GST Refund for Pharmaceutical Manufacturers ITC Refund India | GetMyCA

Author : Getmy Ca | Published On : 16 Mar 2026

If you run a pharmaceutical manufacturing business in India, chances are your GST credit is piling up every month — and you're not getting it back.

Here's why this happens: most pharma products like life-saving drugs, medicines, and formulations attract a lower GST rate on output (5% or 12%), but the inputs — API (Active Pharmaceutical Ingredients), packaging materials, chemicals, and machinery — attract 18% GST. This rate inversion creates an accumulated ITC balance that you can never fully utilise against your output tax liability.

The good news? The GST law allows you to claim a full refund of this accumulated ITC under the inverted duty structure provision.

We recently helped a Delhi-NCR based pharmaceutical manufacturer recover ₹14.3 lakh in GST refund — stuck for over 11 months — within 6 weeks of filing a properly structured RFD-01 application. That kind of working capital recovery can make a real difference to your business.