untilised input credit under GST

[N Balachandran]

Sir,

Can u please clarify the following in respect of unutilised Credit :

1. we are manufacture of Wind Mills. Wind mill will attract GST @ 5% but when purchase the components, cables and panel etc the rate of GST @ 18% or @28% is applicable . if so, can we claim refund of Excess unutilised credit?

2. When we undertake construction work, We discharge the GST @ 18%. Now my question is, the project is executed under loss and the situation arises the Excess credit available at the end of the project. if so, can we claim refund the unadjusted Credit or the same can be adjusted against out put tax payable on some other contract?

i shall be thankful if you could kindly clarify

Regards

N.Balachandran

.

[MUKUND THAKKAR]

1. we are manufacture of Wind Mills. Wind mill will attract GST @ 5% but when purchase the components, cables and panel etc the rate of GST @ 18% or @28% is applicable . if so, can we claim refund of Excess unutilised credit?

No you can not claim Unutilized balance if in cases where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax onoutput supplies,

2. When we undertake construction work, We discharge the GST @ 18%. Now my question is, the project is executed under loss and the situation arises the Excess credit available at the end of the project. if so, can we claim refund the unadjusted Credit or the same can be adjusted against out put tax payable on some other contract?

Credit ledger is summary of total cerdit available to you for the payment of output tax.so you can adjusted for the other contract. subject GSTN wise not one state to other state.

[Kishan Barai]

If you pay Excess GST on raw materials & receive less GST in sales then you can not get refund of excess GST paid, simply Excess GST paid would turn into your more Cost of production

[Ganeshan Kalyani]

Refund is allowed for inverted duty structure i.e. the tax paid on input is more than the the tax payable on output GST. Further to avail credit one to one correlation is not required.

[vk agarwal]

1. Yes, refund of accumulated credit on account of inverted duty structure of inputs is allowed

2. refund is allowed only if the credit has accumulated on account of exports or inverted duty structure of inputs. No refund is allowed if the credit has accumulated on account of any other reason . Therefore, refund will not be allowed in the situation described by you

[THYAGARAJAN KALYANASUNDARAM]

Dear sir,

I agree with Ganesh kalyani.

1. As per sec 54 of CGST Act, the refund provisions apply in case of a) zero rated supplies b) inverted duty structure. Since you are covered under inverted duty structure, so you are eligible for refund in excess of output tax and shall be applied before the expiry of 2 years from the date of relevant date.

2. Regarding undertaking of construction contract and if you are discharging of GST @ 18%, the excess may be adjusted in any other out put liability and there is no one to one correlation.

Whereas if you discharge the gst @12% along with land value, then the excess will be lapse to the government.

This is my opinion, please correct me in case my understanding is wrong.

AI Summary

Windmill Manufacturer Faces GST Refund Challenges Due to Inverted Duty Structure; Excess Credit Adjustment Options Discussed A manufacturer of windmills inquired about claiming refunds for unutilized GST credit due to the higher tax rates on inputs compared to outputs. Responses clarified that refunds for excess credit due to an inverted duty structure are generally allowed, but not when the credit accumulates from higher input tax rates than output. It was noted that excess credit could be adjusted against other contracts, subject to state-specific GST regulations. The discussion highlighted the importance of understanding the conditions under which GST refunds are permissible, particularly in cases involving inverted duty structures or export-related scenarios.