GST Refund on Export of Services: Routes, Docs & Steps
TL;DR - Summary
- What is a GST refund on export of services? - A GST refund on export of services is the statutory process of reclaiming excess tax, either accumulated ITC or IGST paid, from the government under Section 54 of the CGST Act, 2017, by filing Form GST RFD-01 on the GST portal.
- What are the two GST refund routes for export of services? - The two routes for a GST refund on export of services are exporting on payment of IGST and claiming a refund of the IGST paid, or exporting under a Letter of Undertaking (LUT) without paying IGST and claiming a refund of accumulated unutilised ITC, which is generally the route service exporters and freelancers prefer.
- What documents do you need for a GST refund on export of services? - The documents you need for a GST refund on export of services depend on your route: the LUT route needs a valid LUT acknowledgement and Statement 3, the IGST-paid route needs export invoices showing IGST charged and Statement 2, and both need a Bank Realisation Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC).
- How do you file RFD-01 for a GST refund on export of services? - To file RFD-01 for export of services under the LUT route, you follow six steps on the GST portal (gst.gov.in), and the application must be filed within 2 years from the relevant date.
What Is a GST Refund on Export of Services?
A GST refund on export of services is the statutory process of reclaiming excess tax, either accumulated ITC or IGST paid, from the government under Section 54 of the CGST Act, 2017. You claim it by filing Form GST RFD-01 on the GST portal.
Exports of services are treated as zero-rated supplies. That means the tax borne on the inputs used to deliver those services is meant to be returned to you as the exporter.
Take a UX designer in Bengaluru who invoices a US client $5,000 for a project. She pays 18% GST on her software subscriptions and office rent. Since her service export is zero-rated, she can claim a refund of that accumulated ITC through the GST portal.
Who Is Eligible to Claim This Refund?
Indian service exporters and freelancers who export services outside India are eligible to claim a GST refund if they have accumulated unutilised ITC or have paid IGST on their export invoices. You also need a valid GST registration and filed GSTR-1 and GSTR-3B returns for the relevant claim period.
- Exporting under a Letter of Undertaking (LUT): if you export without charging IGST on your invoices, you are eligible to claim a refund of accumulated unutilised ITC under Rule 89(4).
- Exporting with IGST paid: if you have charged and paid IGST on your export invoices, you are eligible to claim a refund of that IGST.
- IT/ITES firms and freelancers: if you incur GST on inputs such as rent, internet, professional fees and cloud services and export services under LUT, you accumulate ITC that qualifies for refund.
- Check your returns first: verify that all GSTR-1 and GSTR-3B returns are filed for the claim period before checking eligibility, because unfiled returns block the application.
- Minimum claim: the minimum refund claim threshold is ₹1,000, and claims below this amount are not processed.
⚠️ COMMON MISCONCEPTION
You do not need to be a goods exporter or have a shipping bill to be eligible. Service exporters qualify under a separate route.
What Are the Two GST Refund Routes for Service Exporters?
Service exporters have two GST refund routes. In Route 1, you export on payment of IGST and then claim a refund of the IGST paid. In Route 2, you export under a Letter of Undertaking (LUT) without paying IGST and then claim a refund of accumulated unutilised ITC. Route 2 is generally preferred by service exporters and freelancers because it avoids blocking working capital in IGST payments and then waiting for a refund.
- Route 1 (IGST-paid route): you charge IGST on the export invoice, pay it to the government, and then apply for a refund of the IGST paid. For service exporters, this requires filing RFD-01 along with a Bank Realisation Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC) and Statement 2. Unlike goods exporters, there is no shipping bill, so the refund is not auto-processed through Customs.
- Route 2 (LUT + ITC refund route): you file a LUT with the GST department, raise zero-rated invoices without charging any IGST, and then claim a refund of the ITC accumulated on domestic inputs (rent, software, internet, etc.) using the Rule 89(4) formula via RFD-01 with Statement 3.
The Rule 89(4) formula for the ITC refund is: Refund = (Turnover of zero-rated supply × Net ITC) ÷ Adjusted total turnover. The GST portal auto-computes this once you upload Statement 3 as a JSON file.
The LUT allows zero-rated invoicing from the start. It must be renewed for each financial year, and a lapsed LUT means you cannot raise zero-rated invoices for that period.
