In Lok Sabha, the Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, answered Unstarred Question No. 2478 on Monday, 3 August 2026/12 Shravana, 1948 (Saka), on “Delayed GST Refunds to Exporters and MSMEs.” The question was raised by Shri Sribharat Mathukumilli, Member of Parliament.
The Minister informed the House that the pendency of GST refund claims beyond the prescribed timelines has declined substantially in Central Tax formations over the last three financial years.
As on 31 March 2024, 907 refund claims amounting to ₹274.24 crore were pending for more than 60 days but up to 90 days. The number declined to 374 claims amounting to ₹246.10 crore as on 31 March 2025 and further to 64 claims amounting to ₹163.60 crore as on 31 March 2026.
GST refund claims pending for more than 90 days also declined from 1,592 claims involving ₹695.84 crore as on 31 March 2024 to 712 claims involving ₹559.50 crore as on 31 March 2025. The pendency fell further to 110 claims amounting to ₹64.10 crore as on 31 March 2026.
The reported figures indicate that the number of refund claims pending beyond 90 days declined by more than 93 per cent between 31 March 2024 and 31 March 2026. The amount involved in such claims declined by approximately 91 per cent during the same period.
No prolonged refund pendency in Visakhapatnam Commissionerate
The Minister stated that there were no GST refund claims pending for more than 60 days or 90 days in the Visakhapatnam CGST Commissionerate during the last three financial years.
The position covers refund claims administered by the Commissionerate, including those relating to exporters and MSMEs operating within its jurisdiction.
Andhra Pradesh refund pendency
In Andhra Pradesh, six refund claims amounting to ₹27.20 crore were pending for more than 60 days but up to 90 days as on 31 March 2024. This declined to one claim with a negligible reported amount as on 31 March 2025. As on 31 March 2026, one such claim involving ₹1.31 crore was pending.
For claims pending beyond 90 days, Andhra Pradesh reported 70 claims amounting to ₹254.56 crore as on 31 March 2024 and 77 claims amounting to ₹269.86 crore as on 31 March 2025. The pendency declined to 20 claims amounting to ₹32.37 crore as on 31 March 2026.
Interest paid on delayed GST refunds
The Government informed the House that a total of ₹16.60 crore was paid as interest on delayed GST refunds across India during the three financial years from 2023-24 to 2025-26.
Interest payments amounted to ₹0.69 crore in FY 2023-24, ₹1.56 crore in FY 2024-25 and ₹14.35 crore in FY 2025-26.
Of the cumulative amount, ₹2.32 crore related to IGST refunds, ₹6.87 crore to CGST refunds, ₹7.06 crore to SGST refunds and ₹0.34 crore to compensation cess refunds.
Reasons for delay in processing refund claims
The Government stated that delays in processing GST refund claims arise mainly from the delayed submission of documents and replies by taxpayers in response to notices issued by the tax authorities.
In certain cases, taxpayers request that their refund claims be kept pending to allow additional time for furnishing documents and details against show-cause notices. System-related issues have contributed to delays in a limited number of cases.
Automated refunds for export of goods
Refunds arising from the export of goods on payment of IGST are processed electronically through the Customs system without manual intervention. This is facilitated through integration of the GST portal with CBIC’s Indian Customs Electronic Gateway—ICEGATE system.
The automated process is intended to enable faster transmission, verification and processing of export-related refund information.
Provisional refund of 90 per cent within seven days
Under the CGST Act, 2017 and the rules made thereunder, 90 per cent of the refund amount claimed in respect of zero-rated supplies is provisionally sanctioned on the basis of system-driven data analysis and risk evaluation.
The provisional refund is to be granted within seven days from the acknowledgement of the refund application.
The Finance Act, 2026 has also amended the CGST Act to provide for a provisional refund of 90 per cent of the claimed amount in cases involving accumulation of input tax credit due to an inverted duty structure. This brings such claims in line with the provisional-refund framework applicable to zero-rated supplies.
Online tracking and communication of rejection grounds
Registered taxpayers can track the status of their refund applications at every stage through the common GST portal.
Where a refund claim is rejected, the grounds for rejection are required to be communicated to the taxpayer through a reasoned or speaking order under the provisions of the CGST Act, 2017.
The Government further informed the House that the GST Council has not made any recommendation for the introduction of automatic interest payments or for a public dashboard displaying information relating to individual refund claims.
The continued decline in older refund pendency, expansion of risk-based provisional refunds, electronic processing of export refunds and online tracking facilities reflect the Government’s ongoing efforts to improve liquidity, transparency and ease of compliance for exporters, MSMEs and other registered taxpayers.
The answer can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/08/LS-Delayed-GST-Refunds-to-Exporters-and-MSMEs-03.08.2026.pdf
