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Yes. Refund of unutilised ITC on exports is based on your credit, so credit from risky suppliers directly affects refunds. Refunds are now processed with risk assessment, and doubtful credit can hold up or reduce your claim.
GST
Supplier due diligence for exporters claiming refunds
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Provisions
Sec 16(2)(c), CGST Act 2017; Sec 54(3), CGST Act 2017; Rule 86A, CGST Rules 2017
Analysis
From 1 October 2025, provisional refunds are given on system risk assessment; high-risk claims can be withheld. Credit from cancelled or non-filing suppliers in your Annexure B invites a deficiency memo or show cause. Example: an exporter claiming Rs 20 lakh refund finds Rs 2 lakh credit from a supplier cancelled from inception; it should be excluded or fully supported before filing.
Close
- Check every supplier in your refund period's purchase list on the portal
- Exclude or separately support credit from cancelled or non-filing suppliers
- Keep transport and payment proof for high-value purchases
- File the refund only after this review
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