REFUND ON INVERTED DUTY STRUCTURE

[Rajesh kumar]

R/S

ONE PERSON REGISTER UNDER GST. HIS SALE MANUFACTURE PRODUCT FALL UNDER @ 12% BUT ON INPUT GOODS RATE IS 12 AND 18%. SO IN THIS CASE HOW I CALCULATE OF AMOUNT FOR REFUND UNDER INVERTED DUTY . PLS HELP

[Rajagopalan Ranganathan]

Sir,

According to rule 89 (5) of CGST Rules, 2017, "In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula :-

Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC ÷ Adjusted Total Turnover} - tax payable on such inverted rated supply of goods and services.

Explanation : - For the purposes of this sub-rule, the expressions -

(a) Net ITC shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both; and

(b) Adjusted Total turnover shall have the same meaning as assigned to it in sub-rule (4).]

“Adjusted Total Turnover” means the sum total of the value of -

(a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and

(b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services, excluding -

(i) the value of exempt supplies other than zero-rated supplies; and

(ii) the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or sub-rule (4B) or both, if any,

during the relevant period.

You have to calulate the maximum refund amount using the prescribed formula.

AI Summary

Refund on inverted duty structure: method to compute refundable input tax credit under GST rules. The Maximum Refund Amount for inverted duty structure is computed by multiplying the turnover of inverted-rated supplies by the ratio of Net ITC to Adjusted Total Turnover, and then subtracting the tax payable on those inverted-rated supplies. Net ITC excludes credits already claimed under other refund provisions. Adjusted Total Turnover is the taxable turnover in the State or UT adjusted by excluding services turnover, exempt supplies, and supplies for which separate refunds are claimed.