- Can every client get the accumulated ITC back in the form of refund under GST?As per explanation 3 of section 54 of the CGST Act, A registered person may claim a refund of unutilised Input Tax Credit (ITC). The ITC on account of inverted tax structure can be claimed at the end of any tax period where the credit has accumulated on account of the rate of tax on inputs being higher than the rate of tax on output supplies. A tax period is a period for which a return is required to be furnished. Exceptions where the refund of the unutilised input tax credit cannot be claimed, are as follows:
- Output supplies are nil-rated or fully exempt supplies except for supplies of goods or services or both as may be notified by the Government on the recommendations of the GST Council.
- If the goods exported out of India are subject to export duty.
- If supplier claims refund of output tax paid under IGST Act.
- If the supplier avails duty drawback or refund of IGST on such supplies.
- Is any category of goods barred from inverted duty structure refund despite qualifying as per section 54 of the Act?Yes, by dint of notification no. 5/2017 – central tax dated 28.06.2017 has barred the following category of goods from inverted duty structure:
S.NO. Tariff item/heading/sub heading/chapter Description of Goods 1. 5007 Woven fabrics of silk or of silk waste2. 5111 to 5113 Woven fabrics of wool or of animal hair3. 5208 to 5212 Woven fabrics of cotton4. 5309 to 5311 Woven fabrics of other vegetable textile fibers, paper yarn5. 5407, 5408 Woven fabrics of manmade textile materials6. 5512 to 5516 Woven fabrics of manmade staple fibers7. 60 Knitted or crocheted fabrics [All goods]8. 8601 Rail locomotives powered from an external source of electricity or by electric accumulators 9. 8602 Other rail locomotives; locomotive tenders; such as Diesel-electric locomotives, Steam locomotives, and tenders thereof 10. 8603 Self-propelled railway or tramway coaches, vans, and trucks, other than those of heading 8604 11. 8604 Railway or tramway maintenance or service vehicles, whether or not self-propelled (for example, workshops, cranes, ballast tampers, trackliners, testing coaches, and track inspection vehicles) 12. 8605 Railway or tramway passenger coaches, not self-propelled; luggage vans, post office coaches, and other special purpose railway or tramway coaches, not self-propelled (excluding those of heading 8604) 13. 8606 Railway or tramway goods vans and wagons, not self-propelled 14. 8607 Parts of railway or tramway locomotives or rolling-stock; such as Bogies, Bissel-bogies, axles and wheels, and parts thereof 15. 8608 Railway or tramway track fixtures and fittings; mechanical (including electro-mechanical) signaling, safety or traffic control equipment for railways, tramways, roads, inland waterways, parking facilities, port installations, or airfields; parts of the foregoing - What is the time limit to apply for the refund?From 01.02.2019 the time limit in the case of a refund of unutilised input tax credit under clause (II) of the first provision to section 54(3) is two years from the due date for furnishing return under section 39 for the period in which such claim for refund arises.
- Are we required to deposit the papers physically before the jurisdictional authority?No. If all the credit claimed are present in GSTR 2A and details of outward supply match with GSTR 1, then there is no need to submit the papers physically. Though the refund amount would be based upon the formula. All the ITC accumulated can be refunded back by what are the documents that I need to upload for this service?
Refund
Inverted Duty Structure Refund
Inverted tax structure simply refers to a situation where the GST rate on inputs purchased is higher than the GST rate on Finished Goods. This situation results in the accumulation of unutilized input tax credit and thus there arises a need for a refund.
- No client Involvement
- Error Free Sheet
- Guaranteed refund