Inverted Tax Utilization

[DEEPAK SHARMA]

Sir,

One is manufacturing normal products, where rate of tax on inputs and output is almost same, simultanously they manufacturing footwear where input tax rate is higher i.e. 18% and output tax rate is 6% it means its under inverted tax rate structure.

Is it possible to the taxpayer they can use spare tax accumulated on raw material of footwear to liability arised on normal products.

Thanks

AI Summary

Input tax credit can be used across products under the same GSTIN, subject to conditions and dispute risk.
Input tax credit is available where purchases or expenses are incurred in the course or furtherance of business and supplies are taxable. Excess input tax on one product may be used to discharge output tax on another product if both activities fall under the same GSTIN and inputs are for business purposes. Refunds for inverted duty structures are available but subject to procedural conditions. Use across different business verticals may attract dispute, so maintain documentation to support set off or refund claims.