Refund of IGST Paid on Exports

An exporter who pays IGST on a shipment files no refund application for it. The shipping bill is the application. The money arrives only if the customs system, the GST portal and the ship’s manifest all agree on the same invoice, the same shipping bill and the same GSTIN. When they do not, the refund stops with a code such as SB005, and nothing more happens until the exporter finds the error and cures it. A second set of claims was stopped for years by rule 96(10). That rule barred the IGST route to exporters who had bought inputs under certain concessions. It was omitted in October 2024, and in August 2026 the Supreme Court held that the omission reaches every pending proceeding.

This guide covers the refund of IGST paid on exported goods under rule 96: when the shipping bill becomes a valid application, how the data travels from GSTR-1 to ICEGATE, the error codes and how each is cured, withholding under rule 96(4), and the end of rule 96(10). It also covers exports of services with IGST, which are claimed in FORM GST RFD-01. The other route, export under a letter of undertaking with a refund of credit, is in Refund of Credit on Exports and SEZ Supplies under LUT. The general RFD-01 procedure is in Refund of Unutilised Credit: Who Can Claim and How.

Who may export on payment of IGST

Section 16(4) of the IGST Act allows the IGST-paid route only for notified persons or supplies. Notification No. 01/2023-Integrated Tax, as substituted with effect from 1 October 2023 by Notification No. 05/2023-Integrated Tax, notifies “all goods or services” for export on payment of IGST, except pan masala and the tobacco and mint products listed in its table. It also notifies all suppliers to SEZ units and developers for authorised operations, with the same exceptions.

Three bars in section 54 of the CGST Act still apply:

• Export duty. From 1 November 2024, section 54(15) allows no refund of “integrated tax paid on account of zero rated supply of goods” that are subject to export duty.
• Drawback. The last proviso to section 54(3) bars a refund of credit where the supplier “claims refund of the integrated tax paid on such supplies”. A supplier therefore takes either the IGST refund or the credit refund on the same supply, not both. Customs guidance adds that a shipping bill on which the higher rate of drawback has been claimed is not eligible for the IGST refund.
• The minimum amount. Section 54(14) bars a refund below one thousand rupees. Section 155 of the Finance Act, 2026 inserts an exception for “goods exported out of India with payment of tax”, but CBIC’s text records it as not yet in force. Until it is notified, Customs guidance treats an IGST claim below Rs 1,000 as not payable.

The shipping bill as the application

Rule 96(1) reads: “The shipping bill filed by an exporter of goods shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India”. It is deemed filed only when three conditions are met:

• (a) the person in charge of the conveyance has filed “a departure manifest or an export manifest or an export report” covering the shipping bill
• (b) the applicant “has furnished a valid return in FORM GSTR-3B”
• © the applicant has undergone Aadhaar authentication under rule 10B, from 1 January 2022

Under the proviso to clause (b), where the shipping bill and GSTR-1 (as amended in GSTR-1A) do not match, the application “shall be deemed to have been filed on such date when such mismatch in respect of the said shipping bill is rectified by the exporter”. A mismatch therefore moves the date of filing. It also moves the start of the sixty days after which interest runs under section 56 (see When a Refund Is Delayed).

Under rule 96(2) and (3), the portal sends the export invoices in GSTR-1 to the Customs system. Once a valid GSTR-3B is confirmed, the Customs system processes the claim, and the IGST paid on each shipping bill is credited to the bank account “mentioned in his registration particulars and as intimated to the Customs authorities”. The portal’s FAQs add that the refund goes to the bank account registered with ICEGATE, and that queries about a disbursed amount go to the ICEGATE jurisdictional officers.

What the portal checks before it sends the data

The portal’s FAQs list five validations. If any one fails, the invoice data is not sent to ICEGATE:

1. GSTR-1 and GSTR-3B for the period have been filed.
2. The export invoices are in table 6A of GSTR-1.
3. Each invoice carries a correct shipping bill number, shipping bill date and six-character port code.
4. The IGST and cess are reported in table 3.1(b) of GSTR-3B, not in 3.1(a) or 3.1©.
5. The IGST and cess in table 3.1(b) are equal to or more than the total in tables 6A and 6B of GSTR-1.

The portal keeps an “export ledger” for the fifth check. It posts table 3.1(b) amounts as credits and table 6A, 6B and 9A amounts as debits, across all periods. In the portal’s words, “In case of negative balance, GST Portal will not transmit any eligible invoice to ICEGATE.” The ledger and the invoices that failed validation can be seen under Services > Refunds > Track status of invoice data to be shared with ICEGATE.

