Section 55 of the Central Goods and Services Tax (CGST) Act, 2017 provides a special refund mechanism for certain specified persons and organisations that are entitled to claim a refund of GST paid on notified supplies received by them.
Unlike the general refund provisions under Section 54, which apply to a broad range of taxpayers and refund situations, Section 55 is specifically designed for certain specialised agencies, international organisations, diplomatic missions, consulates, embassies and other notified persons or classes of persons.
The provision recognises that certain organisations enjoy special privileges or exemptions under international agreements, diplomatic arrangements or government notifications. Instead of simply treating their GST burden in the same manner as an ordinary taxpayer, the law allows the Government, on the recommendation of the GST Council, to notify eligible persons who can claim a refund of tax paid on specified inward supplies.
Section 55 therefore needs to be read together with the relevant notifications and Rule 95 of the CGST Rules, 2017, because the section itself establishes the entitlement framework while the rules prescribe the procedure and conditions for claiming the refund. CBIC’s refund rules specifically provide a separate procedure for persons covered by a notification issued under Section 55.
What is Section 55 of the CGST Act?
Section 55 is titled “Refund in certain cases.”
The provision authorises the Government, on the recommendations of the GST Council, to notify specified persons who can claim a refund of taxes paid on notified supplies of goods or services received by them.
The statutory provision covers:
- Specialised agencies of the United Nations Organisation;
- Multilateral Financial Institutions;
- Organisations notified under the United Nations (Privileges and Immunities) Act, 1947;
- Consulates;
- Embassies of foreign countries; and
- Any other person or class of persons that may be specified by the Government.
The refund is not automatic merely because an organisation belongs to one of these broad categories. The person must be covered by the applicable notification and satisfy the conditions and restrictions prescribed under the law.
The exact wording of Section 55 provides that the Government may, on the recommendations of the GST Council and by notification, specify eligible persons who shall be entitled to claim refund of taxes paid on notified supplies received by them.
Why Was Section 55 Introduced?
GST is generally charged on taxable supplies even when the recipient is a diplomatic mission or international organisation, unless a specific exemption applies.
However, India has international obligations and diplomatic arrangements under which certain organisations and missions may enjoy tax-related privileges.
Section 55 provides a mechanism through which the Government can implement such privileges through a refund mechanism.
Instead of creating a blanket exemption for every purchase made by every diplomatic or international organisation, the Government can notify:
- Who is eligible;
- Which supplies qualify;
- What conditions must be satisfied;
- What documents must be submitted;
- What restrictions apply; and
- How the refund is to be claimed.
This makes Section 55 a notification-based special refund provision.
Who Can Claim Refund Under Section 55?
Section 55 does not give every foreign organisation or government-related entity an unconditional right to a GST refund.
The Government may notify particular persons or classes of persons.
The categories expressly mentioned in the section include:
1. Specialised Agencies of the United Nations Organisation
Certain specialised agencies associated with the United Nations may be covered by notifications issued under Section 55.
Eligibility depends upon the applicable notification and the conditions specified in it.
2. Multilateral Financial Institutions
Multilateral financial institutions and organisations can be notified for refund treatment under Section 55.
The relevant notification determines the extent and conditions of the benefit.
3. Organisations Notified Under the UN Privileges and Immunities Act
Section 55 also refers to organisations notified under the United Nations (Privileges and Immunities) Act, 1947.
The reference is important because the GST refund mechanism is connected with India’s existing legal framework relating to privileges and immunities.
4. Consulates
Foreign consulates can fall within the class of persons contemplated by Section 55, subject to notification and applicable conditions.
5. Embassies of Foreign Countries
Foreign embassies may also be covered by notifications under Section 55.
However, the refund applies only to the supplies and conditions covered by the relevant notification.
6. Other Notified Persons or Classes of Persons
The section is not limited to the categories specifically listed above.
It allows the Government to notify any other person or class of persons for the purpose of Section 55.
This gives the Government flexibility to implement specific tax privileges through the notification mechanism.
Section 55 Is Different from Section 54
Although both sections deal with refunds, their purposes are different.
| Particular | Section 54 | Section 55 |
|---|---|---|
| Main purpose | General GST refund mechanism | Special refund mechanism |
| Eligible persons | Broad range of eligible claimants | Persons/classes specifically notified |
| Typical claims | Excess tax, zero-rated supplies, unutilised ITC and other refunds | Tax paid on notified inward supplies |
| Procedure | Mainly Rule 89 onwards | Specifically Rule 95 for Section 55 persons |
| Special status required | Generally no | Yes, notification-based eligibility |
| Main application | FORM GST RFD-01 for many claims | FORM GST RFD-10 under Rule 95 |
| Basis | CGST Act and applicable rules | Section 55 + notification + Rule 95 |
The distinction is important because a person covered by a Section 55 notification follows the special refund procedure, rather than simply filing an ordinary refund application under the general procedure applicable to other claimants.
