RCM paid to Author

[CA Adarsh]

1.A book publisher pays RCM on content provider Author and Books are nil rated.

2. Above ITC on RCM is eligible used further course of business.

Can I Claim refund of RCM in inverted duty structure as books are nil rated and all other input services are taxable for publishing of books?

[Amit Agrawal]

Section 54(3) of the CGST Act, 2017 reads as follows:

"Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period:

Provided that no refund of unutilised input tax credit shall be allowed in cases other than––

(i) zero rated supplies made without payment of tax;

(ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council:

Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies." 

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Vijay kumar]

No. Because the books are nil rated.. in terms of Sn. 54 (3) of the CGST Act' 17 which excludes Nil rated outward supplies from IDS refund purview. As such, the ITC itself is ineligible and if there are taxable and exempt supplies, you will be governed by Rule 42/43 r/w Section 17(2), which stipulate that ITC on goods/services used exclusively for exempt supplies are ineligible.

[KASTURI SETHI]

Not eligible for refund. Section 54 is as clear as sunshine.

[Shilpi Jain]

The credit of GST paid under RCM is not eligible at all in the first place. Refund is only the next aspect to examine.

When no credit - no refund.

[Sadanand Bulbule]

Dear querist

I fully endorse the categorical statement of all the experts. No more doubts.

[CA Adarsh]

Thank you everyone for sharing detailed analysis and solution for my query

AI Summary

Refund of input tax credit on reverse charge not available where outward supplies are nil-rated; apportionment rules govern mixed supplies.
ITC on reverse charge paid for content supplied for nil rated books is ineligible for refund under Section 54(3), which excludes nil rated outward supplies from the inverted duty structure refund mechanism. For mixed supplies, apportionment and reversal rules determine the portion of credit attributable to taxable supplies; amounts attributable to nil rated supplies are not refundable.