Under either route, up to 90% of the eligible refund is sanctioned provisionally in Form RFD-04 before full scrutiny is complete.
| Factor | Route 1 (IGST-paid) | Route 2 (LUT + ITC refund) |
|---|---|---|
| Who it suits | Exporters who charge and pay IGST on the export invoice | Generally preferred by service exporters and freelancers |
| Key documents | Export invoices showing IGST charged, GSTR-1 (Table 6A), GSTR-3B showing IGST paid on exports, RFD-01 with BRC/FIRC and Statement 2 | Valid LUT acknowledgement, export invoices with LUT reference number, GSTR-1 and GSTR-3B, Statement 3 (JSON), BRC/FIRC |
| Refund computation | Refund of the IGST paid | Rule 89(4) formula: (Turnover of zero-rated supply × Net ITC) ÷ Adjusted total turnover, auto-computed once Statement 3 is uploaded |
| Risk of cash blockage | Blocks working capital: you pay IGST and then wait for the refund | Avoids blocking working capital in IGST payments |
| Timeline | Up to 90% of the eligible refund sanctioned provisionally in RFD-04 before full scrutiny is complete | Up to 90% of the eligible refund sanctioned provisionally in RFD-04 before full scrutiny is complete |
⚠️ COMMON MISCONCEPTION
Many service exporters assume Route 1 (paying IGST and claiming it back) is simpler. In practice it blocks cash and requires the same RFD-01 filing anyway.
What Documents Do Service Exporters Need for a GST Refund?
The documents you need depend on your route. Under the LUT route (Route 2), you need a valid LUT acknowledgement, export invoices with the LUT reference number, GSTR-1 and GSTR-3B, Statement 3 uploaded as JSON, a BRC or FIRC, and validated bank account details. Under the IGST-paid route (Route 1), you need export invoices showing IGST charged, GSTR-1 (Table 6A), GSTR-3B showing IGST paid on exports, RFD-01 with BRC/FIRC and Statement 2, and validated bank account details.
LUT Route (Route 2) Documents
- Valid LUT acknowledgement for the relevant financial year
- Export invoices with GSTIN, LUT reference number, and zero-rated supply declaration
- GSTR-1 and GSTR-3B for the claim period
- Statement 3 with export invoice details (HSN, taxable value, ITC amounts), uploaded as JSON on the GST portal
- BRC or FIRC as proof of foreign exchange receipt
- Bank account details validated on the GST portal
IGST-Paid Route (Route 1) Documents
- Export invoices showing IGST charged
- GSTR-1 (Table 6A) reflecting the export supplies
- GSTR-3B showing IGST paid on exports
- RFD-01 with BRC/FIRC and Statement 2
- Bank account details validated on the GST portal
For certain categories, a CA certificate confirming the accuracy of the refund computation is also required.
The BRC/FIRC is the document GST officers most frequently ask service exporters for. Any delay in getting it from your bank or payment platform directly delays your refund application.
You do not need a shipping bill. Section 2(6) of the IGST Act defines export of services differently from export of goods, and the GST portal accepts a BRC or FIRC in place of a shipping bill for service exporters.
✅ PRO TIP
File GSTR-1 and GSTR-3B accurately before applying. Any mismatch between the zero-rated supplies declared in Table 6A of GSTR-1 and what appears in GSTR-3B will trigger a deficiency memo (RFD-03) and reset your processing clock entirely.
How Do You File RFD-01 for Export of Services Step by Step?
To file RFD-01 for export of services under the LUT route, you complete six steps on the GST portal (gst.gov.in): fill the Refund Pre-Application Form, confirm eligibility and select the refund type, compute the refund under Rule 89(4), prepare and upload Statement 3, submit RFD-01 to generate an Application Reference Number (ARN), and then track the acknowledgement and provisional refund.
- Complete the Refund Pre-Application Form: Log in to gst.gov.in → Services → Refunds → Refund Pre-Application Form. Enter your business details, Aadhaar, income tax data, and export information. This is a mandatory one-time form that cannot be edited after submission, so review all entries carefully before submitting.
- Confirm eligibility and select the refund type: Confirm that all GSTR-1 and GSTR-3B returns are filed for the claim period. Select the refund reason: "Refund of ITC on export of services under LUT without payment of IGST." Have your LUT reference number and BRC/FIRC ready before you proceed.
- Compute the refund under Rule 89(4): The formula is Refund = (Turnover of zero-rated supply × Net ITC) ÷ Adjusted total turnover. For example, a web designer invoices a US client ₹5,00,000 in a quarter. Net ITC for the period is ₹72,000 and adjusted total turnover is ₹5,00,000. Refund = (5,00,000 × 72,000) ÷ 5,00,000 = ₹72,000. Exclude any ITC that is ineligible under Section 17(5).