CBIC’s Rule 89 expressly excludes persons covered by a notification issued under Section 55 from the general refund application provision, while Rule 95 provides the specific procedure for them.
Refund Is Available Only on Notified Supplies
A crucial feature of Section 55 is that the refund is not available for every GST-paid purchase made by an eligible organisation.
The section refers specifically to “notified supplies of goods or services or both.”
This means that two questions must be answered before claiming the refund:
- Is the organisation covered by a Section 55 notification?
- Is the particular inward supply covered by that notification?
If either requirement is not satisfied, a Section 55 refund may not be available.
Therefore, simply being an embassy, consulate or international organisation does not mean that every GST payment made by the organisation automatically becomes refundable.
The applicable notification must always be checked.
Procedure for Claiming Refund Under Section 55
The procedure is primarily prescribed under Rule 95 of the CGST Rules, 2017.
A person eligible to claim refund under a Section 55 notification is required to apply in FORM GST RFD-10.
The application is filed electronically on the common portal, and the claimant is required to submit a statement of inward supplies in FORM GSTR-11.
Rule 95 specifically provides that the application is made once every quarter along with the relevant statement of inward supplies.
Therefore, the basic process can be understood as:
Eligible person → Receive notified inward supplies → Maintain invoice details → Prepare GSTR-11 → File RFD-10 → Verification → Refund sanction/payment
What is FORM GST RFD-10?
FORM GST RFD-10 is the refund application prescribed for persons eligible for refund under Section 55.
It is different from the general refund application in FORM GST RFD-01.
This distinction is important because Section 55 claimants follow a specialised refund procedure.
The application contains information necessary for the tax authorities to verify the claimant’s eligible inward supplies and the corresponding GST paid.
What is FORM GSTR-11?
FORM GSTR-11 is the statement of inward supplies associated with the Section 55 refund mechanism.
The eligible person uses the statement to provide details of the purchases on which GST has been paid and for which refund is being claimed.
Rule 95 links the refund application in RFD-10 with the statement of inward supplies in GSTR-11.
The information in GSTR-11 is important because the tax authorities need to verify:
- Supplier details;
- Invoice details;
- GST charged;
- Eligible inward supplies;
- Tax paid; and
- Compliance with the conditions of the applicable notification.
Important Conditions for Refund Under Rule 95
Rule 95 prescribes conditions for refund under Section 55.
The rules provide that refund of tax paid by the applicant is available where the prescribed requirements are satisfied.
The relevant inward supplies must generally be received from a registered person against a tax invoice, and the prescribed conditions relating to the invoice and claimant must be satisfied.
The rule also requires that the name and GSTIN or UIN of the applicant be mentioned on the tax invoice, subject to the applicable provisions and amendments.
Other restrictions or conditions specified in the relevant Section 55 notification must also be satisfied.
GSTIN and UIN on the Tax Invoice
Correct identification of the eligible organisation is an important part of the Section 55 refund mechanism.
The tax invoice should contain the relevant identification details of the claimant as required by Rule 95.
These details help establish that the supply was actually received by the person claiming the refund.
An invoice issued without the required identification details can therefore create difficulties when the refund claim is examined.
For this reason, eligible organisations should ensure that suppliers issue invoices with the correct:
- Legal name;
- GSTIN or UIN, as applicable;
- Invoice number;
- Invoice date;
- Taxable value;
- GST amount; and
- Other prescribed particulars.
Minimum Invoice Value and Rule 95
Rule 95 has historically contained an invoice-value condition for certain Section 55 refunds, including a reference to supplies covered by a single tax invoice exceeding ₹5,000 excluding tax.
However, the version of Rule 95 published by CBIC records amendments to this condition, including an amendment that omitted the ₹5,000 condition with effect from 1 July 2017.
Therefore, taxpayers and eligible organisations should not rely on older guides that continue to state a ₹5,000 minimum invoice requirement without checking the current rule and applicable notification.
The current notification governing the particular claimant and supply should be checked along with Rule 95 before determining eligibility.
Role of the Applicable Notification
Section 55 itself establishes the legal authority for the special refund mechanism, but the practical eligibility conditions are heavily dependent upon the notification issued under the section.
