Introduction
The Goods and Services Tax Network (GSTN) has rolled out significant updates to the refund filing process under various categories including Deemed Exports, Export of Services, and Supplies to SEZ Units/Developers. These changes, effective from May 8, 2025, aim to simplify the application process and improve refund efficiency for taxpayers.
In this blog, we break down the new guidelines and procedural shifts you need to be aware of.
Key Update: Refund Filing for Recipients of Deemed Exports
Refund applications filed under the category “On account of Refund by Recipient of deemed export” have undergone critical changes:
✅ 1. No Chronological Filing Required
Taxpayers are no longer required to select a specific ‘From Period’ and ‘To Period’ while filing their refund application. This eliminates the need to file applications in a strict tax period order.
✅ 2. Ensure Return Compliance
All applicable GST returns, such as GSTR-1 and GSTR-3B, must be filed up to the date of refund application. Non-filing may result in rejection or processing delays.
✅ 3. Revised “Amount Eligible for Refund” Table
A new table layout provides a clearer view of refund eligibility. Here’s what each column represents:
- Column 1: Balance in Electronic Credit Ledger (ECL) – Auto-populated values under major heads (IGST, CGST, SGST).
- Column 2: Net ITC of Deemed Exports (as per uploaded invoices) – Auto-calculated from Statement 5B.
- Column 3: Refund Amount as per Uploaded Invoices – Editable by the taxpayer based on actual claim.
- Column 4: Eligible Refund Amount – System-calculated as per Circular No. 125/44/2019-GST, ensuring debit order compliance.
- Column 5: Refund Not Eligible Due to Insufficient Balance in ECL – Highlights the gap between claim and available balance.
✅ 4. Enhanced Claim Functionality
The system now intelligently compares total ITC claimed across all heads with total ITC available in the ECL. This optimization helps taxpayers maximize refund claims, even if one specific tax head lacks sufficient balance.
✅ 5. Facing Issues? Raise a Grievance
If any difficulties arise during filing, taxpayers are encouraged to raise an issue at the GST Self-Service Portal.
Broader Changes in Refund Filing – Other Categories
GSTN has also updated the refund filing process for the following categories:
- Export of Services with Payment of Tax
- Supplies to SEZ Unit/Developer with Payment of Tax
- Refund by Supplier of Deemed Exports
✅ 1. No More ‘Tax Period’ Selection
Similar to deemed export recipients, these categories no longer require the selection of a specific From/To period. Taxpayers can directly choose the category and initiate the refund process.
✅ 2. Mandatory Return Filing
Refund applications will only be accepted if all due returns have been filed up to the date of application.
✅ 3. Shift from Tax Period to Invoice-Based Filing
These refund categories are now invoice-based, meaning claims are processed based on uploaded eligible invoices:
- Statement 2 – Export of Services with Payment of Tax
- Statement 4 – SEZ Supplies with Payment of Tax
- Statement 5B – Deemed Exports by Supplier
🔒 Important: Once invoices are uploaded in a refund application, they are locked for any amendments and cannot be reused in future claims. Invoices can only be unlocked if the refund is withdrawn or a deficiency memo is issued.
✅ Conclusion
These procedural enhancements are a positive move toward simplifying GST refund compliance and ensuring faster processing for exporters and deemed export beneficiaries. Businesses should familiarize themselves with these changes and update their internal refund SOPs accordingly.
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This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.
Published on: May 14, 2025