Refund of Inverted Duty Structure

Inverted-duty refunds cover input-goods credit, while eligible job-work service credit remains unavailable for refund computation.
Inverted duty structure refunds apply where credit accumulates because tax on inputs exceeds tax on taxable outward supplies. Credit on eligible input goods, such as paper and paper sheets used for taxable corrugated-box supplies, may be considered in the refund formula. Although job-work services may qualify for input tax credit when used in manufacturing taxable supplies, credit on input services and capital goods is excluded from the refundable net input tax credit. Refund calculation requires eligible input-goods credit, inverted-rated turnover, adjusted total turnover and tax payable on inverted-rated supplies. (AI Summary)