The notification may determine:
- Eligible organisations;
- Eligible supplies;
- Period of eligibility;
- Documentary requirements;
- Invoice requirements;
- Restrictions;
- Frequency of refund claims;
- Conditions relating to payment;
- Any special exclusions; and
- Other procedural requirements.
Therefore, Section 55 should not be read in isolation.
A proper Section 55 refund analysis generally requires checking:
Section 55 + Relevant Notification + Rule 95 + Other Applicable GST Provisions
Refund Is Not the Same as GST Exemption
Section 55 provides a refund mechanism, not necessarily an exemption from GST at the time of purchase.
This distinction is important.
Suppose an eligible organisation purchases a taxable service from a registered supplier.
The supplier may charge GST on the supply according to the applicable law.
If the organisation is covered by a Section 55 notification and the supply qualifies under that notification, the organisation may subsequently claim a refund of the eligible tax.
Thus:
GST exemption: Tax may not be charged where the exemption applies.
Section 55 refund: Tax may be paid on the supply and subsequently refunded to an eligible notified person, subject to the applicable conditions.
This distinction also explains why proper tax invoices and supporting documentation are important.
Why Suppliers Must Issue Proper Invoices
A Section 55 claimant generally depends on supplier-issued invoices to establish the tax paid on eligible inward supplies.
An incorrect invoice can therefore create problems during refund processing.
Suppliers dealing with embassies, consulates or eligible international organisations should carefully verify:
- Recipient name;
- GSTIN/UIN where applicable;
- Nature of supply;
- Taxable value;
- GST rate;
- GST amount;
- Invoice date;
- Invoice number; and
- Other mandatory particulars.
The eligible organisation should also verify invoices before including them in GSTR-11.
Refund Verification
After the refund application is filed, the tax authorities examine the claim.
The purpose of verification is to determine whether:
- The claimant is eligible;
- The supplies are covered by the applicable notification;
- The invoices are genuine;
- The supplier is registered where required;
- GST has actually been charged;
- The claimant’s GSTIN or UIN is correctly reflected;
- The claim has been made for the correct period;
- The amount claimed is correct; and
- All notification conditions have been satisfied.
The refund rules provide for acknowledgement and the subsequent sanction/payment process.
Rule 95 provides that the provisions relating to sanction and payment of refund apply to Section 55 claims in the prescribed manner.
FORM GST RFD-02
After receipt of the refund application, an acknowledgement is issued in FORM GST RFD-02.
This acknowledgement is part of the refund-processing framework and confirms receipt of the application.
The subsequent processing depends on verification of the claim and the applicable conditions.
Consumer Welfare Fund and Section 55
The general GST refund framework contains the principle of unjust enrichment.
In ordinary refund cases, where the incidence of tax has been passed on to another person, the amount may be credited to the Consumer Welfare Fund rather than paid to the applicant, subject to the statutory exceptions.
Section 55 claims have their own specific statutory and procedural framework.
The treatment of a particular claim must therefore be examined under Section 55, the relevant notification and the applicable refund rules rather than automatically applying the general assumptions applicable to every Section 54 refund.
Section 55 and International Agreements
Section 55 contains an important connection with international agreements.
Rule 95 provides that where an express provision in a treaty or other international agreement to which the President or Government of India is a party is inconsistent with the provisions of the refund chapter, the treaty or international agreement prevails.
This is significant for diplomatic missions and international organisations because their tax privileges can arise from international legal arrangements.
The rule therefore recognises the importance of India’s treaty obligations when applying the GST refund mechanism to eligible persons.
Example of Section 55 Refund
Suppose a foreign diplomatic mission in India is covered by a notification issued under Section 55.
The mission purchases eligible services from a registered Indian supplier.
The supplier issues a tax invoice showing:
- Correct name of the diplomatic mission;
- Applicable GST identification details;
- Taxable value;
- GST amount; and
- Other prescribed invoice particulars.
The diplomatic mission pays the supplier, including GST.
If the supply is covered by the applicable Section 55 notification and all conditions are satisfied, the mission can include the eligible inward supply in its GSTR-11 and submit the prescribed refund application in RFD-10.
After verification, the eligible refund may be sanctioned according to the applicable rules.
The important point is that the refund arises because the organisation is a notified person receiving a notified supply, not merely because it is a foreign organisation.
Example of an Ineligible Claim
Suppose an organisation claims that it should receive a GST refund simply because it is associated with an international institution.
However, assume:
- The organisation is not covered by the relevant notification; or
- The particular supply is outside the notified category; or
- The required invoice details are missing; or
- Another condition in the notification is not satisfied.
In such a situation, the organisation cannot assume that the GST is refundable under Section 55.
Eligibility must be established under the applicable notification and rules.
