Refund of accumulated ITC due to supplies @0.1% GST merchant exporters

[MohanLal tiwari]

Dear Panelists,

We are manufacturing & supplying goods to merchant exporters @ 0.1%, Railway parts @5% and others @18%. Due to maximum supplies to merchant exporters and railways, the ITC is getting accumulated day be day.

Kindly advise whether we should claim refund of accumulated ITC on account of supplies to merchant exporters, if so how we can segregate the ITC against ITC taken for manufacturing of export or railway goods if some of the inputs are common for all.

AI Summary

Inverted tax structure: refund claim possible for accumulated input tax credit where inputs attract higher tax than outputs.
Accumulation of input tax credit because inputs attract higher GST than outputs taxed at a concessional rate can justify a refund under the inverted tax structure; merchant exporter transactions are treated as export supplies for this purpose. Where inputs are common to supplies at different rates, claimants should segregate ITC by documentary methods such as cost accountant certification or apportionment by turnover ratio to allocate credit to lower rated supplies and exports.