REFUND OF ITC -

[SAFETAB LIFESCIENCE]

Dear Experts,

We are going to submit application for refund of ITC accumulated due to inverted duty structure. We are not exporters and we are not having zero/nil rated outward supply.

In computation of of maximum refund to be claimed (statement-1), the net input tax credit, we should exclude ITC on input service and ITC on capital goods (or) we can exclude only ITC on input services alone. We understand from 26.09.2019, refund rules have been amended.

Net input tax credit (4) (₹)

Edit the Net ITC to exclude, the ITC availed on input services and the ITC of refund claimed under Rule 89 (4A) and/ or (4B)

In the application, it shows like this above.

Whether, we can include ITC taken on Capital Goods or Not ???

[KASTURI SETHI]

See Rule 89(5) of CGST Rules, 2017 inserted vide Notification No.26/18-CT dated 13.6.18 effective retrospectively i.e. from 1.7.17. Capital Goods are to be excluded.

AI Summary

Refund of input tax credit: exclude ITC on capital goods and specified input services when claiming inverted duty refund.
For refund claims under the inverted duty structure, the net input tax credit in Statement-1 must exclude ITC on input services, ITC already claimed under the refund sub provisions, and ITC on capital goods, because the refund rules expressly require exclusion of capital goods credits from the refundable net ITC.