Can refund be claimed on closing balance of ITC at time of cancellation of registration

[Mallikarjuna Gupta]

Can the taxpayer claim refund of ITC in the credit ledger balance where the input tax credit is more than than the amount required to be reversed? If yes, how to claim?

Example trader purchased goods for ₹ 10,00,000 paying ITC @18% and he couldn't sell the same with value addition but sold for only ₹ 9,00,000 and discharged tax liability n filed returns. He also had some service inputs of ₹ 10,000. Now the dealer wants to surrender registration, in this case can he get the refund of ₹ 18,000 ( on goods sold for loss) plus ITC on Services of ₹ 10,000. If yes, how can he claim ?

AI Summary

Refund of Input Tax Credit on registration cancellation remains contested; entitlement and reversal rules determine available remedies.
Whether a registered person may obtain a cash refund of a closing balance of Input Tax Credit on cancellation of registration is contested: some responses assert ITC ceases on cancellation and surplus credit must be reversed, noting refunds are admissible only under specific heads and ITC must meet entitlement conditions; others cite Cenvat-era precedent allowing refund on closure and note that taxpayers have sought similar outcomes under GST, though advance rulings have met varied success.