Inclusion of RCM while calculating refund for inverted duty structure, Goods and Services Tax - GST

[Vineet Agrawal]

As per Rule 89 of CGST Rules,

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 x (Net ITC ÷ ITC availed on inputs and input services)]

Should input tax claimed under the head of RCM be included in "ITC availed on inputs and input services" while calculating the refund amount? [Note: RCM has been paid on inward services received]

Posts / Replies

[Padmanathan Kollengode]

As there is no specific bar on ITC of RCM paid on inward services/ inputs in R.89, the same can be included in the formula as well.

[Kiran Tahelani]

I agree with Padmanathan Kollengode. you can rightly include ITC of RCM. But to the best of my knowledge refund on ITC on account of service is not available, therefore no point of discussion of inclusion of RCM paid on account of inward services.

Experts can correct me if i am wrong

[Padmanathan Kollengode]

Ld Kiran Ma'am, you are correcf. "Net ITC" in formula will include only ITC of inputs (inc RCM paid on inputs if any) to my understanding .

[Shilpi Jain]

In the ITC availed on inputs and input services include the RCM credit. Net ITC would be ITC of inputs only.

[Vineet Agrawal]

Thank you everyone for your valuable inputs.