refund of igst paid on machinery imported

[satbir singhwahi]

Sir

Dyeing unit imported machinery and paid IGST on imports. Inputs dyes and chemicals are 18% gst, Whereas Output -dyeing job work is 5% gst. Whether refund under Inverted duty structure allowed for IGST paid on machinery imported.

[Rajagopalan Ranganathan]

Sir,

According to Section 54 (3) (ii) of CGST Act, 2017a registered person may claim refund of any unutilised input tax credit at the end of any tax period where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council.

Credit includes credit of IGST paid on imported machinery also. Hence you are eligible for refund under the above mentioned provision.

[satbir singhwahi]

Thanks Sir

Now form rfd-01a I need file manually for each month

[KASTURI SETHI]

Sh.Ranganathan Sir,. Recently in this forum it was opined that refund of unutilized credit on account of capital goods is not admissible. Now is it clear and confirmed that refund of credit of IGST paid on machinery is allowed as explained by you ?

[Rajagopalan Ranganathan]

Sir,

In respect of Goods enumerated in the table appended to Notification No. 5/2017-Central Tax (Rate) dated 28.6.2017no refund of unutilised input tax credit shall be allowed, where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supplies of such goods (other than nil rated or fully exempt supplies).

Similarly as per Notification No. 15/2017-Central Tax (Rate) dated 28.6.2017 in respect of supply of service mentioned at Sl. No. 5 (b) of Schedule II of CGST Act, 2017, namely construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier no refund of unutilised input tax credit shall be allowed, where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supplies of such goods (other than nil rated or fully exempt supplies).

In respect of all other goods and services the registered person is eligible for refund of unutilised input tax credit shall be allowed, where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supplies of such goods (other than nil rated or fully exempt supplies).

If filing of refund claim electronically in the GSTN Portal is not possible you can file the refund claim manually. In this connection please refer to Circular No.24/24/2017-GST dated 21.12.2017.

[CSSANJAY MALHOTRA]

Sh. Kasturi ji, you rightly remarked that the issue has already been dealt earlier in this forum (Issue ID : 113228). Refund of accumulated ITC is not available on Capital goods.

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji,

No doubt, Sir.

AI Summary

Can a dyeing unit claim IGST refund on imported machinery under inverted duty structure? Section 54(3)(ii) discussed. A discussion on a forum addressed whether a dyeing unit could claim a refund of IGST paid on imported machinery under the inverted duty structure. One participant cited Section 54(3)(ii) of the CGST Act, 2017, which allows refunds of unutilized input tax credit when input tax rates exceed output tax rates, including IGST on machinery. However, it was noted that certain goods and services listed in government notifications are exceptions to this rule. Another participant highlighted that refunds for capital goods are generally not available, referencing previous discussions and official circulars.