Exporting your services outside India? Then you must know how GST refunds on export of services.
Many startups, freelancers, IT companies, and consultants export services to clients abroad — but face confusion on LUT, IGST refund, bank realization, and refund rejection.
This blog will explain everything with real-life examples, legal sections, and practical tips for 2025.
Table of Contents
What Is Export of Services Under GST?
As per Section 2(6) of IGST Act, a supply is treated as Export of Services if:
- Supplier is in India
- Recipient is outside India
- Place of supply is outside India
- Payment is received in convertible foreign exchange or INR as permitted by RBI
- Supplier and recipient are not related parties
Example: A software developer in Bangalore provides services to a client in the US and gets payment in USD — it’s an export of service.
Two Ways to Export Services Under GST
| Type | IGST Paid? | Refund Option |
|---|---|---|
| Export With LUT (Letter of Undertaking) | No | Refund of ITC (Input Tax Credit) |
| Export Without LUT | Yes | Refund of IGST Paid |
1. Export With LUT – No GST Charged
- File LUT in Form GST RFD-11 (valid for one financial year)
- Export service without charging GST
- Claim refund of ITC on inputs and input services used for export
Documents Required:
- LUT copy
- FIRC/BRC for foreign payment
- Invoices
- GSTR-1 & GSTR-3B matching
Common mistake: LUT not filed → refund rejected
2. Export Without LUT – IGST Paid on Export Invoice
- Charge and pay IGST on export invoice
- Claim refund of IGST paid via GSTR-1 and GSTR-3B
Documents Required:
- Shipping bill / Invoice
- FIRC/BRC
- Export details in GSTR-1 (Table 6A)
- Payment of tax in GSTR-3B
Refund is usually auto-processed if GSTR-1 and ICEGATE data matches.
Relevant GST Sections & Rules
| Provision | Description |
|---|---|
| Section 16, IGST Act | Zero-rated supply |
| Rule 96, CGST Rules | Refund of IGST on export |
| Rule 89, CGST Rules | Refund of ITC under LUT |
| Section 54, CGST Act | General refund provisions |
| Circular 125/44/2019-GST | Checklist for refund processing |
Real-Life Case on GST Refunds on Export of Services
Case 1: Freelancer in Pune – Refund Rejected Due to Missing LUT
Issue: Did not file LUT before export; applied for refund of ITC
Outcome: Refund rejected by officer citing no LUT
Solution: Filed LUT and re-applied next month with updated documents
Case 2: IT Company in Noida – IGST Refund Delayed Due to Mismatch
Issue: GSTR-1 showed $5000 export, but shipping bill on ICEGATE was not matching
Outcome: Refund stuck for 3 months
Solution: Revised GSTR-1 and got refund after clarification
Case 3: Digital Marketing Agency – Payment Received in INR from Nepal
Issue: Payment was in INR, not convertible forex
Outcome: GST Department rejected export benefit
Note: RBI permission is a must if INR is used. Otherwise, it’s not export under GST
How to Apply for Refund on GST Portal
- Log in to GST portal
- Go to Services → Refunds → Application for Refund
- Select Export of Services – With/Without Payment of Tax
- File refund application in Form GST RFD-01
- Upload required documents (in ZIP/PDF)
- ARN is generated, track refund status online
Tips to Avoid Refund Rejection
- File LUT at the beginning of financial year
- Reconcile GSTR-1, GSTR-3B, books, and ICEGATE
- Ensure all invoices are correctly reported
- Keep proper proof of foreign inward remittance
- Reply to any deficiency memo (RFD-03) within 15 days
Time Limit for Claiming Refund
Refund must be applied within 2 years from:
- Date of payment of IGST (without LUT), or
- Date of receipt of foreign currency (with LUT)
Conclusion
Export of services is zero-rated under GST, but refund process can be tricky without proper documents or reconciliation.
Whether you’re exporting under LUT or paying IGST, make sure your invoices, bank receipts, and returns match properly.
If you’re facing refund delays or rejections, consult with taxgiveindia.com and file replies carefully.