GST Refunds - Acknowledgement Becomes Time-Bound

GST refund processing is moving towards a more time-bound and system-driven framework. The proper officer has 10 days to issue an acknowledgement or communicate deficiencies, failing which the application is deemed acknowledged and an electronic acknowledgement is made available through the common portal. The portal is also required to generate FORM GST RFD-04 within three working days of the relevant acknowledgement, based on system-led risk identification and evaluation, without requiring revalidation by the proper officer.

The notification separately provides for system-generated refund orders in specified circumstances, including eligible refunds relating to excess balance in the electronic cash ledger. It also changes the refund formula for inverted duty structure claims, removes the 1.5-times domestic like-goods turnover restriction from the zero-rated goods refund formula from 1 November 2026, revises the ITC debit sequence and substitutes FORM GST RFD-01 from 1 December 2026.

These are material procedural and computational changes. However, a deemed acknowledgement is not a final sanction, a provisional refund order is not the same as final determination, and system-based processing does not eliminate applicable eligibility conditions, verification or permitted adjustments.