Refund of Inverted Duty

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my clients selling specified goods to R&D Govt. Dept and charge @ 5% GST as per the notification no.45/2017 dated 14.11.2017 - Central Tax(Rate) whereas he purchases at higher rate of tax 12% & 18%.

Now, my query is that, will he be apply for refund u/s 54 of GST Act, for the un-utilized ITC and would be treated as Inverted Duty structure?

Thanks in Advance.

AI Summary

Can a client get a GST refund for unutilized ITC due to inverted duty structure? Section 54 explained. A client is selling goods to a government R&D department at a 5% GST rate but purchasing them at higher rates of 12% and 18%. The client inquires whether they can apply for a refund under section 54 of the GST Act for unutilized Input Tax Credit (ITC) due to the inverted duty structure. An expert confirms eligibility for a refund, but another expert clarifies that refunds are not available for unutilized ITC from input services and capital goods, only for inputs, and notes ongoing legal challenges regarding this issue.