How to Claim Refund of GST

Until 48th GST Council Meeting, an unregistered dealer (buyer of flat) could claim refund of GST paid upon cancellation of such flat only from builder that too within the time limit where the builder could issue a credit note to such buyer.

This resulted in unnecessary hardships and cost burden on such unregistered dealers. To remove such difficulties faced by the unregistered buyers in the event of cancellation of flat, Central Board of Indirect Taxes and Customs in this 48th GST Council Meeting, issued Notification No 26/2022 CT dated 26th Dec 2022 and Circular No 188/20/2022 GST dated 27th Dec 2022, which provided for a new functionality for unregistered buyers to claim such GST paid on cancelled flats within the prescribed time limit.

Thus now an unregistered buyer who decides to cancel the agreement to purchase a flat can claim GST refund paid by him from the builder or the government depending upon the timeline of the cancellation of such agreement.

  1. Claiming GST Refund from the builder:

        When the unregistered buyer enters into an agreement to buy a flat in any financial year by making the payment along with GST and such agreement gets cancelled in the subsequent financial year but before 13th November, in such cases, builder shall issue a credit note and refund the GST amount to the unregistered buyer. After issuing such credit note, the builder shall accordingly make declarations and adjustments in his GST returns.


  1. Claiming the GST Refund from the government:

When the unregistered buyer enters into an agreement to buy a flat in any financial year by making the payment along with GST and such agreement gets cancelled in the subsequent financial year but after 13th November (which is the time limit for adjustment of GST by issuing a credit note), in such cases, an unregistered dealer shall have an option to claim refund of the GST amount from the government. However, such refund can be claimed only within two years from the relevant date (date of letter of cancellation received by the unregistered dealer).

Procedure to claim refund from government:

  • An unregistered dealer shall obtain a temporary registration through portal using his/her PAN.
  • While registering oneself, the state or the Union Territory that is selected shall be the one where the builder is registered in respect of whose invoice the refund is to be claimed.
  • Provide the bank account details which is in the name of the unregistered dealer and is obtained on their PAN and in this bank account, the refund shall be issued.
  • Complete Aadhar authentication as provided in Rule 10B of the CGST Rules.

Application Process and the required documents

Once the temporary registration is obtained, the applicant should file Form RFD 01 on the portal available under the category of ‘Refund for Unregistered Persons’ along with the Statement 8 duly filled with all the details and documents as mentioned below:

  • A statement providing for the details of the invoice against which the refund is being claimed. Such details shall be invoice number, date, taxable value, value of tax paid and the payment details.
  • Copy of such invoice along with the proof of payment made to the builder and the copy of agreement entered with the builder to purchase the flat.
  • Letter of Cancellation of Flat issued by the builder
  • Statement providing for details of payment received from the builder upon cancellation of flat purchase.
  • A certificate issued by the builder stating that he has paid the tax to the government with respect to such invoice against which the unregistered dealer is claiming the refund and that he has not made any adjustments in his returns and tax liability by issuing credit note against this invoice and will not claim any refund of tax against this invoice in future.

                 Other Key Points

  • Application cannot be made after two years from the relevant date.
  • Separate applications for refund shall be made in respect of invoices that are issued by different builders.
  • The application of refund cannot be made where the amount of refund is less than Rs 1000/-
  • The amount of refund claimed cannot exceed the amount of tax paid and mentioned on the invoice/s.
  • Where a proportionate amount of tax is received from the builder, then the amount of claim of refund shall not exceed the balance proportionate amount.
  • Refund Application can be made only if the time limit for issuance of credit note u/s 34 of GST Act has expired.
  • Once such application made is scrutinized and approved, the concerned officer shall pass the sanction order in Form RFD-06 along with the detailed speaking order.

Jitesh Telisara & Associates LLP, CA In Pune is a professionally managed firm catering to domestic and international clients with a broad range of services in domestic and international taxation, regulatory and advisory services and crosses border transaction-related services.

The team at the firm has dedicated and experienced professionals and associates like Chartered Accountants, Company Secretary and Consultants to provide end to end services to your business. With the effort of gaining a deep understanding of your business, the team is committed to providing valuable, consistent and efficient services based on its in-depth knowledge and wide experience in the areas of audit, taxation, regulatory compliances, and related business services.

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