The Institute of Chartered Accountants of India (ICAI), in partnership with the Government as a “knowledge dissemination” collaborator, has released the revised 2026 edition of the Handbook on Refunds under GST. The publication comprehensively incorporates all major legislative amendments, procedural reforms, and clarifications issued up to 31st December 2025, aimed at ensuring faster, transparent, and technology-driven refund administration under the Goods and Services Tax (GST) regime.
Key Highlights of the Revised Handbook
Strengthening of Export-related Refund Mechanisms
Exports continue to constitute the largest category of GST refunds. The updated handbook explains the improved systems for processing refunds for:
- Zero-rated supplies (exports and supplies to SEZ units/developers)
- Inverted duty structure cases with revised formulae notified by the Government
- Specific procedures for refund in the case of export of electricity, including mandatory documentation such as Regional Energy Accounts (REA) certifications
Mandatory ITC Matching with GSTR-2B
To further tighten compliance and prevent revenue leakages, refund admissibility is now linked to mandatory matching with FORM GSTR-2B, ensuring only verified Input Tax Credit (ITC) is claimed.
Relief Measures for Unregistered Persons
Significant procedural relief has been introduced enabling:
- Unregistered buyers to claim GST refund in cases of cancellation of construction contracts
- Refund for premature termination of long-term insurance policies: These provisions are backed by Notification No. 26/2022 – Central Tax and Circular No. 188/20/2022-GST, and now fully integrated into the updated handbook.
Comprehensive Integration of Automated Refund System
The Government’s shift toward a technology-based, automated refund processing system is highlighted as a major reform improving transparency and efficiency. The updated text details the steps for virtual processing of applications under CBIC guidelines.
Clarifications on Inverted Duty Structure Refunds
Revisions to Rule 89(5) reflect an updated formula for computing refund in cases where tax on inputs exceeds tax on output supplies. The handbook elaborates the formula and exclusions.
Updated List of Forms & Procedural Requirements
The handbook compiles an exhaustive and updated list of refund-related forms including:
- GST RFD-01 (electronic refund application)
- RFD-03 (deficiency memo)
- RFD-05 (payment order)
- RFD-11 (bond/LUT for exports) and others, all reflecting the latest rule amendments and notifications.
Government Reaffirms Commitment to Ease of Doing Business
The Ministry of Finance emphasised that timely disbursal of GST refunds is critical for maintaining working capital liquidity, especially for exporters and MSMEs. The revised handbook supports this vision by offering clear, practical guidance on refund admissibility, filing procedures, documentation requirements, and legal provisions.
Senior ICAI leadership, including the President and Chairman of the GST & Indirect Taxes Committee, noted in their foreword that the publication reflects the Government’s continuous efforts to simplify refund processes while safeguarding revenue.
The Handbook can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/02/Handbook_on_Refunds_under_GST_January_3rd_2026_Edition_1770731680.pdf