Section 55 vs Section 54
The difference can be understood through a practical example.
A normal exporter claiming refund of eligible unutilised ITC would generally use the refund mechanism under Section 54 and the applicable rules.
An embassy covered by a Section 55 notification seeking refund of GST paid on eligible inward supplies would follow the special Section 55 mechanism.
Therefore, the same word—“refund”—can refer to different legal procedures depending on the claimant and the reason for the refund.
Section 55 vs Section 56
Section 55 deals with refund in certain cases.
Section 56 deals with interest on delayed refunds.
Therefore:
- Section 55 → Eligibility and special refund framework for notified persons.
- Section 56 → Interest where an eligible refund is delayed in the circumstances specified by law.
These provisions should not be confused.
Section 55 vs Section 57
Section 57 establishes the Consumer Welfare Fund.
Section 55, on the other hand, deals with the special refund entitlement of specified persons.
The Consumer Welfare Fund becomes relevant to the wider GST refund framework where refundable amounts are required to be credited to the Fund under the unjust-enrichment provisions.
Thus, Sections 55 and 57 address different aspects of GST administration.
Important Compliance Points for Section 55 Refund
Eligible organisations should maintain a strong documentation process.
Important checks include:
- Confirm that the organisation is covered by a valid Section 55 notification.
- Verify that the particular inward supply is covered by the notification.
- Ensure that the supplier is registered where required.
- Obtain proper tax invoices.
- Verify the name of the eligible organisation on the invoice.
- Verify the GSTIN or UIN details where applicable.
- Reconcile invoices with GSTR-11.
- Maintain proof of payment and other supporting records.
- File the refund claim in the prescribed form.
- Follow the applicable quarterly refund procedure under Rule 95.
- Check notification-specific restrictions before claiming refund.
- Preserve supporting documents for verification.
- Check the applicable treaty or international agreement where relevant.
- Do not rely solely on old Section 55 refund guides because notifications and procedural requirements can change.
Common Mistakes in Section 55 Refund Claims
1. Assuming eligibility without checking the notification
Being an embassy, consulate or international organisation does not by itself establish eligibility for every refund.
2. Claiming refund on non-notified supplies
Only supplies covered by the applicable notification qualify.
3. Incorrect invoice details
Incorrect recipient identification can create difficulties during verification.
4. Missing GSTR-11 information
The inward supply statement is an important part of the refund procedure.
5. Using the wrong refund form
Section 55 claims follow the special procedure under Rule 95 rather than simply following the general procedure applicable to ordinary claimants.
6. Ignoring notification-specific conditions
The notification may impose conditions that are not obvious from the bare wording of Section 55.
7. Relying on outdated information
GST refund rules, notifications and procedures have been amended from time to time. Current CBIC provisions and the notification applicable to the claimant should be checked before filing.
Key Features of Section 55
The major features of Section 55 can be summarised as follows:
- It provides a special GST refund mechanism.
- It applies to persons specifically notified by the Government.
- The Government acts on the recommendations of the GST Council.
- Eligible categories include certain UN agencies, multilateral financial institutions, consulates and foreign embassies.
- Other persons or classes of persons may also be notified.
- Refund is available only for notified supplies.
- Conditions and restrictions can be prescribed.
- Rule 95 provides the specific procedural framework.
- Eligible persons generally use FORM GST RFD-10.
- FORM GSTR-11 is used for the relevant inward supply statement.
- Correct invoice details are important.
- The applicable notification must always be checked.
- International treaties or agreements can have significance where Rule 95 applies.
- Section 55 is different from the general refund mechanism under Section 54.
Conclusion
Section 55 of the CGST Act, 2017 provides a specialised refund mechanism for certain notified persons such as specified United Nations agencies, multilateral financial institutions, foreign embassies, consulates and other persons or classes of persons notified by the Government.
The provision is particularly important because these organisations may enjoy tax-related privileges arising from international agreements, diplomatic arrangements or government policy. Instead of providing an unrestricted exemption from GST on every purchase, the law allows the Government to specify eligible persons and notified supplies for which GST paid on inward supplies can be refunded.
The practical refund procedure is governed not only by Section 55 but also by the relevant notification and Rule 95 of the CGST Rules. Eligible persons generally use FORM GST RFD-10 and submit the required inward-supply details through GSTR-11. Proper invoices, correct identification details and compliance with notification-specific conditions are essential for a successful claim.
Therefore, anyone dealing with a Section 55 refund should not rely on the section alone. The correct approach is to examine Section 55, the applicable Government notification, Rule 95 and any relevant treaty or international agreement together.
Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).
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