Refund of ITC on Account of Supplies made to SEZ Unit/Developer (Without Payment of Tax)
Edition: September 2025
Disclaimer: This manual is for compliance facilitation. It does not substitute statutory provisions, notifications, or circulars. Taxpayers must verify with the CGST/SGST Acts, Rules, and GSTN updates.
✍️ Preface
Supplies made to SEZ Units/SEZ Developers without payment of IGST are treated as zero-rated supplies under the IGST Act. Taxpayers can claim a refund of accumulated ITC on such supplies by filing Form GST RFD-01. This report explains the law basis, portal process, FAQs, and a compliance checklist.
⚖️ 1. Law Basis
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Section 16, IGST Act, 2017 – Zero-rated supplies.
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Section 54, CGST Act, 2017 – Refund of tax.
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Rule 89(4), CGST Rules, 2017 – Refund of ITC on zero-rated supplies without payment of tax.
🛠️ 2. Step-by-Step Process – Filing Refund Application (RFD-01)
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Login → www.gst.gov.in.
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Navigate: Services > Refunds > Application for Refund.
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Select refund type: On account of supplies to SEZ unit/SEZ developer (without payment of tax).
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Select Tax Period → Click CREATE REFUND APPLICATION.
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File NIL refund for previous unclaimed periods (if applicable).
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Download Offline Utility → Fill Statement 5 with invoice/shipping bill/endoresed invoice details.
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Upload JSON file → Validate & Calculate → Correct errors (if any).
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Refund computation auto-populated in Statement 5A.
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System validates refund against balances in Electronic Credit Ledger (ECL).
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Upload supporting documents (up to 15 files, ≤ 5 MB each).
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Provide LUT/Bond reference if submitted (RFD-11).
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Preview → File with DSC/EVC.
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ARN generated → Acknowledgement sent via SMS/Email.
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Debit entry made in ECL for refund claimed.
📌 3. Key Features
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Refunds can be filed for multiple tax periods in one application.
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NIL refund applications also allowed.
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Statement 5 mandatory → validated with GSTR-1 data.
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Eligible refund amount = Lowest of:
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Balance in ECL (end of tax period).
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Balance in ECL (at time of filing).
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Formula: (Turnover of Zero-rated supply × Net ITC ÷ Adjusted Total Turnover).
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Refund applications saved for 15 days before submission.
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ARN receipt generated after filing → Application assigned to Refund Officer.
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Refund disbursed after officer’s scrutiny.
❓ 4. FAQs (with Basis)
Q1. Can I club multiple tax periods in one refund?
Yes, including periods from different financial years.
Q2. Is uploading Statement 5 mandatory?
Yes, it is validated against GSTR-1.
Q3. What declaration is required?
That SEZ Unit/Developer has not availed ITC on the supplies.
Q4. Can I file NIL refund applications?
Yes, NIL periods can be filed separately or combined with refund periods.
Q5. How is refund processed after ARN?
Assigned to Jurisdictional Refund Officer for scrutiny and disbursement.
✅ 5. Compliance Checklist
| Step | Particulars | Status (✔) |
|---|---|---|
| 1 | Login → Refund Application → Select SEZ Refund Type | ⬜ |
| 2 | Select Tax Period → Create Refund Application | ⬜ |
| 3 | Download & fill Statement 5 → Upload JSON | ⬜ |
| 4 | Validate statement → Correct errors if any | ⬜ |
| 5 | Upload supporting documents + LUT reference | ⬜ |
| 6 | Preview → File with DSC/EVC | ⬜ |
| 7 | ARN generated → SMS/Email acknowledgement | ⬜ |
| 8 | Debit entry in ECL noted | ⬜ |
| 9 | Track refund status → Download ARN | ⬜ |
