GST refund rules amended: faster acknowledgement and new inverted duty formula
What changed. The CGST (Amendment) Rules, 2026 amend rules 89 to 92:
- Acknowledgement. The officer must acknowledge a refund application (FORM GST RFD-02) or point out deficiencies (RFD-03) within ten days, instead of fifteen. If neither is done, the application is deemed acknowledged and the refund time limit under section 54(7) runs from the filing date.
- Provisional refund. The portal will generate the provisional refund order in FORM GST RFD-04 within three working days of acknowledgement, on the basis of system risk evaluation.
- Debit of credit ledger. The refund amount is debited first from integrated tax, then equally from central and State tax, with any shortfall in one met from the other.
- Export of goods. The cap on turnover of zero-rated goods at 1.5 times the value of like goods supplied domestically is removed.
- Inverted duty structure. "Net ITC" will include eligible input services (ITC availed on or after 1 November 2026) and, from 1 April 2027, ITC on capital goods attributable to the relevant period, spread over sixty months.
- New statements and declarations are added to the application, including one that the applicant has not been prosecuted for evasion above ₹250 lakh in the preceding five years, and a revised FORM GST RFD-01.
Who it affects. Exporters, suppliers to SEZs, merchant-export suppliers and businesses with an inverted duty structure.
From when. 1 November 2026, except: changes to rule 89(2) and the new FORM GST RFD-01 from 1 December 2026; capital-goods provisions from 1 April 2027.
What to do. Review pending and planned refund claims against the new formula and documents, and track the ten-day acknowledgement period.
Official source: CBIC Notification No. 05/2026–Central Tax dated 26 October 2026 (CGST (Amendment) Rules, 2026)
This is general information based on the law as on the date shown, not professional advice. Rules change often; check the current position before acting.