Regarding GST refund for INVERTED DUTY STRUCURE.

[Jignesh Sitapara]

Dear Exprts

I had applied refund under 'ITC accumulated due to Inverted Tax Structure', Now department has raise notice for Declaration under second and third proviso to section 54(3) and Declaration under section 54(3)(ii), Now supplier also exporter and he already taken drawback from Custom. Now How can provide the declaration 54(3).

In this my knowledge serial number 2nd clearly mention that, I have not availed any drawback of Central Excise Duty / Service Tax / Central Tax on goods or services or both, in respect of which this refund claim is being preferred.

Please help me.

[Sadanand Bulbule]

Admittedly you have not availed drawback, you can give the declaration uunder Section 54(3)(ii) and the supplier's drawback does not bar your inverted duty sturcture refund claim.

[Jignesh Sitapara]

Thanks for Reply Sir

But Section (3)(ii) said only NIL ITC related,

Now what to do if my client take benefit of DRAWBACK. Please help Sir.

 

[Sadanand Bulbule]

Refund under Section 54(3) (ii) is restricted to the extent the claimant has availed drawback benefit. So reduce such ITC from the refund or revise the application.

[Jignesh Sitapara]

Thank you so much.

[Shilpi Jain]

Yes you can give the declaration. there is a circular also in this regard that refund cannot be denied.

AI Summary

Inverted duty structure GST refund depends on the claimant's own drawback claim and the required section 54(3) declaration. GST refund under the inverted duty structure requires the claimant to furnish the declaration under section 54(3), including that drawback has not been availed in respect of the refund claim. The supplier's taking of customs drawback does not by itself bar the claimant's refund where the claimant has not taken the prohibited benefit. If drawback has been availed by the claimant, refund under section 54(3)(ii) is restricted to that extent and the relevant ITC must be reduced or the application revised.