Refund of Inverted Duty & Refund of ITC for export under LUT

[Praveen Nair]

Hi All

Can you please confirm whether we can claim Refund of ITC under Inverted Duty Structure and also Refund of ITC for export done under LUT together, for the same financial year.

Currently we are claiming only LUT ITC refunds whereas the ITC due to difference in output and input tax (Inverted duty) is accumulating.

Let me know if more clarity is required.

Thankyou!

[Ganeshan Kalyani]

Sir, you will have to keep both the transaction separately i.e. export supply and its corresponding ITC. And supply at lower GST and the input of which is taxable at a higher GST rate. In my view if both are separately maintained then refund can be claimed.

[KASTURI SETHI]

Same financial year is not a hurdle. Separate maintenance of records will be convenient and safe for this purpose. I agree with Sh.Ganeshan Kalyani Ji.

[PAWAN KUMAR]

Dear sir,

Both the refunds , there are separate rules and formulas, you may claim separate application for both types of refunds subject to conditions specified therein in the rules itself.

[PAWAN KUMAR]

Dear sir,

rules are 89(4) & 89(5) of CGST Rules, 2017.

[Shilpi Jain]

Though you cannot claim 2 kinds of refunds for the same transaction. For one export you can either go for ITC refund or inverted duty structure refund.

If there are more than one period in the year for which you want to go for refund or more than 1 export transaction, you can claim different types of refund for each period / transaction. There is no bar in that.

[KASTURI SETHI]

I agree with Madam Shilpi Jain. Her reply has enriched my knowledge. Thanks a lot, Madam.

[PAWAN KUMAR]

dear sir,

there is no bar in filing refund, you may claim refund in both the rules. 89 (4) is for export only, please check the rules. inverted tax structure refund rules prescribe for refund of tax accumulating on input at higher rate of tax than output at lower rate of tax. please check also master circular of refund circular no.125 dated 18.11.2019.

[Madhusudan Mishra]

Even if you want to apply for a refund under an inverted duty structure then what amount you will put in place of "tax payable on such inverted rated supply of goods and services" in the formula prescribed under rule 89(5) as you are exporting goods under LUT?

AI Summary

Refund of ITC eligibility: separate maintenance permits distinct refund claims under inverted duty and export LUT rules.
The two refund categories-refund of ITC under an inverted duty structure and refund of ITC for exports under LUT-are governed by distinct procedures and formulas; they may be claimed in the same financial year provided the export and inverted-duty transactions and related ITC are separately maintained and separate refund applications are filed. A single transaction cannot support two different refunds simultaneously, though different transactions or periods may be claimed under different provisions. Practical procedural guidance and circulars address formula application where exports occur under LUT.