RFD-04 Auto-Processing Feb 2026 No Manual Scrutiny for Claims Under 5 Lakh

From February 2026, GST refund processing under RFD-04 has been streamlined with auto-processing enabled for eligible refund claims up to ₹5 lakh. This reform is aimed at reducing delays, eliminating unnecessary manual scrutiny, and improving cash flow for compliant taxpayers, especially MSMEs.

Under the new system-driven framework, low-value refund claims are processed using automated validations based on return data and ITC reconciliation. Where filings are accurate and consistent, refunds can move faster without officer-level intervention.

This change is particularly beneficial for:
• MSMEs and small manufacturers
• exporters filing regular refund claims
• businesses with clean compliance history
• taxpayers facing minor but frequent refund accumulations

To qualify for auto-processing, businesses must ensure timely filing of returns, proper reconciliation of input tax credit, correct classification of supplies, and accurate refund applications. Any mismatch or inconsistency can still trigger manual review.

The RFD-04 auto-processing update reflects the GST system’s shift towards trust-based and technology-led compliance, where speed is directly linked to data accuracy.

For businesses, the key takeaway is simple: clean filings enable faster refunds.