GST 90 Percent Provisional Refund (Section 54(6) + Rule 91)

Provisional refund of 90 percent is the working-capital-relief mechanism built into the GST refund framework. The principle is that taxpayers entitled to refund should not have to wait for full officer scrutiny to receive the bulk of their entitlement - a recognition that GST refunds are the lifeblood of exporters and inverted duty structure manufacturers, and that any delay translates directly into blocked working capital. Section 54(6) of the CGST Act 2017 codifies this for zero-rated supplies; Rule 91 of CGST Rules 2017 prescribes the 7-day operational timeline.

Until 01 October 2025, the 90 percent provisional facility was available only for zero-rated supply refunds (Section 16 IGST exports and SEZ supplies). The 56th GST Council recommended extending it to inverted duty structure (IDS) refunds. Two Government actions followed - Notification 13/2025-Central Tax dated 17.09.2025 amended Rule 91(2) to introduce a system-driven risk-based mechanism for both categories, and CGST Instruction 6/2025 dated 03.10.2025 directed field formations to grant 90 percent provisional refund for IDS claims filed on or after 01.10.2025. Notification 14/2025-CT identified the ineligible class. Patron Accounting LLP optimises filings for low-risk classification, tracks RFD-04 issuance, and defends against discretionary withholding for 200+ exporter, SEZ supplier, and IDS manufacturer clients.

Content is reviewed quarterly for accuracy.

Not all GST refund categories are eligible for the 90 percent provisional facility. The matrix below shows the position post-01.10.2025 across the eight refund categories Patron Accounting handles.

Important note on Notification 14/2025-CT: Notification 14/2025-Central Tax dated 17.09.2025 identifies the class of registered persons NOT eligible for provisional refund of zero-rated supply or IDS refund - typically applicants flagged for compliance issues, ITC mismatch above thresholds, or with pending recoveries. Patron's pre-filing audit checks the Notification 14/2025-CT carve-out before claiming the 90 percent provisional path.

Keep the following documents ready before filing. Patron Accounting maintains a digital document vault per client with 8-factor risk audit findings tracked over time.

Mandatory pre-conditions for 90 percent provisional:

• Refund category eligible (zero-rated or IDS post 01.10.2025).
• Latest GSTR-3B filed for the period covered by refund.
• Aadhaar authentication completed for all promoters and authorised signatories.
• Bank account validated and linked to GSTIN via PFMS.
• GSTR-1 and GSTR-3B filed on time for last 12 months (compliance track).
• Not in Notification 14/2025-CT ineligible class - no pending recovery, prosecution under Section 132, or notified flag.
• GSTR-2B and GSTR-3B Net ITC reconciliation within tolerance; Rule 36(4) adherence.

RFD-01 filing documents (refund-category-specific):

• Form GST RFD-01 with relevant Statement (1A IDS, 2 services, 3 goods, 4/5 SEZ).
• GSTR-1 of refund period showing zero-rated or IDS-eligible supplies.
• GSTR-3B of refund period with tax payment evidence.
• ITC reconciliation worksheet (Net ITC per Rule 89(5) for IDS or Rule 89(4) for zero-rated).
• Bank statement evidencing IGST paid (for IGST-paid route).
• FIRC/FIRA/eBRC for service exports.
• CA Certificate above Rs 2 lakh (Section 54(8) unjust enrichment).
• Declarations under Rule 89(2)(l) and (m).

Documents for RFD-04 withholding defence (if applicable):

• Reasons recorded by officer in writing under Rule 91(2) proviso.
• Counter-evidence on each ground raised by the officer.
• Compliance track record proof (GSTR filing history).
• Section 107 pre-deposit calculation if appeal route chosen.

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free 90% Provisional Refund consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

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Outcome proof: A Surat textile manufacturer secured RFD-04 within 6 days of RFD-02 - Rs 28,80,000 of a Rs 32 lakh IDS claim credited within 22 days of RFD-01 filing post 01.10.2025. Patron's pre-filing 8-factor risk audit had remediated GSTR-2B mismatch and Rule 36(4) adjustment, securing low-risk classification on first run.

Trusted by Hyundai, Asian Paints, Bridgestone, and 200+ Indian businesses including textile, footwear, pharma, fertilizer, EV manufacturers under inverted duty structure plus IT services and goods exporters under zero-rated supply. With offices in Pune, Mumbai, Delhi, and Gurugram, Patron Accounting serves exporters and IDS manufacturers across India.

90 percent provisional refund optimisation is the procedural overlay across multiple refund categories. Common service bundles:

• GST refund (general) - the parent practice covering Section 54 refund spectrum including the categories eligible for 90 percent provisional path.
• GST returns filing - monthly GSTR-1 and GSTR-3B that underpin the compliance track record - a critical factor in low-risk classification.
• GST annual returns - GSTR-9 and GSTR-9C reconciliation ensuring no aged returns flag the system into non-low-risk routing.
• GST audit support - for taxpayers above the prescribed turnover threshold.
• GST registration - end-to-end registration for new exporters and IDS-affected manufacturers.
• IEC registration - mandatory for exporters of physical goods under Foreign Trade Policy.
• GSTAT appeal for exporters - second-tier appellate route where provisional refund denial or final sanction rejection requires escalation beyond Section 107.
• GST notice response - for RFD-08 SCNs and scrutiny notices on provisional or final refund claims.

