GST Portal Update: Taxpayers Can Now Claim Order-Based Refunds Despite Zero or Positive Balance
The inability to claim refunds in cases of mixed balances caused significant hardship for small and medium enterprises and often led to prolonged litigation.
The Goods and Services Tax Network ( GSTN ) issued a fresh advisory on August 28, 2025, announcing a key system enhancement within the GST portal for processing order-based refunds.
Under the earlier system, taxpayers could claim refunds under the category “On account of Assessment/Enforcement/Appeal/Revision/Any Other Order” (ASSORD) only if the cumulative amount of the Demand ID showed a negative balance and the status of the Demand ID was “Refund Due.”
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In such an event, even when individual components or minor heads of a demand carried negative balances, taxpayers could not claim refunds if the overall cumulative balance was zero or positive. Such restrictions led to significant sums being locked within the system, causing major cash flow difficulties for businesses.
Following repeated representations from taxpayers and tax officers, GSTN has now updated the system process in the refund module. As per the advisory, refunds can now be claimed irrespective of the Demand ID status. Refunds will also be allowed in situations where the cumulative balance of a demand is zero or positive, provided at least one minor head shows a negative balance.
To ensure accuracy, only the negative balances will be auto-populated in the refund application (Form RFD-01) henceforth, and taxpayers will not be able to claim any refunds against positive entries within the demand.
GSTN has also introduced additional features to simplify the filing process - the portal will now automatically suggest the most recent demand order associated with a negative balance, which could be an order-in-original, rectification order or appellate order. Tooltips have also been introduced near the Order No. and Demand ID fields to guide taxpayers in entering the correct details.
Experts have reportedly welcomed the move, calling it a long-awaited correction of a technical bottleneck that had blocked working capital for many businesses.
Tax professionals noted that the inability to claim refunds in cases of mixed balances caused significant hardship for small and medium enterprises and often led to prolonged litigation, even after taxpayers had received positive orders.
GSTN has also announced that a comprehensive user manual and FAQs will be issued shortly to assist taxpayers in navigating the enhanced system. In case of any discrepancies or portal-related issues, taxpayers have been advised to raise a ticket with the GST helpdesk.
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With this update, businesses that were previously unable to claim legitimate refunds because of a system constraint can now proceed with their applications.
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