Refund of GST

[Kalyanasundaram Subramaniam]

Ours is an Association of flat owners. We collect maintenance charges from members. We pay various bills for flat maintenance of premises and these bills are with GST. We do purchase various items for use for maintenance and here also we incur GST.

Is there any provision to claim refund of the GST paid by us? If so, how?

[KASTURI SETHI]

You are talking about refund. It is not refund. It is ITC (input tax credit). ITC is allowed on repair and maintenance. ITC is also allowed on movable property i.e. water motor, electricity generator, movable furniture, taps, pipes and miscellaneous items (sanitary fittings) etc. These are revenue expenditure. The availment of ITC is not hit by section 17(5)(d) of CGST Act.

Pl. note that if there is any exempted service, proportionate credit is to be reversed under Section 17 (1) of CGST Act read with Rule 42 of CGST Rules.

[Kalyanasundaram Subramaniam]

To Mr Kasturi Sethi

Thanks for your reply. However, as a layman I do not understand what is meant by input credit as applicable for our association. Is there any monetary benefit to the Association that can be claimed by some means? Could you please elaborate? Thanks/Regard.

S Kalyanasundaram

[KASTURI SETHI]

Under Section 54 (3) of CGST Act, refund is admissible only on two grounds:-

1. Export of service or goods or both

2. Inverted duty structure i.e. Input is on higher rate and final product is on lower rate and thus you are unable to utilize the credit.

In the situation explained by you, thus no refund is admissible to you. After taking the credit you can only utilise in the course or furtherance of business.

[Kalyanasundaram Subramaniam]

Thank you very much for your prompt response.

Regards.

S Kalyanasundaram

AI Summary

Input tax credit for association: ITC on maintenance and movable property may be claimed; refund generally unavailable. An association of flat owners cannot claim a refund of GST for routine maintenance; instead it may claim input tax credit for repair and maintenance and for movable property used for maintenance, but must reverse proportionate credit where exempt supplies are made; refunds are confined to prescribed grounds such as export or inverted duty structure and otherwise ITC must be utilised in the course of business.