Inverted duty structure refund claims require fresh consideration under Rule 89(5) after VKC Footsteps on input tax credit computation.

Refund of unutilised input tax credit under the inverted duty structure must be reconsidered in light of the Supreme Court's ruling on Rule 89(5) of the CGST Rules, including the exclusion of input services from "Net ITC" as discussed in VKC Footsteps. The writ court did not decide the refund computation on merits and instead left the claim to the competent authority for fresh consideration. If the authority disagrees with the computation, it should pass a reasoned speaking order expeditiously.

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Issues: Whether the petitioner's refund claim arising from an inverted duty structure required reconsideration in light of the Supreme Court's ruling on the scope of Rule 89(5) of the Central Goods and Services Tax Rules, 2017, and whether the writ court should decide the refund computation on merits.

Analysis: The dispute concerned refund of unutilized input tax credit under Section 54(3) of the Central Goods and Services Tax Act, 2017, including the effect of the Supreme Court's decision in VKC Footsteps on the exclusion of input services from "Net ITC" under Rule 89(5). The Court noted that the matter was no longer to be examined on merits in the writ proceedings, and that the competent authority would have to consider the claim afresh in the light of the Supreme Court's decision. It further indicated that, if the authority disagreed with the computation, a speaking order with reasons should be passed expeditiously.

Outcome: The petition was disposed of with liberty for the petitioner to pursue a fresh decision before the competent authority.

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