eBRC and cause GST refund problems. Keeping your EDF filings on time and your EDPMS entries closed means the payment trail an officer wants to see is already in order.
This is general information, not legal or tax advice. Refund rules and portal procedures change, so work with your CA on each claim.
Frequently asked questions
Which form is used for GST refund on export of services?
The refund application is Form GST RFD-01, filed on the GST portal. If you export under LUT, the LUT itself is filed separately on Form GST RFD-11 before you start exporting in the year.
Do I get a refund if I export under LUT?
You do not pay IGST on the export, so there is no IGST to refund. What you can claim is the input tax credit you could not use because your exports are zero-rated. The amount is computed using the formula in the refund rules.
Is FIRA mandatory for a GST export refund?
You need to show that payment was received in convertible foreign exchange, or in rupees where RBI permits. A FIRA, FIRC or bank advice is the usual evidence. Ask your CA what the officer in your jurisdiction typically expects.
Does filing the EDF help my GST refund?
The EDF is a FEMA document and does not change your GST position. It helps indirectly: a clean EDF and realisation trail means your invoices and payments are already matched, which is exactly what a refund officer checks.
Why was my refund delayed with a deficiency memo?
Usually because a document was missing or figures did not match: invoice totals against returns, receipts against invoices, or a missing LUT. Fix the specific gap and refile as your CA advises.
Bottom line
GST refunds on exports are routine when invoices, returns and foreign receipts line up. Start with a correct GST export invoice carrying the LUT wording, and keep each FIRA with its invoice from day one.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.