Circular No.173/2022

[Ethirajan Parthasarathy]

A Supplier is engaged in works contract service and is entitled to concessional rate of 12% for such contracts to local bodies.

Most of the materials needed for executing the state supply attract GST at 18% and also 28%.

Circular no 173/ dt 06/07/2022 provides for refund of accumulated ITC on account of outward supply at a concessional rate.

Most part of the circular gives emphasis on applicability of this circular only for supply of goods at concessional rate. However there is reference of outward services at concessional rate in the last but one line of para 4 of the said circular.

Can experts confirm whether service provider are also entitled to benefit conferred by Circular no. 173/ dt 06/07/2022.

AI Summary

Can Suppliers Claim GST Refunds on Input Services at Concessional Rates? Debate on Circular No. 173/2022 A supplier engaged in works contract services at a 12% concessional GST rate sought clarification on whether they could claim a refund for accumulated Input Tax Credit (ITC) due to the higher GST rates on materials (18% and 28%). Circular No. 173/2022 suggests refunds are available for goods at concessional rates, but it's unclear if this applies to services. Experts debated this, referencing legal precedents and recent amendments. While some argue that refunds should include input services due to formula changes, others maintain that refunds are technically for ITC on inputs, not input services.