A paid refund can require a later realisation reconciliation
Rule 96B applies to the stated unutilised-ITC or integrated-tax refund on export of goods when sale proceeds are not realised fully or partly within the FEMA-allowed period, including extension. Checked on 28 October 2026, this guide isolates that post-refund goods-export control. It does not prescribe a universal FEMA realisation deadline or extend the goods rule indiscriminately to export services. Obtain the transaction's actual permitted period and extension before treating an invoice as overdue. ICAI GST bare law, April 2026: operative CGST Rule 96B.
Identify the refund and affected export population
Match the paid refund, shipping/export evidence, invoice proceeds and bank receipts. A pending refund application is different from a refund already paid. Allocate receipts to the correct invoice and currency before calculating the unrealised proportion. The examples use homogeneous invoice-level refund allocation already legally established, with no valuation, currency or other dispute; a portfolio-wide percentage without tracing can conceal fully realised and wholly unpaid exports. ICAI GST bare law, April 2026: operative CGST Rule 96B.
Calculate the amount linked to non-realisation
Sub-rule (1) requires deposit of refund to the extent of non-realisation, with applicable interest, within thirty days after the allowed or extended period expires. Separate refund principal from the export receivable itself: the amount to deposit is not automatically the whole unpaid sale value. Record interest in its own verified working rather than inventing a rate or start date from this proportional model. Failure to deposit engages the applicable recovery provisions stated in the rule, including the relevant section 73, 74 or 74A route. ICAI GST bare law, April 2026: operative CGST Rule 96B.
Distinguish a write-off from the rule's exception
The proviso addresses RBI writing off the requirement of realisation on merits. An accounting write-off, a sales-manager approval or an insurer's rejection does not by itself establish that exception. Retain the actual authority, scope and covered proceeds. Where reliance is placed on action through an authorised dealer or another permitted mechanism, establish why the actual evidence satisfies the legal exception rather than equating all write-offs. ICAI GST bare law, April 2026: operative CGST Rule 96B.
Later recovery of proceeds needs more than a bank credit
Under sub-rule (2), after recovery of the refund from the applicant, later realisation can support refund to the extent realised if evidence is produced within three months of realisation and the proceeds are realised within an RBI-permitted extended period. The evidence window and permitted-realisation period are distinct conditions. A later bank receipt alone neither proves timely evidence nor creates an extension. Maintain links between recovery payment/order, later receipt, extension and submission acknowledgment. ICAI GST bare law, April 2026: operative CGST Rule 96B.
Close the tax and receivable ledgers separately
Keep the customer balance, original refund, recovery principal, interest, later realisation and any restored refund as separate movements. A receipt can reduce the export receivable without yet proving entitlement to tax repayment. Conversely, tax recovery does not itself extinguish the customer's debt. The fictional models exclude interest and assume supported refund attribution; they demonstrate the reconciliation rather than eligibility for the original export refund. ICAI GST bare law, April 2026: operative CGST Rule 96B.
Applicable primary references
ICAI GST bare law, April 2026: operative CGST Rule 96B
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Partial non-realisation
Assume goods sale value ₹10 lakh, attributable refund paid ₹1 lakh and proceeds ₹8 lakh realised by the permitted date. Unrealised proportion is 20%; model refund principal to deposit is ₹20,000, not the ₹2 lakh customer balance.
Illustrative example 2: No proceeds realised
Assume sale ₹6 lakh and attributable refund ₹60,000, with no realisation and no qualifying exception. Principal linked to non-realisation is the full ₹60,000, plus separately applicable interest.
Illustrative example 3: Trace two invoices
Assume two invoices each ₹5 lakh with attributable refund ₹50,000 each. First is fully realised; second has ₹2 lakh received. Unpaid fraction of the second is 3/5, giving ₹30,000 recovery principal. The first contributes zero.
Illustrative example 4: Use the actual extended expiry
Assume the legally permitted extended period ends on 30 September 2026. Thirty elapsed calendar days afterwards lead to 30 October 2026 in this isolated counting model. An original earlier expiry must not be used after a valid covering extension has been established.
Illustrative example 5: Later partial realisation
Assume sale ₹10 lakh, original refund ₹1 lakh, initial realisation ₹6 lakh and refund principal ₹40,000 subsequently recovered. A further ₹2 lakh is then realised within the RBI-permitted extension and all sub-rule (2) conditions are met. Model principal restoration is ₹20,000, leaving ₹20,000 recovered against the still-unrealised ₹2 lakh. Interest treatment needs separate analysis.
Illustrative example 6: Diary the evidence window
Assume qualifying later realisation on 12 August 2026. Three calendar months lead to 12 November 2026. Evidence submitted on 13 November is one day later in this isolated model; the receipt alone does not cure a missed statutory evidence condition.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Confirm goods-export scope | Refund category and paid amount |
| 2 | Match underlying exports | Invoices and export documents |
| 3 | Establish permitted realisation dates | FEMA rules and actual extension evidence |
| 4 | Allocate bank receipts | Invoice/currency-level bank proof |
| 5 | Compute unrealised proportions | Supported refund attribution |
| 6 | Separate principal and interest | Recovery working and verified interest basis |
| 7 | Diary thirty-day deposit | Actual permitted expiry and payment evidence |
| 8 | Examine claimed write-off relief | Authority and satisfaction of the proviso |
| 9 | Track later realisation conditions | Permitted extension and three-month evidence window |
| 10 | Close linked ledgers | Receivable, refund, recovery and restoration reconciliation |
Sixteen practitioner FAQs
1. Does Rule 96B concern export goods?
Yes, its stated refund populations relate to goods.
2. Does this guide prescribe a universal FEMA deadline?
No. Establish the applicable transaction period.
3. Can a valid extension matter?
The rule expressly includes extension.
4. Is a pending refund the same as one already paid?
No. Verify the actual refund status.
5. Is the unpaid sale amount automatically the recovery principal?
No. Calculate the attributable refund extent.
6. Can partial realisation matter?
Yes. Trace the realised and unrealised populations.
7. Can unrelated receipts simply be netted against every invoice?
Use supported allocation evidence.
8. Is interest included in these proportional examples?
No. It requires a separately verified working.
9. When is the stated deposit required?
Within thirty days after the relevant period expires.
10. Does an internal accounting write-off automatically satisfy the proviso?
No. Establish the required RBI write-off-of-realisation condition.
11. Is every insurer decision an RBI exception?
No.
12. Can later proceeds potentially support repayment?
Sub-rule (2) provides its conditional route.
13. What is the evidence period there?
Three months from realisation.
14. Must the later proceeds fall within an RBI-permitted extension?
That is an express sub-rule (2) condition.
15. Does paying tax recovery extinguish the customer debt?
No. The ledgers record different obligations.
16. What completes the file?
Linked export, receipt, extension, recovery and submission evidence.
Conclusion
Match export-goods refunds to unrealised proceeds, use the actual FEMA-permitted period, and retain the evidence and extension needed for any later refund restoration.