Refund under inverted structure

[natarajan ramakrishnan]

Dear sir,

Understand that, There is time limitation for claiming refund under inverted structure refund as 2 years from from the end of tax period for which the refund is sought.

Our case, falling under inverted duty structure. Whereby for refund eligibility, the input services and capital goods will not considered.

Considering the formula under rule 89(5), our ITC on inputs is very less considering the inverted duty liability. Resulting, the refund eligibility is arrived to nil..

Though we have excess ITC on services, the textile industry not in a position to use it.

This is an undue hardship faces the industry and working capital also badly impacting.

My question.

a. Any remedy available to overcome this issue.

B.after the period of 2 years, whether the ITC can be carry forwarded for future adjustment.

C. Pls share the outcome of the rajantan high court on the writ petition filed on 89(5).

D. How to resolve the WC issues.

Your reply will be more helpful for taking the final decisions.

With rwgards

Natarajan

AI Summary

Concerns Over GST Refunds Under Inverted Duty Structure; Rule 89(5) Challenge and ITC Carry Forward Clarification. A forum participant raised concerns about claiming refunds under the inverted duty structure of the Goods and Services Tax (GST), highlighting that the refund eligibility becomes nil due to minimal input tax credit (ITC) on inputs and the inability to utilize excess ITC on services. The participant sought remedies for this issue, clarification on carrying forward ITC after two years, and updates on a pending writ petition challenging Rule 89(5) of the GST Rules, 2017. Responses suggested litigation or representation to the GST Council, confirmed the two-year limit for refund claims, and advised on challenging the rule for refund of unutilized credits.