GSTN Updates Portal: Refunds Now Allowed Even If Total Balance Is Zero or Positive

On August 28, 2025, GSTN issued Advisory No. 621, enabling taxpayers to claim refunds in cases where any individual minor head shows a negative balance- even when the cumulative Demand ID balance is zero or positive.

Background of Advisory:

Refunds under the ASSORD category were allowed only when the cumulative Demand ID balance was negative and the status was ‘Refund Due’.

This prevented refunds in situations where individual components had negative amounts, but the overall balance wasn’t negative.

Enables faster refund claims and unlocking trapped capital, improving liquidity and cash flow.

What was the issue with GST refunds for which this advisory had to be released?

The Goods and Services Tax (GST) refund issue was that when the minor heads of the GST demand (such as CGST, SGST, IGST, etc) had a negative balance i.e. had a tax demand but the other minor heads of the GST demand had a positive (refund) or zero balance then the portal was not permitting GST refunds for the positive balance.

 Let's suppose that if a taxpayer has a ₹130 positive balance in one of the heads of GST demand, but in another head, it was a ₹20 tax demand, hence the portal was not permitting a GST refund for the amount of ₹130.

GST refund simplified: GSTN has facilitated this GST portal change for a smooth tax refund claim.
This implied that if one of the minor heads (such as CGST, SGST, IGST, or Cess) was in red, but the total was either zero or positive, refunds were not permissible-tied up working capital.

Key Enhancements Implemented

Bullet out the system upgrades:

• Refunds can now be claimed irrespective of the Demand ID status, as long as a minor's head shows a negative balance.
• Refunds are not dependent on Demand ID status.
• Allowed even when the cumulative balance is zero or positive, as long as any minor head shows a negative.

Auto-population in Form RFD-01: The system will auto-populate only the negative balances in which into the Form RFD-01, and positive amounts will be excluded. 

Order suggestion feature: System suggests the most recent negative-balance-related order (original, rectified, appellate).

Tooltips added: Guidance added near “Order No.” and “Demand ID” fields for clarity.

Taxpayer advantages: Eases liquidity challenges by unlocking accessible refunds faster.

When are you eligible for a GST refund?

As per a GST Council brochure, here are the circumstances when you can become eligible for a GST refund:

A Refund claim may crop up due to:

• Export of goods or services
• Supplies to units and developers of SEZs
• Supply of goods treated as Deemed Exports
• Refund of purchase tax paid by UN or Embassies etc, under Section 55 of the CGST Act, 2017
• Refund on account of judgment, decree, order, or direction of Appellate Authority, Appellate Tribunal, or court
• Refund of carried forward Input Tax Credit on account of inverted duty structure
• Refund of pre-deposit
• Excess/mistaken payment of tax
• Refund to Foreign tourists of GST paid on imported goods in India and brought back with them while leaving India (not notified as yet);
• Refund of tax paid in the wrong head under Section 77 of the CGST Act, 2017 & Section 19 of the IGST Act, 2017 (treating the supply as intra-State supply which is later held as inter-State supply and vice versa);
• Refund due to any other reasons.

Sources:.services.gst.gov.in/services/advisoryandreleases/read/621
Advisory Reference: GSTN Advisory No. 621, dated August 28, 2025.