Bunching Refund Claims: What You May and May Not Combine

Bunching Refund Claims explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Filing a refund every month is expensive. Filing one claim for two years is not permitted. The line between them has moved, and it is worth knowing where it now sits.

A refund claim under s.54(3) is made for a tax period, and tax periods may be clubbed within a claim. Circular No. 125/44/2019-GST originally required that a claim not span two financial years. The Delhi High Court in Pitambra Books Pvt Ltd read down that restriction as not supported by the statute. The Board subsequently issued Circular No. 135/05/2020-GST removing the restriction on clubbing across financial years, subject to the claim otherwise being in order.

The starting point

Section 54(3): a registered person may claim refund of any unutilised input tax credit at the end of any tax period.

"Tax period" under s.2(106) means the period for which the return is required to be furnished — a month for a monthly filer, a quarter for a QRMP taxpayer.

Nothing in the section limits a claim to a single tax period, and Rule 89(1) speaks of an application by "any person claiming refund", without a period restriction.

The circular restriction, and what happened to it

Circular No. 125/44/2019-GST consolidated the refund procedure and provided that the applicant may club successive tax periods, but that a refund claim could not spread across different financial years.

In Pitambra Books Pvt Ltd v. Union of India, the Delhi High Court considered the restriction and held that the circular could not impose a limitation that the statute and the rules did not contain. A circular is an instrument of administration and cannot narrow a statutory entitlement.

The Board then issued Circular No. 135/05/2020-GST, which removed the restriction on clubbing tax periods across financial years, in view of the judgment.

The current position: tax periods may be clubbed, including across financial years, provided the claim is otherwise in order and the limitation for each constituent period is satisfied.

What still constrains a claim

The relevant date runs period by period. For a refund of unutilised credit, Explanation (e) to s.54 fixes the relevant date as the due date of the s.39 return for the period in which the claim arises. So combining periods does not create a single clock — each period retains its own two-year limit, and the oldest period in a bunched claim is the one at risk. The relevant date →

The formula operates on the combined period. Where periods are clubbed, Net ITC, turnover and Adjusted Total Turnover are computed for the whole period covered by the claim, not period by period. A bunched claim can therefore produce a different figure from the sum of separate claims, because the ratio changes. Rule 89(4) →

One claim per category, per period. A claim for zero-rated supplies and a claim for inverted duty are separate applications, even for the same months.

The credit ledger must carry the balance. Rule 89(3) debits it on filing, for the whole claimed amount at once.

A rejected or withdrawn period cannot be re-filed selectively without care — a fresh application after a deficiency memo covers the same period, and the periods should be kept aligned.

Choosing the frequency

Monthly — maximum liquidity, maximum administrative cost, and the safest position on limitation. Suits a large exporter with a substantial recurring claim.

Quarterly — a common compromise. Three months' credit in one application, well inside the two-year limit, with a quarter of the filing effort.

Half-yearly or annual — lower cost, but the oldest month in the claim is six or twelve months closer to its limit by the time the claim is filed, and any deficiency memo consumes more of the remaining window.

Ad hoc — the worst option. Claims filed when someone remembers are the ones that time-bar.

The practical rule: claim frequently enough that no period is within six months of its limit when the application is filed, leaving room for a deficiency memo and a fresh application.

Practical notes

• Run the formula both ways for a bunched claim — combined, and as the sum of separate periods — and understand why they differ before filing.
• Track the oldest period's limitation in every bunched claim.
• Keep the periods contiguous. A claim skipping a month invites a query about the omitted period.
• Do not bunch across a rate change without checking the effect on the turnover ratio.
• Where a deficiency memo issues, the fresh application covers the same bunched periods, and the Rule 90(3) proviso excludes only the department's holding time from the limitation. Rules 90 and 92 →

Key takeaways

• Tax periods may be clubbed, and the financial-year restriction was removed by Circular No. 135/05/2020-GST following the Delhi High Court in Pitambra Books.
• Each period retains its own two-year clock, so the oldest period in a bunched claim governs the risk.
• The formula operates on the combined period, which can change the figure.
• Separate categories require separate applications.
• Quarterly filing is the usual practical compromise.
• Claim while every period is well inside its limit, to leave room for a deficiency memo.

Read next

• The Relevant Date: Eleven Starting Points for Two Years
• Rule 89(4): The Zero-Rated Refund Formula
• Rules 90 and 92: Acknowledgement, Deficiency and Sanction
• The Refund File: What to Assemble Before You Submit

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition), Circular No. 125/44/2019-GST and Circular No. 135/05/2020-GST.