GST : Updated Refund Filing Process for Key GST Categories

Recent Changes to the GST Refund Application Process

The Goods and Services Tax Network (GSTN) has implemented significant modifications to streamline the refund filing process for several important categories. These changes, effective as of May 8, 2025, aim to simplify procedures and improve efficiency for taxpayers seeking refunds under specific scenarios.

Key Categories Affected by the Changes

The updated refund filing process applies to the following three categories:

1. Export of Services with Payment of Tax
2. Supplies Made to Special Economic Zone (SEZ) Unit/SEZ Developer with Payment of Tax
3. Refunds for Suppliers of Deemed Exports

Major Procedural Changes

Elimination of Tax Period Selection Requirement

Previously, taxpayers were required to select specific “From” and “To” tax periods when filing refund applications. This requirement has now been eliminated for the above-mentioned categories. Taxpayers can now:

• Directly select the appropriate refund category
• Click on “Create Refund Application” to proceed with their claim
• Skip the formerly mandatory tax period selection step

Transition to Invoice-Based Filing

A fundamental change in the refund process involves the shift from “Tax Period Based Filing” to “Invoice Based Filing.” Under this new approach, taxpayers must upload eligible invoices to claim refunds in the following statements:

1. Statement 2: For Export of Services with payment of Tax
2. Statement 4: For SEZ Supplies with payment of Tax
3. Statement 5B: For Deemed Exports (applications by Suppliers)

Invoice Locking Mechanism

To prevent duplicate claims and ensure process integrity, invoices uploaded with a refund application will be automatically locked. This means:

• Locked invoices cannot be amended
• These invoices will not be available for inclusion in subsequent refund claims
• Invoices will remain locked unless:
  • The refund application is formally withdrawn, or
  • A deficiency memo is issued by the tax authorities

Compliance Requirements

Taxpayers must ensure that all required returns, including GSTR-1, GSTR-3B, and any other applicable filings, are submitted up to date before filing a refund application. Non-compliance with return filing obligations may result in delays or rejection of refund claims.

Implications for Taxpayers

These modifications represent a significant shift toward a more efficient and straightforward refund process. The invoice-based approach allows for greater specificity and reduces ambiguity in refund claims. Taxpayers should thoroughly familiarize themselves with these changes to ensure smooth processing of their refund applications.

Conclusion

The GSTN’s updates to the refund filing process demonstrate an ongoing commitment to improving the GST ecosystem. By eliminating unnecessary steps and implementing a more precise invoice-based system, these changes are expected to reduce processing time and improve the overall refund experience for eligible taxpayers.