Inverted Duty Structure on Tractors Assembly

[Rajendra Prasad]

Dear Sir,

I am a tractor manufacturer. I purchase various parts and engine by paying itc at 18%. But tractor is taxable at 12%.

Can I accumulate and carry forward excess itc in my Electronic Credit Ledger.

Can I cliam excess itc under inverted duty structure as my out put tax is always less than itc.

AI Summary

Inverted duty structure: refund of accumulated input tax credit where input tax rate exceeds output tax rate may be claimed.
Refund under the inverted duty structure is available where input tax rates exceed output tax rates and an unutilised input tax credit remains; statutory provision cited is section 54(3) CGST Act read with rule 89(5). Accumulated credit on inputs may be refunded or carried forward, but eligibility for refund of credit attributable to input services is disputed and transitional credit is excluded by administrative clarification.