ITC accumulated due to inverted tax structure against supplies @.1%

[MohanLal tiwari]

Dear Panelists,

We are supplying goods to indigenous customers including Indian railway as well direct exports and through merchant exporters. We have got huge ITC accumulated due to supplies of goods to Railway way parts (HSN 8607) and supplies to merchant exporters @.1%.

Kindly advise whether we should file claim for refund under Head " ITC accumulated due to inverted tax structure".

[SHARAD ANADA]

Refer Circular No. Circular No. 37/11/2018-GST Dated the 15th March, 2018 para 13

[SHARAD ANADA]

In case of supply to railway you are not eligible for refund of ITC accumulated due to inverted tax structure against supplies @.1%. Refer Notification 5/2017 CT (Rate) Dated 28-06-2017

 

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Sarad.

[YAGAY and SUN]

We also endorse the views of our experts.

[KASTURI SETHI]

Sh.Sharad Anada is really hard worker. He infuses life into his reply.

[MohanLal tiwari]

Thanks Mr Sharad,

Could you please advise how to work out amount of refund in case of goods supplied to merchant exporters @0.1%.

AI Summary

ITC refund eligibility: supplies to national railways excluded; refund computation for merchant exporter supplies queried.
Entitlement to refund of input tax credit accumulated due to inverted tax structure is addressed by Circular No. 37/11/2018 GST (para 13). Supplies to the railways are not eligible for refund under the inverted tax ITC head, per the applicable rate notification framework. The remaining issue is how to compute the refundable ITC where supplies to merchant exporters are taxed at a nominal rate, requiring application of the circular's prescribed refund calculation methodology.