Errors are cured in later returns. An invoice left out of table 6A can be reported in a later GSTR-1. A wrong invoice is amended in table 9A of a later GSTR-1, but “once an invoice is used in a certain statement, then those invoices can not be amended further”. Tax shown in the wrong row of GSTR-3B is adjusted in a later GSTR-3B, in the manner Circular No. 26/26/2017-GST describes. The detail is in Correcting Mistakes in Returns.

The ICEGATE response codes, and how each is cured

At ICEGATE, the Customs system matches the GSTIN, the shipping bill number and the invoice number in the GST data against its own records. A note on IGST refund error codes published by the Chennai Customs Commissionerate (August 2025) describes each response:

Code	Meaning	Cure described by Customs
SB000	Invoice successfully validated	None. The shipping bill is ready for the refund scroll. It may still drop out: where the export was under LUT, where some invoices on a multi-invoice shipping bill have other errors, where the higher drawback rate was claimed, or where the claim is below Rs 1,000. An alert on the IEC, or a bank account not validated by PFMS, can hold it in the temporary scroll
SB001	Invalid shipping bill details	Usually a wrong shipping bill number in GSTR-1. Amended through table 9A of GSTR-1
SB002	EGM not filed	The shipping line files the export general manifest
SB003	GSTIN mismatch	The GSTIN in GSTR-1 is amended through table 9A. The shipping bill cannot be amended once the EGM is filed
SB004	Invoice already received and validated	A duplicate transmission. The earlier record has already been validated
SB005	Invalid invoice number	The invoice number in the shipping bill differs from GSTR-1. If GSTR-1 is wrong, it is amended through table 9A. If the shipping bill is wrong, it cannot be amended after the EGM. The exporter then applies to the Assistant Commissioner (IGST Refunds) with the invoice and packing list, a shipping-bill-wise concordance table and a challan of Rs 1,000 per shipping bill
SB006	Gateway EGM not available	For ICD cargo. The train or truck summary is filed and the shipping line includes the ICD shipping bill in the gateway EGM

The same note records that the invoice number in the shipping bill “must match the GST-compliant invoice issued for exports”. Most SB005 errors come from using one invoice series for customs and another for GST. The earlier one-time officer-interface procedure for SB005, run under Customs circulars in 2018, applied only to past shipments.

Withholding under rule 96(4)

Rule 96(4) requires the claim to be withheld in three cases:

• (a) the jurisdictional Commissioner of central or State tax asks for it to be withheld “in accordance with the provisions of sub-section (10) or sub-section (11) of section 54”
• (b) the proper officer of Customs “determines that the goods were exported in violation of the provisions of the Customs Act, 1962”
• © the Commissioner in the Board, or an officer authorised by the Board, “on the basis of data analysis and risk parameters”, considers that “verification of credentials of the exporter, including the availment of ITC by the exporter, is considered essential before grant of refund”

Clause © and sub-rules (5A) to (5C) were inserted by Notification No. 14/2022-Central Tax with effect from 1 July 2017. Under sub-rule (5A), a claim withheld under clause (a) or © is transmitted to the GST officer “in a system generated FORM GST RFD-01”. The exporter is told of the transmission through the portal. That form “shall be deemed to be the application for refund” and to have been filed “on the date of such transmission”. Under sub-rule (5B), the same happens under clause (b) once Customs passes an order that the export violated the Customs Act. From then on the claim is dealt with under rule 89, like any other RFD-01: acknowledgement, scrutiny, a notice in RFD-08 before any rejection, and an appealable order in RFD-06.

The verification procedure. Circular No. 131/1/2020-GST sets out a procedure for exporters whose refund scrolls are held for risk-based verification:

• The exporter submits the details in Annexure A of the circular (directors and linked entities, turnover, liabilities, suppliers and credit) to the jurisdictional CGST office, when told of the hold or on its own initiative.
• The office is to complete verification “within 14 working days”.
• After that, the exporter may escalate to the jurisdictional Principal Chief Commissioner or Chief Commissioner by email. That office is to complete verification within a further seven working days.
• A refund pending for more than a month may be raised as a grievance on the CBIC website, for a committee headed by the Member (GST).

