Refund under inverted duty structure

[Kaustubh Karandikar]

In the formula of refund under inverted duty structure, the taxable person had considered the turnover of both manufactured and trading items and ITC of both manufacturing and trading items. The GST authorities had objected saying that figures of trading items cannot be considered in this formula. Views of the experts please.

AI Summary

Debate on GST Refund: Should Trading Turnover Be Included in Inverted Duty Structure Calculations? A discussion on a forum addressed a query regarding the refund process under the inverted duty structure in the Goods and Services Tax (GST) system. The issue centered on whether turnover and input tax credit (ITC) from both manufacturing and trading activities should be included in the refund formula. The GST authorities objected to including trading figures, arguing that trading does not involve an inverted duty structure. Various experts provided opinions, suggesting that while GST law does not differentiate between manufacturing and trading, the inclusion of trading turnover depends on specific circumstances, such as rate differences between inputs and outputs. The consensus was that the authorities' stance might not be legally tenable, but further clarification and case law might be needed.