In a bid to make the GST refund system more automated, the government is introducing an Annexure-B offline utility in place of the earlier PDF-based Annexure-B in Form GST RFD-01, making the refund filing process more streamlined, structured and system-driven.
With this enhancement, businesses claiming GST refunds on unutilised Input Tax Credit (ITC), particularly exporters and taxpayers operating under an inverted duty structure, are expected to benefit from improved data accuracy, faster processing and greater transparency in refund applications. The revised utility is also likely to enable stronger system-based validation and reduce manual intervention, thereby improving efficiency and ensuring smoother processing of refund claims.
Sources told CNBC-TV18 that the government has received feedback from the trade indicating that the new facility could lead to automated, faster and non-discretionary sanctioning of GST refunds.
Under the revised procedure, taxpayers filing refund applications for accumulated ITC will now have to prepare Annexure-B using an offline utility and upload it in JSON format along with FORM GST RFD-01.
In simple terms, a JSON file is a structured digital format that allows the GST system to automatically read and verify invoice-level data instead of relying primarily on manual checks by tax officers.
The updated utility now requires taxpayers to furnish significantly more detailed information for every invoice included in the refund claim.
This includes the nature of inward supply, type of document, total ITC claimed, whether any portion falls under blocked credit rules under Section 17(5), eligible and ineligible ITC amounts, and the relevant GSTR-2B period in which the invoice appears.
Tax experts say the move signals a major shift in how GST refunds may be processed going forward.
Until now, refund applications were largely reviewed manually after filing. If tax officers identified mismatches between refund claims and GSTR-2B records, businesses would receive notices, queries or requests for clarification — often delaying refunds for weeks or even months.
Under the revised system, the GST portal itself may begin validating invoices and ITC details at the filing stage through automated checks.
This means taxpayers may now need to ensure that every invoice uploaded as part of a refund claim accurately matches GSTR-2B records and ITC eligibility before submission.
For businesses, particularly exporters that depend heavily on timely GST refunds for working capital, the changes increase the importance of accurate reconciliations and clean vendor data.
Companies may now need to undertake more detailed matching of purchase registers, GSTR-2B records, electronic credit ledger balances and refund workings before filing claims.
Even minor errors — such as claiming blocked credit, reporting an incorrect GSTR-2B period or mismatches in invoice details — could trigger system flags, additional scrutiny or delays in refund processing.
The impact is expected to be more significant for businesses with large procurement volumes and multiple vendors, where reconciliation gaps are more common.
An tax expert said the update marks a clear shift towards technology-led compliance checks in GST refunds.
“This update quietly but decisively moves refund claims into a more data-driven space. Until now, refund filings followed a procedural approach in how invoice details were presented. While Annexure-B was always part of the process, scrutiny was largely manual, and any mismatches with GSTR-2B or ITC eligibility typically surfaced later during departmental review,” he said.
“It is this post-filing verification that stretched timelines and led to the familiar cycle of queries and clarifications, often slowing down refunds in the process,” he added.
According to him, the latest changes indicate that GST authorities now expect taxpayers to ensure accuracy upfront, rather than during later departmental scrutiny.
“With the latest update, taxpayers will need to be far more deliberate with their inputs, particularly around how ITC is classified, whether any portion falls within blocked credits, and how each invoice ties back to the relevant GSTR-2B,” he said.
“The emphasis is no longer just on reporting figures, but on ensuring that every line item can withstand system-based validation.”
Experts say the broader objective behind the move is to reduce fraudulent refund claims, improve audit trails and speed up the processing of genuine claims through automated verification.
However, for businesses, the compliance burden is clearly increasing.
Many companies may now require stronger internal controls, better accounting reconciliations and closer monitoring of vendor filings to ensure refund claims are not delayed due to technical mismatches or data inconsistencies.