- Prepare and upload Statement 3: Enter the export invoice details in Statement 3: invoice number, date, HSN code, taxable value, and ITC amounts. Generate the JSON file and upload it on the GST portal. The portal auto-computes the refund amount using the Rule 89(4) formula once Statement 3 is uploaded.
- Submit RFD-01 and generate the ARN: Attach the BRC/FIRC as proof of foreign exchange receipt, along with the zero-rated invoice copies and the GSTR-1 acknowledgement. Submit using a Digital Signature Certificate (DSC) or EVC. An ARN is generated, and you use it to track the claim status.
- Track the acknowledgement and provisional refund: The proper officer must issue an acknowledgement (RFD-02) or a deficiency memo (RFD-03) within 15 days of filing. For zero-rated supplies, up to 90% of the eligible refund is sanctioned provisionally (RFD-04). The final sanction order (RFD-06) and payment order (RFD-05) follow on completion of scrutiny, and the final order must be issued within 60 days of the application date.
Step 2 of the RFD-01 process calls for proof of foreign exchange receipt, a FIRC or BRC. The speed of your refund is directly tied to how quickly your payment platform issues this document. Banks routinely delay BRC issuance by 2 to 3 months after a remittance is received, and every day of that delay is a day your refund application sits incomplete. Skydo issues free FIRC/BRC certificates automatically for every inward remittance, removing the single biggest document bottleneck service exporters face. Set up your account in 15 minutes.
What Is the Time Limit for Claiming a GST Refund on Exports?
The time limit for claiming a GST refund on exports is 2 years from the relevant date, as set out in Section 54(1) of the CGST Act, 2017. Missing the 2-year limit permanently forfeits the refund.
For service exporters filing under the LUT route, the relevant date is the date of the export invoice. For IGST-paid service exports, the relevant date is the date of payment of IGST. There is no provision for an extension or condonation of delay for service exporters.
The proper officer must issue an acknowledgement (RFD-02) or a deficiency memo (RFD-03) within 15 days of the RFD-01 filing. If you receive a deficiency memo, you must re-file a fresh RFD-01, and that fresh filing must still fall within the original 2-year window. The clock does not stop when a deficiency memo is issued, so re-file promptly.
If the sanctioned refund is not disbursed within 60 days of the application date, interest at 6% per annum is payable to you under Section 56 of the CGST Act.
Here is the processing timeline at a glance:
- RFD-01 filed
- RFD-02 acknowledgement within 15 days
- Provisional refund in RFD-04, up to 90%
- Final sanction RFD-06 and payment order RFD-05 within 60 days
- NEFT/RTGS disbursement 1 to 7 days after the order
⚠️ WATCH OUT
There is no GST tribunal or authority with the power to condone a missed 2-year limit. Once it lapses, the refund is gone permanently.
How Does Skydo Help You Claim a GST Refund on Export of Services Faster?
The biggest practical bottleneck in the RFD-01 process for service exporters is the FIRC/BRC, the proof of foreign exchange receipt that GST officers ask for at Step 2 of the filing process. Banks routinely delay BRC issuance by 2 to 3 months after a remittance is received, which blocks the refund application from being filed and eats into the 2-year deadline.
Skydo issues a free FIRC certificate automatically for every inward remittance, with no chasing, no wait, and no manual request to a relationship manager. Because Skydo settlements arrive within 1 working day and the FIRC is issued immediately, you can file your RFD-01 as soon as the payment is received rather than waiting months for a bank certificate.
Skydo is a cross-border payment platform for Indian service exporters and freelancers. It lets you receive international payments via virtual accounts in USD, EUR, GBP, SGD, AUD, and CAD, all free to set up. Setup takes 10 to 15 minutes, and you pay only when you transact, with no monthly fees.
Pricing has three tiers, with no hidden percentage fees that eat into your export income:
- ₹19 flat for payments under $2,000
- $29 flat for payments from $2,000 to $10,000
- 0.3% for amounts over $10,000
Is there GST on export of services?
Export of services is zero-rated under Section 16 of the IGST Act, so no GST is charged on the export invoice itself, especially under the LUT route. GST is paid on domestic inputs such as rent, software, and internet, and that is what you reclaim as a refund.
What is the time limit for a GST refund on exports?
What is the RFD-01 form used for?
Do service exporters need a shipping bill to claim a GST refund?
