GST Refund Calculator — exports and inverted duty structure
Businesses accumulate unutilised input tax credit in two common situations: exporting goods or services without payment of tax under a Letter of Undertaking, and selling outputs taxed at a lower rate than their inputs (the inverted duty structure). Both allow a refund of the accumulated credit through Form RFD-01, but only up to the amount produced by the statutory formulas in Rule 89. This calculator applies both formulas and caps the result at your electronic credit ledger balance, exactly as the portal does.
Rule 89(4) — zero-rated supplies without payment of tax
Refund = (Turnover of zero-rated supplies ÷ Adjusted total turnover) × Net ITC
- Net ITC = ITC availed on inputs and input services during the period; capital goods are excluded
- Export turnover of goods is the FOB value, limited to 1.5 times the value of like goods supplied domestically (Rule 89(4)(C))
- Export turnover of services counts only where payment has been received in convertible foreign exchange (or INR where permitted by RBI)
- Adjusted total turnover excludes exempt supplies other than zero-rated ones and the value of inward supplies on which tax is paid under reverse charge
Rule 89(5) — inverted duty structure
Refund = {(Turnover of inverted-rated supply ÷ Adjusted total turnover) × Net ITC} − {Tax payable on such inverted supply × (Net ITC ÷ ITC availed on inputs and input services)}
Here Net ITC means credit on inputs only — input services and capital goods do not qualify, a position upheld by the Supreme Court in VKC Footsteps (2021). The second term was amended with effect from 5 July 2022 so that output tax is scaled down proportionately, preventing an indirect refund of input-service credit.
Worked example
An exporter with ₹30 lakh of zero-rated turnover out of ₹50 lakh adjusted total turnover has Net ITC of ₹4.5 lakh. Refund = (30 ÷ 50) × 4,50,000 = ₹2,70,000, provided at least that much sits in the credit ledger. For a textile unit with ₹30 lakh of 5% output (tax ₹1.5 lakh), ITC on inputs ₹3.6 lakh and on input services ₹0.9 lakh: Part A = 0.6 × 3,60,000 = 2,16,000; Part B = 1,50,000 × (3,60,000 ÷ 4,50,000) = 1,20,000; refund = ₹96,000.
Procedure notes
File RFD-01 within two years of the relevant date, attach Statement 3 (exports) or Statement 1A (inverted), and ensure shipping bills, BRC/FIRC and GSTR-2B reconciliations are in order. Refund is debited from the credit ledger in the order IGST, CGST, SGST, and a provisional 90% may be sanctioned within seven days for exporters.
Frequently Asked Questions
Can I get refund of ITC on capital goods for exports?
Not under Rule 89(4). Exporters who want capital-goods credit back should export on payment of IGST and claim refund of that IGST instead.
Is input-service credit refundable under inverted duty structure?
No. Rule 89(5) restricts Net ITC to inputs (goods). The Supreme Court upheld this in VKC Footsteps India (2021).
What is the time limit for a GST refund claim?
Two years from the relevant date — the shipping-bill date for export of goods, date of receipt of payment for export of services, and the due date of the return for inverted duty refunds.
Which goods are barred from inverted duty refund?
Goods notified under Notification 5/2017-Central Tax (Rate), including certain edible oils, coal and (until 2022) some textiles and railway goods.
Disclaimer: This tool is for general information and estimation only. Tax rates and rules change — verify with official sources or a professional before acting. Read full disclaimer.