Relief to Exporters: 56th GST Council Approves Risk-Based Provisional Refund Mechanism for Zero Rated Supply, 90% will be Released

The 56th GST Council has authorized the implementation of a risk-based interim refund scheme for zero-rated goods to the exporters. Exporting products and services or supplying Special Economic Zone (SEZ) units and developers for approved activities are examples of zero-rated supplies.

As per the recommendation of the council, 90% of the refund claimed will now be released provisionally by the proper officer based on a system-driven risk evaluation. This means exporters will no longer face long delays in getting refunds.

It was also added that, in exceptional cases, officers may withhold provisional refunds and carry out a detailed verification, but only after recording valid reasons in writing.

The Council has also recommended issuing a notification to exclude certain categories of taxpayers from availing provisional refunds, where risks are higher. This will come into effect from 1st November 2025.

‘The Council recommended amendment in rule 91(2) of CGST Rules, 2017 to provide for sanction of 90% of refund claimed as provisional refund by the proper officer on the basis of identification and evaluation of risk by the system. However, in exceptional cases, the proper officer may for reasons to be recorded in writing, instead of granting refund on provisional basis proceed with the detailed scrutiny of the refund claim.

The Council recommended issuance of a notification to notify certain category of registered persons who may not be granted refund on provisional basis. This provision shall be operationalised from 1st November, 2025’ stated the Press release issued by the Ministry of Finance.

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