The end of rule 96(10)

What it barred. Rule 96(10) denied the IGST-paid route to an exporter who had received supplies at concessional rates under specified GST notifications, or had imported inputs duty-free under specified customs notifications for advance authorisation and EOU holders. An exception covered capital goods under EPCG. Those exporters could export only under LUT. The Supreme Court described the effect of the omission as allowing refunds under rule 96 “without the rigor of the person claiming such refund, having received supplies after availing benefits” under those notifications. Recovery proceedings were raised against many exporters who had taken IGST refunds while holding such inputs.

The omission. Rule 10 of the Central Goods and Services Tax (Second Amendment) Rules, 2024 (Notification No. 20/2024-Central Tax, 8 October 2024) reads: “In the said rules, in rule 96, sub-rule (10) shall be omitted.” The rules came into force on publication, and nothing in them saves pending proceedings. The same notification omitted rules 89(4A) and 89(4B).

The Gujarat High Court. In Addwrap Packaging Pvt Ltd v Union of India (Gujarat High Court, Division Bench, Special Civil Application No. 22519 of 2019 and connected matters, 13 June 2025; read on Indian Kanoon), exporters faced show cause notices and orders for recovery of IGST refunds on the ground of rule 96(10). The court held that the omission “would be applicable to all the pending proceedings/cases as on 8th October, 2024”. It quashed the notices and orders, and held the petitioners entitled to maintain their IGST refund claims under rule 96.

The Supreme Court. M/s Goodluck India Limited v Union of India (Supreme Court, J.B. Pardiwala and K. Vinod Chandran JJ, SLP © No. 24550 of 2025 and connected appeals, 6 August 2026, 2026 INSC 821; read on Indian Kanoon) decided the Union’s appeals against a High Court judgment that had applied the omission to every pending proceeding. The Additional Solicitor General relied on the 54th GST Council minutes, which recorded the Law Committee’s recommendation that rule 96(10) be omitted “with prospective effect”. The Court applied the Constitution Bench decision in Kolhapur Canesugar Works (2000): proceedings under an omitted rule continue only where a saving provision or a legal fiction keeps them alive. It held that the Council’s recommendation “is also advisory in nature and does not bind the rule making authority”. It held that “the intention to omit the rule without any saving clause was to bring to an end, the unnecessary complications once and for all and the intention cannot be to keep alive the unnecessary complications insofar as the pending proceedings are concerned”. The Union’s appeals were dismissed. Two assessees’ petitions challenging the vires of the rule were dismissed as infructuous. The Court directed its order to be sent to every High Court so that pending cases “would get closure”.

After the Supreme Court. In Agrawal Metal Works Pvt Ltd v Principal Commissioner of Customs, ICD Patparganj (Delhi High Court, W.P.© 18087/2025, 7 September 2026), Customs had issued a show cause notice under section 28(4) of the Customs Act on 14 October 2025. The notice proposed to recover Rs 4,77,87,866 of IGST refund on the ground of rule 96(10). The court held that “if the omission brought an existing proceeding to an end, it could hardly permit a fresh proceeding under the same Rule to begin thereafter”, and quashed the notice. The Calcutta High Court, quashing a section 74 notice and order founded on the omitted rule on 15 September 2026, recorded that CBIC had issued an Office Memorandum dated 24 August 2026 instructing field formations not to initiate or pursue proceedings based on rule 96(10). At its meeting on 8 October 2026, the GST Council recommended a circular clarifying the “omission of rule 96 (10) of the CGST Rules, 2017 to be effective from 23.10.2017, in accordance with the Hon’ble Supreme Court decision”. That circular is recommended, not yet issued.

What this means for earlier periods. For shipments before 8 October 2024, rule 96(10) can no longer found:

• a pending refund claim or its rejection
• a pending show cause notice, order or appeal for recovery of a refund already paid
• a fresh notice issued after the omission

The Supreme Court’s order speaks of proceedings pending on the date of omission. It does not say whether recoveries completed before then, where no proceeding remained open, can be reopened. The awaited circular may address that.

