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TMI BlogCalculation of refund of ITC in case of Zero-rated supply [ Rule 89(4) ]X X X X Extracts X X X X X X X X Extracts X X X X ..... ods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. * Clarification in respect of section Calculation of refund of ITC in case of Zero-rated supply * As per rule 89(4) of CGST Rules, In the case of zero-rated supply of goods or services or both without payment of tax under bond or letter of undertaking in accordance with the provisions of section 16(3) of the IGST Act, 2017, refund of input tax credit shall be granted as per the following formula - Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷ Adjusted Total Turnover Where, - (A) "Refund amount" means the maximum re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which the supply of services has not been completed during the relevant period; (E) "Adjusted Total Turnover" means the sum total of the value of- (a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and (b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services, [excluding- (i) the value of exempt supplies other than zero-rated supplies; and (ii) the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or sub-rule (4B) or both of rule 89 of CGST Rules, if any, during the relevant period. excluding the value of exempt supplies other than zero rated supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of CGST Rules, 2017. Manner of calculation of adjustment Turnover under Rule 89(4) of CGST Rules [Circular No. 147/03//2021-GST 12th March, 2021] Issue:- whether the restriction on turnover of zero-rated supply of goods to 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier, imposed by amendment in definition of the "Turnover of zero-rated supply of goods" vide Notification No. 16/2020-Central Tax dated 23.03.2020, would also apply for computation of "Adjusted Total Turnover" in the formula given under Rule 89 (4) of CGST Rules, 2017 for calculation of admissible refund amount. Clarification:- it is clarified that for the purpose of Rule 89(4), the value of exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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