The pendency of GST refund claims has declined significantly over the past two years as of March 31, 2026, according to Parliamentary information. Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha that 64 claims involving a refund amount of about ₹164 crore were pending for more than 60 days but up to 90 days as of March 31, 2026. This represents a substantial reduction from 907 claims involving ₹274 crore at the end of FY24 and 374 claims worth ₹246 crore as of FY25. The improvement is particularly notable for claims exceeding 90 days, where 110 claims involving ₹64 crore are pending as of March 31, 2026, compared to 1,592 claims worth ₹696 crore as of FY24 and 712 claims totaling ₹560 crore as of FY25.
The improvement in GST refund processing is attributed to several factors, as reported by the Minister. The delay in processing of refund claims is mainly on account of delayed submission of documents and delayed submission of replies by the taxpayers in response to notices issued to them, along with requests made by taxpayers for keeping the refund claim pending for seeking time for submission of additional documents and details against show cause notices. Additionally, in a limited number of cases, system-related issues have contributed to processing delays. The government attributes the overall delay reduction to improved documentation submission by taxpayers and better compliance with refund processing timelines.
The government has implemented several technological improvements to streamline GST refund processing. According to the Minister's statement, refunds on account of export of goods made on payment of IGST are processed in a fully automated electronic mode through the Customs system without manual intervention through integration of the GST portal with the ICEGATE system of CBIC. Additionally, provisional refund of 90 per cent of the claim is being sanctioned on the basis of data analysis and risk evaluation by the system in case of zero-rated supply within 7 days of the acknowledgement of refund application.
The government has introduced several measures to enhance transparency and accountability in GST refund processing. As reported by the Minister, a facility has been provided to the registered taxpayers to track the status of their refund application on the common portal at every stage. The grounds of rejection of refund claims are communicated in a speaking order under the provisions of the CGST Act, 2017. These measures aim to provide greater visibility and clarity to taxpayers regarding the status and reasons for any delays in their refund claims, while the automated tracking system ensures better oversight of the entire refund processing cycle.
