Dear Experts,
One of supplier is supplying goods of HSN 8607 @5% GST but almost all inputs required are @ 18%. Now, his ITC is getting accumulated. Please advise whether refund of such accumulated ITC amount is available keeping in mind that during Pre-GST, there was clear provision for not claiming any set-off of Cenvat credit arises due to above.
Supplier Faces ITC Accumulation Issue with HSN 8607 Goods; No Refunds Allowed per Notification No. 5/2017. A supplier is facing an issue with accumulated Input Tax Credit (ITC) due to a lower GST rate of 5% on goods under HSN 8607, while inputs are taxed at 18%. Experts in the forum clarify that a refund of such accumulated ITC is generally not available unless it involves exports or supplies to Special Economic Zones (SEZ). The discussion references the CGST Act, 2017 and related rules, emphasizing that refunds are not permitted for goods exported with export duties or when drawbacks or integrated tax refunds are claimed. Notification No. 5/2017 further confirms that no refund is allowed for HSN 8607. (AI Summary)
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