Section 54(6) of CGST Act 2017: Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed.

Rule 91(1) of CGST Rules 2017: Provisional refund of 90 percent shall be granted only if the applicant has not been prosecuted for any offence under the Act or under any earlier law during five years preceding the tax period for which refund is claimed where amount of tax evaded exceeds rupees two hundred and fifty lakh.

Rule 91(2) of CGST Rules 2017 (post 01.10.2025 amendment): The proper officer, on the basis of identification and evaluation of risk by the system, shall make an order in Form GST RFD-04, within a period not exceeding seven days from the date of the acknowledgement under sub-rule (1) or sub-rule (2) of Rule 90. Proviso - the proper officer, for reasons to be recorded in writing, may not grant refund on provisional basis and proceed with full scrutiny under Rule 92.

Notification 13/2025-Central Tax dated 17 September 2025: Foundational amendment to Rule 91(2) of CGST Rules 2017 introducing the risk-based system identification mechanism for provisional refund. Effective 01.10.2025.

Notification 14/2025-Central Tax dated 17 September 2025: Identifies the class of registered persons not eligible for provisional refund of zero-rated supply or inverted duty structure - typically applicants flagged for compliance issues, ITC mismatch above thresholds, pending recovery, or prosecution under Section 132.

CGST Instruction 6/2025 dated 03 October 2025: Foundational instruction directing field formations to grant 90 percent provisional refund for IDS claims filed on or after 01.10.2025, similar to provisions for zero-rated supplies. Pending Finance Act amendment to Section 54(6) text recommended by 56th GST Council.

56th GST Council Meeting Recommendations: Recommended amendment to Section 54(6) of CGST Act to formally include inverted duty structure within statutory provisional refund mandate; Finance Act amendment forthcoming.

Section 54(7) of CGST Act 2017: Final order on refund application within 60 days from receipt of complete application (RFD-02).

Section 56 of CGST Act 2017: Interest on delayed refund - 6 percent per annum from 60th day after RFD-02; 9 percent for refunds pursuant to appellate orders or court orders.

Government references: GST portal, CBIC GST circulars and instructions, and indiacode.nic.in (CGST Act 2017).

Provisional refund deadlines run off the RFD-02 acknowledgement date. Patron tracks each milestone:

1. RFD-02 acknowledgement - within 15 days of RFD-01 (Rule 90(2)). Provisional clock cannot start without RFD-02.
2. RFD-04 provisional sanction - within 7 days of RFD-02 (amended Rule 91(2)). Working capital delayed if missed.
3. Withholding reasons recorded - within 7 days of RFD-02 (Rule 91(2) proviso). Defendable via Section 107 appeal or writ.
4. RFD-09 reply to RFD-08 SCN - within 15 days of RFD-08. Adverse order without reply is appealable.
5. RFD-06 final sanction - within 60 days of RFD-02 (Section 54(7)). 6 percent interest under Section 56 if delayed.
6. Section 56 interest entitlement - from day 61 after RFD-02. 9 percent for appellate-order refunds.
7. Section 107 appeal window - within 3 months of refund rejection. Pre-deposit 10 percent of disputed amount.
8. Article 226 writ petition - within reasonable time. IRCCL precedent on excessive delegation provides analytical anchor.

Get your 90 percent provisional refund eligibility check now - Call +91 945 945 6700 or WhatsApp us. Free 8-factor risk audit findings within 4 business hours.

90 percent provisional GST refund under Section 54(6) of the CGST Act 2017 read with Rule 91 of the CGST Rules 2017 is the working-capital-relief mechanism designed to ensure exporters and inverted duty structure manufacturers do not have their cash blocked while the proper officer completes full scrutiny. The principle is statutory - provisional refund is the rule, withholding is the limited exception. The 01 October 2025 transition was foundational - Notification 13/2025-CT amended Rule 91(2) to introduce a system-driven risk-based mechanism, CGST Instruction 6/2025 extended the 90 percent provisional facility to inverted duty structure refund claims, and Notification 14/2025-CT identified the ineligible class.

The system-driven low-risk classification under amended Rule 91(2) is undefined in the Act or Rules - the IRCCL critique on excessive delegation and Article 19(1)(g) constitutional protection of trade and business provides analytical anchor for challenges where withholding is unreasoned or pretextual. Patron Accounting LLP brings 15+ years of GST refund and Section 54(6) provisional sanction optimisation experience for 200+ exporters, SEZ suppliers, and IDS manufacturers with four offices in Pune, Mumbai, Delhi, and Gurugram. Taxpayers gain CA-led 8-factor pre-filing risk audit, RFD-04 daily tracking with grievance escalation, withholding defence pack with constitutional precedent, and Section 56 interest discipline on delayed final sanction.