💡 CBIC Instruction No. 06/2025-GST – A New Era for Faster GST Refunds

The CBIC has issued Instruction No. 06/2025-GST dated 3rd October 2025, introducing a major reform in the GST refund process. Based on the recommendation of the 56th GST Council meeting held on 3rd September 2025, this instruction aims to make refunds faster, smarter, and risk-based — a welcome change for exporters and manufacturers facing working capital challenges.

Let’s understand what this instruction means, how it works, and what professionals and taxpayers must do to benefit from it.

🧾 Background – Why This Instruction Matters

Refund delays have long been a concern under GST, especially for exporters and manufacturers under the Inverted Duty Structure (IDS). Liquidity blockage due to pending refunds often affects cash flow and business continuity.

Earlier, under Rule 91(2) of the CGST Rules, provisional refund up to 90% was allowed only in cases of zero-rated supplies (exports). However, it required detailed scrutiny by officers, often resulting in delays.

The GST Council, therefore, decided to introduce a data-driven, risk-based system — where refund applications identified as low risk by the system would get 90% of refund sanctioned provisionally with minimal manual intervention.

🧩 Legal Foundation

• Notification No. 13/2025 – Central Tax (17th September 2025) amended Rule 91(2) of the CGST Rules.

• The amendment became effective from 1st October 2025.

• The CBIC Instruction No. 06/2025-GST provides detailed implementation guidelines for officers and taxpayers.

🚀 Key Highlights of Instruction No. 06/2025-GST

1️⃣ Risk-Based Refund Processing

Refund claims will now be categorized as low-risk or high-risk based on system-generated risk scores.Low-risk claims will be eligible for provisional sanction of 90% of the claimed amount immediately after acknowledgment.

2️⃣ Wider Coverage – Inverted Duty Structure (IDS)

Although Section 54(6) of the CGST Act currently allows provisional refund only for zero-rated supplies, the instruction extends this facility as a trade-facilitation measure to refund claims under IDS filed on or after 1st October 2025, until the law is formally amended.

3️⃣ Categories Not Eligible for Provisional Refund

Provisional refund will not be granted to:

• Taxpayers not Aadhaar-authenticated under Rule 10B.

• Persons dealing in notified goods like areca nuts, pan masala, tobacco, gutkha, etc.

• Cases identified as high-risk by the systemic risk parameters (based on past compliance, return mismatches, or pending adjudications).

4️⃣ Officer’s Discretion with Accountability

Even if a case is marked low-risk, the proper officer may choose not to grant provisional refund if there are valid reasons (to be recorded in writing). In such cases, refund will be processed after detailed scrutiny under Rule 92.

5️⃣ Recovery in Case of Excess Refund

If the finally sanctioned refund is found to be less than the provisional refund, the excess amount will be recovered by issuing Show Cause Notice in Form GST RFD-08.

6️⃣ Faster Turnaround

Since system-driven risk classification and Aadhaar authentication are integrated, genuine and compliant taxpayers will receive refunds within a much shorter time — addressing one of the most common grievances under GST.

🧮 Example: How This Works

Let’s say an exporter files a refund claim of ₹10 lakh for August 2025.If the application passes system-based risk checks and is classified as low-risk:

• ₹9 lakh (90%) will be sanctioned provisionally within a few days.

• The remaining ₹1 lakh will be released after due verification and final order under Rule 92.

If later it is found that only ₹8 lakh is admissible, the excess ₹1 lakh (already provisionally refunded) will be recovered with applicable interest.

📋 Checklist for Taxpayers & Professionals

Before filing refund claims under this new system, ensure the following:

✅ Aadhaar authentication of authorised signatory and proprietor/partner is complete under Rule 10B.

✅ GST returns (GSTR-1 & 3B) are filed correctly and timely for the relevant period.

✅ Export documentation (shipping bills, invoices, LUTs) matches the declared refund figures.

✅ No pending show-cause notices or adjudication related to earlier refund claims.

✅ Inverted Duty Structure claims are supported by clear input-output tax rate data.

✅ Maintain reconciliation between GSTR-2B, books, and refund statements.

🏢 What This Means for Businesses

This instruction is a major step toward simplifying refund processing and improving ease of doing business. For exporters and manufacturers, it reduces liquidity stress and encourages faster turnover of working capital.

However, it also puts the onus on taxpayers to maintain clean, consistent data and comply with authentication norms. System-based risk scoring will reward disciplined compliance — meaning, businesses with transparent records will get faster refunds.

👩‍💼 For Chartered Accountants & GST Consultants

This reform changes the approach from manual follow-ups to data hygiene and compliance risk management.As advisors, we should focus on:

• Educating clients about Aadhaar authentication and timely filings.

• Strengthening refund documentation and reconciliations.

• Regularly checking client refund risk status and flagging mismatches early.

• Preparing internal refund review checklists to reduce the chance of being tagged “high risk.”

This is not just a procedural change — it’s a strategic shift in how compliance discipline translates to business efficiency.

🔍 Our Take

CBIC’s Instruction No. 06/2025-GST signals a maturing GST ecosystem — one that relies more on analytics, automation, and trust-based governance.

While the refund process is still subject to scrutiny, genuine taxpayers can now experience a much smoother process, provided they maintain compliance consistency.

For businesses struggling with cash flow due to refund delays, this instruction offers real liquidity relief.

✍️ Final Thought

As we step into a more digital and data-driven GST era, taxpayers must evolve too.Clean compliance, consistent data, and proactive communication with authorities will be the key to availing faster refunds and avoiding scrutiny.

CBIC Instruction No. 06/2025-GST is not just an administrative change — it’s a signal to compliant businesses that the system is ready to reward transparency.