TaxTMI 
TaxTMI 
Refund on Inverted duty structure
X X X X Extracts X X X X
X X X X Extracts X X X X
....efund on Inverted duty structure<br> Query (Issue) Started By: - Prasenjit Pal Dated:- 29-5-2021 Last Reply Date:- 12-6-2021 Goods and Services Tax - GST<br>Got 4 Replies<br>GST<br>A foreign company( F) and an indian company( D) together formed a consortium to execute a govt works contract services ( client-C). D imports materials from F and supplies them to C on cost basis with no value addition ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... D has to pay IGST on Import @ 18% and bills to Client on behalf of F(as F does not have any GST Regn) as per the Agreement on milestone basis @ 12%. So it ia case of Inverted duty structure and D is supposed to get Refund. The fact is as per Agreement entered between consortium and client ,selling price of D to F is fixed as below: say cost of material to D(import price) = 100(mat cost)+5(BCD)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... = 105 . GST paid on RCM basis on 105=18.90.(available as ITC). D has to sell the goods as it is to client(C) at ₹ 100(inclusive of GST). So effectively B is seeling it as a cost of ₹ 89.29(100/112*100). , tax charged to C=10.71. So D is selling goods to C at a loss and claiming credit from the Dept of Refund of ₹ 8.19(18.90-10.71). . query: wheather there will be any problem fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r grant of refund under inverted rate to D ? Reply By Atul Mehrotra: The Reply: Request the experts to share their opinion about this. Reply By Shilpi Jain: The Reply: Refund should be eligible as there is no condition for refund under inverted duty structure that the output tax has to be paid on more than the cost. Reply By YAGAY andSUN: The Reply: In our view, before applying for refund du....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to inverted duty structure, you need to go through the Valuation Rules as goods are being sold on loss. Reply By DeepakArya DGA: The Reply: Please check whether this contract is hit by N.No. 15/Central tax(Rate). If Yes, refund in such case will not be allowed in case of inverted duty structure.<br> Discussion Forum - Knowledge Sharing ....