A S BANKA ADVISORS

If your company exports goods or services and claims back the GST credit it cannot use, or if it pays more GST on its inputs than it charges on its sales, a GST refund is part of your working capital. The way that refund is acknowledged, provisionally paid and computed changes on 1 November 2026.

Two CBIC notifications, both dated 26 October 2026, do this. Notification No. 03/2026-Central Tax appoints 1 November 2026 as the date on which sections 153 to 155 of the Finance Act 2026 come into force; section 155 amends section 54 of the CGST Act, which governs refunds. Notification No. 05/2026-Central Tax, the Central Goods and Services Tax (Amendment) Rules, 2026, made on the recommendations of the GST Council, amends rules 89 to 92 of the CGST Rules, 2017. Most changes apply from 1 November 2026; some apply from 1 December 2026 and 1 April 2027.

The clock on your application gets shorter

For a refund application other than a claim from the electronic cash ledger, the proper officer now has ten days from filing, not fifteen, to issue the acknowledgement in FORM GST RFD-02 or point out deficiencies in FORM GST RFD-03 (rule 90(2) and (3)). The new rule 90(3A) deals with silence: if neither issues within ten days, the application is deemed acknowledged, and the sixty-day period for the refund order under section 54(7) is counted from the date of filing.

For a finance team, the date that matters is now the filing date. Diarise ten days from it, and the sixty days that follow.

The provisional refund order comes from the portal

Until now, rule 91(2) required the proper officer to pass the provisional refund order in FORM GST RFD-04 within seven days of acknowledgement, and a proviso let the officer decline a provisional refund for reasons recorded in writing. The substituted rule 91(2) says the common portal, on the basis of risk evaluation by the system, shall generate the RFD-04 order within three working days of acknowledgement, and that the order need not be revalidated by the proper officer. The substituted sub-rule does not carry the earlier proviso. The payment order in FORM GST RFD-05 may be made available through the common portal (rule 91(3)).

One condition stays as it was: provisional refund is not granted to a person prosecuted, in the five years before the tax period of the claim, for an offence where the tax evaded exceeds two hundred and fifty lakh rupees (rule 91(1)).

What changes for exporters

If you export goods under a Letter of Undertaking and your export prices are well above your domestic prices, the omission of the 1.5 times limit is the change to recompute first, for claims covered by the amended clause.

What changes for inverted duty structure claims

Section 54(6) allowed a provisional refund of ninety per cent of the amount claimed only for claims on account of zero-rated supplies. Section 155(a) of the Finance Act 2026 extends it to refunds of unutilised input tax credit under clause (ii) of the first proviso to section 54(3), which is the inverted duty structure refund.

The formula in rule 89(5) is also substituted. “Net ITC” now means input tax credit availed on inputs and on eligible input services during the relevant period, plus input tax credit on capital goods attributable to that period. “Eligible input services” means input services on which credit has been availed on or after 1 November 2026, so credit on input services taken before that date stays outside the formula. The capital goods element depends on the new rule 89(4)(G), which applies from 1 April 2027 and covers capital goods on which credit is availed on or after that date, spread over sixty months.

Changes that arrive later

• 1 December 2026: rule 89(2) asks for invoice “details” in place of number and date in the supporting statements, adds new statements, and adds a declaration that the applicant has not been prosecuted for an offence where the tax evaded exceeds two hundred and fifty lakh rupees in the five years before the tax period of the claim, where the refund is of unutilised input tax credit under section 54(3) or of tax on zero-rated supplies made with payment of tax.
• 1 April 2027: capital goods enter the refund formulae, with a declaration on capital goods under the new rule 89(2)(p).

One more change applies from 1 November 2026: when the refund is of input tax credit, the electronic credit ledger is debited in a set order, integrated tax first, then central tax and State or Union territory tax equally (rule 89(3)).

Your checklist

1. Diarise ten days from filing for every refund application filed from 1 November 2026, and the sixty-day period that follows.
2. Recompute inverted duty claims for periods from November 2026 under the substituted rule 89(5).
3. Tag input tax credit on input services availed on or after 1 November 2026 in your books, since only that credit counts as eligible input services.
4. If you export goods under bond or LUT, recompute zero-rated turnover without the 1.5 times limit.
5. Prepare the invoice details and the declaration needed for refund applications from 1 December 2026.
6. Start capital goods records for credit availed from 1 April 2027 if your refund claims will include it.

The carousel puts the old and new positions, the exporter and inverted duty changes and the key dates on one page each: Download the full carousel PDF.

Source: Central Board of Indirect Taxes and Customs, Notification No. 05/2026-Central Tax, 26 October 2026 (Central Goods and Services Tax (Amendment) Rules, 2026), taxinformation.cbic.gov.in. Source: Central Board of Indirect Taxes and Customs, Notification No. 03/2026-Central Tax, 26 October 2026, taxinformation.cbic.gov.in. Source: The Finance Act, 2026 (4 of 2026), section 155, Gazette of India Extraordinary, egazette.gov.in. Source: Central Goods and Services Tax Act, 2017, section 54, and Central Goods and Services Tax Rules, 2017, rules 89 to 92, taxinformation.cbic.gov.in.

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