Refund of unutilised Input Tax Credit (ITC)

GST Law: Refunds of Unutilized ITC for Zero-Rated Supplies and Inverted Duty Structure with Interest on Delays

The GST Law allows for the refund of unutilized Input Tax Credit (ITC) in two scenarios: zero-rated supplies and inverted duty structure. Zero-rated supplies can claim refunds either without tax payment under a bond/Letter of Undertaking or with tax payment. Inverted duty structure refunds apply when input tax rates exceed output tax rates, with exceptions. Refund claims must be filed with prescribed documentation, and provisional refunds are granted within seven days, with final settlements due within 60 days. Interest is payable on delays. The process is streamlined, requiring minimal documentation, and refunds are credited directly to the claimant's bank account.