GST Refund of ITC on Export of Services Without Payment of Tax – RFD-01 Steps

Introduction

Export of services is treated as a zero-rated supply under GST. When services are exported under an LUT without payment of IGST, the exporter can claim a refund of the eligible unutilised Input Tax Credit (ITC) accumulated on such exports.

For many exporters, the refund process appears complicated at first. However, once the export invoices, ITC records, LUT and return data are properly reconciled, filing the refund through Form GST RFD-01 becomes fairly straightforward.

The key is not simply filing the application — it is ensuring that the figures reported in the refund application are properly supported by the books and GST returns.

Who Can Claim the Refund?

An exporter of services can generally claim refund of accumulated ITC where the supply qualifies as a zero-rated export and the export is made without payment of IGST under LUT/Bond.

Before filing the refund, the exporter should ensure that:

The supply qualifies as an export of services under GST.

A valid LUT is available for the relevant period.

Export invoices are properly reported in GST returns.

Eligible ITC has been correctly reflected in the electronic credit ledger.

The relevant conditions and documentary requirements for export of services are satisfied.

GST Refund Rate / Amount

There is no separate GST rate applicable to the refund itself. The refund represents the eligible portion of accumulated ITC attributable to zero-rated exports.

The amount is generally determined using the prescribed refund formula under Rule 89, broadly considering:

Maximum Refund = (Zero-rated Turnover ÷ Adjusted Total Turnover) × Net ITC

The actual admissible refund can therefore be lower than the total ITC appearing in the electronic credit ledger. Proper classification of eligible ITC, export turnover and adjusted total turnover is important while calculating the claim.

Steps to File GST RFD-01 for Export of Services

Verify the Export Transactions

Before opening the refund application, reconcile:

Export invoices

GSTR-1

GSTR-3B

Books of accounts

Foreign inward remittance documentation

LUT details

Electronic credit ledger

This reconciliation is one of the most important steps because differences between returns and books can lead to queries or a deficiency memo.

Check the LUT

For exports made without payment of IGST, the exporter should have a valid Letter of Undertaking (LUT) for the relevant period.

The GST Portal specifically requires a valid LUT number to be entered while filing refund claims for exports without payment of tax.

Calculate the Eligible Refund

Calculate the refund amount according to the prescribed Rule 89 formula.

Particular attention should be given to:

Eligible Net ITC

Export turnover

Adjusted total turnover

Turnover relating to zero-rated supplies

Any ineligible or restricted ITC

The refund should not simply be based on the closing balance of the electronic credit ledger.

Login to the GST Portal

Go to the GST Portal and navigate to:

Services → Refunds → Application for Refund

Select the relevant refund category:

“Refund of unutilized ITC on account of Exports (Without Payment of Tax)”

GSTN’s functionality for this category requires exporters to provide invoice details through Statement 3 while filing RFD-01.

Enter the Refund Period

Select the relevant tax period for which the refund is being claimed.

The period should be selected carefully because the export turnover and ITC considered in the calculation should correspond with the refund period and applicable GST records.

Upload / Enter Export Invoice Details

Provide the required export invoice details in the prescribed statement.

For service exporters, ensure that invoice numbers, dates, taxable values and other relevant particulars match the underlying records and GST returns.

Enter the Refund Calculation

Enter the relevant figures for:

Turnover of zero-rated supply

Adjusted total turnover

Net ITC

Maximum permissible refund

Refund amount claimed

The system will use the information entered to determine the refund amount as per the applicable provisions.

Upload Supporting Documents

Depending on the case and portal requirements, supporting documents should be maintained/uploaded appropriately.

Important records generally include:

LUT

Export invoices

Statement of export invoices

ITC reconciliation

GSTR-1 and GSTR-3B

Relevant bank/remittance documents

Calculation of refund

Other supporting documents, wherever applicable

A clean reconciliation file can make the subsequent departmental verification much easier.

Submit RFD-01

After reviewing the application, submit Form GST RFD-01 using the applicable authentication method, such as DSC or EVC.

Once successfully filed, an ARN (Application Reference Number) is generated.

Track the Refund

The refund application can be tracked on the GST Portal through:

Services → Refunds → Track Application Status

The GST Portal also allows taxpayers to track an application using the ARN without logging in.

The application may move through stages such as:

RFD-01 → RFD-02 / RFD-03 → RFD-04 / RFD-06 → RFD-05

A deficiency may result in RFD-03, while a final sanction, partial sanction or rejection is communicated through RFD-06.

Common Mistakes to Avoid

A refund application can become unnecessarily difficult when basic reconciliations are missed.

Some common issues include:

Difference between GSTR-1 and books

Incorrect export invoice details

ITC claimed but not eligible for refund

Incorrect refund period

LUT details not properly entered

Difference between refund calculation and return data

Incorrect bank account details

Claiming ITC without proper supporting documents

Bank account validation is also an important part of the process. GSTN states that bank details are validated through PFMS, and failed validation can require the taxpayer to update the bank account and re-initiate validation.

Conclusion

GST refund on export of services without payment of tax is not merely a portal-filing exercise. The real work starts before RFD-01 — with proper reconciliation of export invoices, ITC, GST returns, LUT and supporting documents.

For an exporter, a well-prepared refund claim means fewer departmental queries, smoother processing and better control over working capital.

The practical approach is simple:

Reconcile → Calculate → File RFD-01 → Track → Respond to queries, if any.

When the underlying records are accurate, the GST refund process becomes considerably more manageable.