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".

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.