Lapsing of input tax credit on fabrics alters refund entitlement while protecting service and capital goods credits. The amendment withdraws the refund bar on accumulated input tax credit for specified fabrics prospectively while directing that accumulated input credit on such fabrics, relating to inward supplies received up to the cutoff date and remaining unutilised after payment of tax for the cutoff month, shall lapse. The lapsing applies only to input credit on goods, excludes input services and capital goods, and uses the statutory refund calculation formula (applied mutatis mutandis) - which excludes zero rated supplies - to determine the amount to be treated as lapsed; taxpayers must self assess and report that amount in their return for the month after the cutoff.
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Provisions expressly mentioned in the judgment/order text.
Lapsing of input tax credit on fabrics alters refund entitlement while protecting service and capital goods credits.
The amendment withdraws the refund bar on accumulated input tax credit for specified fabrics prospectively while directing that accumulated input credit on such fabrics, relating to inward supplies received up to the cutoff date and remaining unutilised after payment of tax for the cutoff month, shall lapse. The lapsing applies only to input credit on goods, excludes input services and capital goods, and uses the statutory refund calculation formula (applied mutatis mutandis) - which excludes zero rated supplies - to determine the amount to be treated as lapsed; taxpayers must self assess and report that amount in their return for the month after the cutoff.
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