Refunding an international client payment involves more steps than refunding a domestic transaction. This guide covers the process, the timing, and the GST implications.
Should You Refund or Let Them Chargeback?
Before issuing a refund, consider:
Issue a refund when: The client has a legitimate complaint, there was a service failure, or a genuine cancellation per your policy. A voluntary refund is always better than a chargeback — same money out, but no account consequences.
Fight a chargeback when: The client received and used the service and is committing friendly fraud. Chargebacks cost you the money plus gateway consequences. But refunding a fraudulent claim enables future abuse.
Rule of thumb: Refund legitimate complaints proactively, before the client goes to their bank. It's cheaper and relationship-preserving.
How to Issue a Refund via Playto Pay
Step 1: Log in to Playto Pay dashboard.
Step 2: Navigate to Transactions → find the original transaction.
Step 3: Click Refund on the transaction.
Step 4: Select refund amount:
- Full refund: Return entire transaction amount
- Partial refund: Return a specific portion (e.g., for partial service non-delivery) Step 5: Enter refund reason (for your records and the client's statement).
Step 6: Confirm. Refund is initiated.
Timeline: International card refunds typically reach the client's card in 5-10 business days (depends on card issuer).
What Happens to Your Playto Pay Processing Fee
On full refund: Playto Pay typically refunds the processing fee. Verify with Playto Pay support for your specific account terms.
On partial refund: Processing fee may be partially refunded proportionally.
Refund Timeline by Card Network
| Card Network | Refund Timeline |
|---|---|
| Visa | 5-7 business days |
| Mastercard | 5-10 business days |
| American Express | 3-7 business days |
Client may not see refund immediately. Advise them to check in 5-10 business days before following up.
GST Implications of International Payment Refund
When you receive international service income, it's zero-rated under LUT. When you refund:
If you haven't yet filed GST return for that period: Remove the transaction from your export turnover in that period's GSTR-1 (or don't include it if not yet filed).
If you've already filed GST return: Issue a credit note and include it in your next GSTR-1 as a reduction in export turnover.
FIRA implications: The original FIRA documents receipt. The refund reduces your export turnover. Your CA needs both the original transaction record and the refund record for GST reconciliation.
Communicating the Refund to Your Client
Email template after initiating refund:
Subject: Refund processed — [Invoice number]
Hi [Client name],
I've processed a [full/partial] refund of [amount] for [invoice/service]. This should appear on your card statement within 5-10 business days depending on your bank.
[If partial refund]: The refund covers [specific portion]. [Explanation of what was delivered].
Please let me know if you have any questions.
Refund vs Credit Note for Future Work
Refund: Money returned to client's card. Clean separation.
Credit note toward future work: If client relationship is ongoing, offer a credit note that applies to their next invoice instead of a cash refund. Keeps the relationship, maintains your cash flow.
FAQ
How long does an international card refund take? 5-10 business days to appear on the client's card statement. Card issuer processing time varies.
What is the GST treatment of a refund on an international service payment? Issue a credit note. Reduce export turnover in next GSTR-1 filing. Consult CA if refund crosses financial year.
Can I issue a partial refund on Playto Pay? Yes. Select partial refund and enter the specific amount when initiating from the transaction page.