REFUND OF CREDIT LEDGER CLAIM DUE TO INVERTED DUTY STRUCTURE, Goods and Services Tax - GST

[SAFETAB LIFESCIENCE]

Dear Experts,

We have applied and refund received of ITC availed/accumulated in Electronic Credit Ledger for the periods

of Aug-2017, Sep-2017, Nov-2017 and Dec-2017 in Feb/March, 2018.

Now, GST officials informed us that the refund received by us against INPUT SERVICES is not elgible for refund as per Notification No. 26/2018 dt. 13.06.2018 retrospectively effect from 01.07.2017.

Is it true. What does 26/2018 says ???

Posts / Replies

[Adarsh Gupta]

Yes, it is not allowed. This has been challenged in Gujrat High court..you may file an appeal if exposure is material.

[Nitika Aggarwal]

Dear Sir,

The aforesaid notification no. 26/2018-CT dated 13.06.2018 in respect of the same reads as under:-

"(iii) with effect from 01st July, 2017, in rule 89, for sub-rule (5), the following shall be substituted, namely:-

“(5) In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula:-
Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC ÷ Adjusted Total Turnover} - tax payable on such inverted rated supply of goods and services.

Explanation:- For the purposes of this sub-rule, the expressions –

(a) Net ITC shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both; and

(b) Adjusted Total turnover shall have the same meaning as assigned to it in sub-rule (4).”

Now accordingly you can check the validity of same in your case.

Regards

Nitika Jindal

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