TaxTMI 
TaxTMI 
TaxTMI 
Refund of unutilized ITC on account of accumulation due to inverted tax structure [Section 54(3) read with Rule 89 ]
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....ected to export duty. [ Omitted vide Finance (No. 2) Act, 2024 ] [ w.e.f. 01.11.20224 vide N.No. 17/2024 dated 27.09.2024 ] * As per Notification No. 15/2017-Central Tax (Rate) dated 28.06.2017 [ w.e.f 01.07.2017 ] * ​​​​​From 20.10.2023 No refund of unutilised input tax credit shall be allowed under section 54(3) of the CGST Act, * in case of supply of services of construction of a complex, building or a part thereof, intended for sale to a buyer, wholly or partly, where the amount charged from the recipient of service includes the value of land or undivided share of land, as the case may be, * except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier * Upto 19.10.2023 specified in sub-item (b) of item 5 of Schedule II of the Central Goods and Services Tax Act other point to be considered * As per Section 54(3), where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies ....
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.... refunds in cases of inverted duty structure. This definition included Input Tax Credit (ITC) on both inputs and input services. Prior to the amendment, Rule 89(5) stated that the term "Net ITC" would have the same meaning as assigned in sub-rule (4), which defined "Net ITC" as the ITC availed on inputs and input services during the relevant period, excluding the ITC for which a refund was claimed under sub-rules (4A) or (4B), or both. * Further, Refund shall be allowed on turnover of goods as well as services. Before amendment by Notification 21/2018, the formula provided for refund in respect of turnover of inverted duty rated goods only. Notification No. 26/2018 dated 13-06-2018, further reiterated the above amendments in formula for inverted duty rated refunds and also made it applicable retrospectively w.e.f. 01-07-2017. * Guidelines for refunds of unutilized Input Tax Credit [ Para 36 to 40 of Master Circular No. 125/44/2019-GST Dated 18.11.2019 ] * Para 36 - Applicants of refunds of unutilized ITC, i.e. refunds pertaining to items listed at (a), (c) and (e) in para 3 of the Circular No. 125/44/2019-GST, shall have to upload a copy of FORM GSTR-....
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.... * After calculating the least of the three amounts, as detailed above, the equivalent amount is to be debited from the electronic credit ledger of the applicant in the following order: * a) Integrated tax, to the extent of balance available; * b) Central tax and State tax/Union Territory tax, equally to the extent of balance available and in the event of a shortfall in the balance available in a particular electronic credit ledger (say, Central tax), the differential amount is to be debited from the other electronic credit ledger (i.e., State tax/Union Territory tax, in this case). * Para 38 - The order of debit described above, however, is not presently available on the common portal. Till the time such facility is made available on the common portal, the taxpayers are advised to follow the order as explained above for all refund applications. However, for applications where this order is not adhered to by the applicant, no adverse view may be taken by the tax authorities. The above system validations are being clarified so that there is no ambiguity in relation to the process through which an application in FORM GST RFD-01 is generated. * Pa....
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....is accumulated on account of rate of tax of inputs being higher than the rate of tax on output supplies i.e. on account of inverted duty structure. Rule 89(5) of CGST Rules, 2017 prescribes the formula for grant of refund in cases of inverted duty structure. Vide Notification No. 14/2022-Central Tax dated 05.07.2022, amendment has been made in the formula prescribed under rule 89(5) of CGST Rules, 2017. Further, vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022, which has been made effective from 18.07.2022, the restriction has been placed on refund of unutilised input tax credit on account of inverted duty structure in case of supply of certain goods falling under chapter 15 and 27. [ See Circular No. 181/13/2022-GST dated 10.11.2022 ] * Clarification on issue of claiming refund under inverted duty structure where the supplier is supplying goods under some concessional notification. [ See Circular No. 173/05/2022-GST dated 06.07.2022 ] * Clarification regarding removal of restriction of refund of accumulated ITC on fabrics. [ Circular No. 56/30/2018-GST dated 24.08.2018 ] * Clarification on "Whe....