Faster GST Refunds from 01-10-2025
GST Instruction No 06/2025 dated 03-10-2025 has been issued for Faster GST Refunds from 01-10-2025. 90% refund will sanctioned provisionally on the basis of low risk .The 56th GST Council Meeting recommended a change in Rule 91(2) of CGST Rules,2017.This change allows the GSTN to evaluate the refund application and mark them as low risk or otherwise. For low risk cases, 90% of the claimed refund will be sanctioned provisionally by the officer.
System Based Risk Evaluation
Refund application will be checked by the GSTN System. if the application is marked low risk the officer should release 90% refund provisionally.For non risk cases the officer will scrutinize the application fully before granting refund.
Provisional refund will not be granted if :
- The Taxpayer fall under the notified category (as per Notifcation No 14/2025- CT dated 17-09-2025)
- The taxpayer is under prosecution.
- Any previous refund issue is pending appeal or under show cause notice.
- Refunds needs adjustment or withholding under section 54(10) or (11). In these cases, refund should be processed on final basis directly.
If the officer believes a refund should not be given provisionally, he must record reason in writing and proceed with detailed examination.However, this option should be used rarely and not routinely.
If after the detailed checking the officer find that excess refund was granted provisionally, a show cause notice (RFD-08) will be issued under section 73 or 74 for recovery. The Risk based refund system applies to all refund applications filed on or after 01-10-2025.
Refund for Inverted Duty Structure
The GST Council has also recommended extending the provisional refund 90% to Inverted Duty Structure refund claims.Till the law is amended, the central Government has allowed provisional sanction for IDS refund claims filed on or after 01-10-2025, similar to zero rated supplies.
The GSTN Portal has been updated to handle provisional refund processing for both Zero rated supplies (Exports) and Inverted Duty structure.Jurisdictional Commissioners must ensure proper implementation. Reports are to be sent to chief commissioners for monitoring. States are advised to issue similar instructions for uniform application across india.
Downlaod PDF of GST Instruction No 06/2025
https://taxinformation.cbic.gov.in/content-page/explore-instructions