Upward revision of price after export

A proviso to rule 96(1) and rule 89(1B), inserted by Notification No. 12/2024-Central Tax from 10 July 2024, deal with additional IGST paid because the export price was revised upward after the IGST refund was sanctioned. The additional IGST is claimed in RFD-01 within two years of the relevant date for the original export. Rule 89(2)(bb) and (bc) list the evidence:

• supplementary invoices or debit notes
• the BRC or FIRC for the additional remittance
• a chartered accountant’s or cost accountant’s certificate linking that remittance to the revision
• a reconciliation statement

Exports of services with IGST

The shipping bill mechanism covers goods only. Rule 96(9) requires the refund of IGST paid on services exported to be filed in FORM GST RFD-01 and “dealt with in accordance with the provisions of rule 89”. The rule 89 procedure (acknowledgement in RFD-02, provisional refund under rule 91, the final order in RFD-06) therefore applies.

• The ground. “Export of services with payment of tax”.
• The statement. Statement 2 under rule 89(2)©, listing each invoice and its BRC or FIRC. The portal validates it against GSTR-1. The portal’s FAQs allow up to ten supporting documents of up to 5 MB each.
• Declarations. Circular No. 125/44/2019-GST, Annexure A, requires the declaration under section 54(3), the undertaking relating to section 16(2)©, and the self-declaration of non-prosecution under rule 91(1) for provisional refund. No unjust-enrichment declaration is needed, because section 54(8)(a) covers refunds on exports.
• Time limit. Two years from the relevant date. Under Explanation 2© to section 54, this is the date of receipt of payment in convertible foreign exchange (or rupees where the RBI permits), or the invoice date where payment came in advance.
• A tax shown in the wrong row. Circular No. 147/03/2021-GST allowed claims for periods up to 31 March 2021 where IGST on exported services was shown in table 3.1(a) instead of 3.1(b). The claim was capped at the IGST in tables 3.1(a), (b) and © together.

What to have ready

Item	Where it comes from
Export invoices in table 6A of GSTR-1 (or amended in 9A), with shipping bill number, date and port code	Books and GSTR-1
GSTR-3B with IGST on exports in table 3.1(b)	Return
The export ledger balance and the failed-invoice list	Portal, Track status of invoice data to be shared with ICEGATE
Shipping bills, EGM status and response codes	ICEGATE
Bank account registered with Customs and validated by PFMS	ICEGATE
Aadhaar authentication of the persons named in rule 10B	Portal, registration
Drawback claimed on each shipping bill, and its rate	Shipping bill
For services: invoices, BRC or FIRC, Statement 2	Books and bank

Signing, consequences, and what can still be put right

Signing. No separate application is signed for goods: the shipping bill and the returns are the claim. GSTR-1 and GSTR-3B are signed with DSC or EVC by the authorised signatory. An RFD-01 for services, or for additional IGST on a price revision, is filed in the same way.

Consequences. A refund of IGST later found not due is recovered with interest. Under rule 96B, where export proceeds are not realised within the FEMA period, the refund is repaid with interest within thirty days after that period ends. An export later found to violate the Customs Act sends the claim to the GST officer under rule 96(5B).

What can be put right.

• Errors in GSTR-1 are amended in table 9A, and a shortfall in table 3.1(b) is made good in a later GSTR-3B. The application is then deemed filed on rectification.
• A wrong invoice number in the shipping bill is taken to the Customs IGST refund section under the SB005 procedure.
• A claim withheld and transmitted as RFD-01 is pursued before the GST officer, with the RFD-08 and RFD-09 safeguards and an appeal under section 107.
• A notice or order that rests on rule 96(10) is met with the omission and the Supreme Court’s order in Goodluck India.
• Delay attracts interest under section 56. The Supreme Court in Union of India v Willowood Chemicals (2022) fixed it at 6 per cent for delayed IGST export refunds. The detail is in the last guide in this set.

The procedure in order

1. Confirm the goods may be exported on payment of IGST, carry no export duty, and are not on a higher drawback rate.
2. Issue one GST-compliant export invoice and use the same number in the shipping bill.
3. Report each export in table 6A of GSTR-1 with shipping bill number, date and port code, and the IGST in table 3.1(b) of GSTR-3B.
4. Check that the EGM is filed and that the export ledger is not negative. Complete Aadhaar authentication.
5. Track the invoice status on the portal and the response code on ICEGATE, and cure any SB001 to SB006 error in the manner shown.
6. If the scroll is held for verification, file the Circular 131 details with the jurisdictional office. If the claim is transmitted as RFD-01, answer it under rules 89 to 92.
7. For services, file RFD-01 under “Export of services with payment of tax” with Statement 2, within two years of receiving payment.

The next guide covers the simplest refund in GST, and the one most often left unclaimed: an excess balance in the electronic cash ledger.