9911796707
TMI Blog2025 (1) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise, Erode-II Division is upheld." 3. The petitioner is engaged in the manufacture of textile products under Chapters 52, 53, 54, 55 and 60 of the Customs Tariff Act, 1945 which is applicable for the purpose of classification and for determination of tax for payment of tax under the provisions of respective GSTN enactments of the year 2017. 4. The petitioner is under the inverted duty structure as the rate of duty on input tax is higher as compared to the tax liability on the final products under the provisions of the respective GST enactments, as a result of which there is an accumulation of Input Tax Credit. 5. By virtue of Notification No.5/2017-Central Tax (Rate) dated 28.06.2017, the Central Government on the recommendation of GST Council notified several products including the products manufactured by the petitioner at Serial Nos.3,4,5,6 and 7 to the above notification holding that no refund of input tax credit shall be allowed, where the credit was accumulated on account of inverted rate of tax where the rate of tax on inputs was higher than rate of tax of output supplies of such goods. 6. Thus, an exception was made for the purpose of refund under Section 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be lapsed in terms of notification No.20/2018-Central Tax (Rate) dated 26.07.2018 read with circular No.56/30/2018-GST dated 24.08.2018 (hereinafter referred to as the "said notification"). Some of these registered persons, who have attempted to claim refund of accumulated ITC on account of inverted tax structure for the same period in which the ITC required to be lapsed in terms of the said notification has been reversed, are not able to claim to which they are so eligible. This is because of a validation check on the common portal which prevents the value of input tax credit in Statement 1A of FORM GST RFD- 01Afrom being higher than the amount of ITC availed in FORM GSTR-3B of the relevant period minus the value of ITC reversed in the same period. This results in registered persons being unable to claim the full amount of refund of accumulated ITC on account of inverted tax structure to which they might be otherwise eligible. What is the solution to this problem? a) As a one-time measure to resolve this issue, refund of accumulated ITC on account of inverted tax structure, for the period(s) in which there is reversal of the ITC required to be lapsed in terms of the said no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 of the CGST Act on the amount which has been reversed belatedly. Such interest shall be calculated starting from the due date of filing of return in FORM GSTR-3B for the month of August, 2018 till the date of reversal of said amount through FORM GSTR-3B or through FORM GST DRC- 03, as the case may be. b) The registered person who has reversed the amount of credit to be lapsed in the return in FORM GSTR-3B for any month subsequent to August, 2018 or through FORM GST DRC-03 subsequent to the due date of filing of the return in FORM GSTR-3B for the month of August, 2018 would remain eligible to claim refund of unutilized ITC on account of accumulation due to inverted tax structure w.e.f., 01.08.2018. However, such refund shall be granted only after the reversal of the amount of credit to be lapsed, either through FORM GSTR-3B or FORM GST DRC-03, along with payment of interest, as applicable. 8. Thus, the Input Tax Credit accumulated on supplies received on or after 1st April 2018 in respect of goods mentioned at Serial Nos.1,2,3,4,5,6,6A,6B,6C and 7 were allowed to be claimed by way of refund under Section 4 of the CGST Act, 2017. However, in respect of accumulated Input Tax Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition to go into vires of the impugned Circular No.94/13/2019-GST dated 28.03.2019. Hence, this writ petition is taken up for final hearing and disposed of herein. 13. When the case was listed today, learned counsel for the petitioner who appeared through video conferencing demonstrated that the petitioner had surplus of accumulated Input Tax Credit and had not utilized the Input Tax Credit, all though the period in-dispute. In this connection, the learned counsel for the petitioner has drawn attention to the extract of the electronic credit ledger for the period between 01.10.2018 to 31.03.2019. 14. It is submitted that all through the periods there was excess credit and there was no occasion for the petitioner to utilize the accumulated credit of Rs. 6,86,66,289/- so as to deprive the department of tax on account of its failure to reverse the accumulated credit of Rs. 6,68,66,289/- till 31.07.2018. That apart, learned counsel for the petitioner would submit that the case of the petitioner is neither hit by Section 50 (1) or by Section 50 (3) of the CGST Act, 2017. 15. It is therefore, submitted that the impugned order of 3rd respondent in impugned Order-in-Original of the 3r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.2017 issued under Section 54 (3) of the CGST Act, 2017 inhibited the petitioner from claiming refund of the accumulated Input Tax Credit on account of credit of tax, on inputs being higher thus the tax on the outward supplies. It is only after Notification No.20/2018-Central Tax Rate dated 26.07.2018. The Government deemed it fit to allow refund of accumulated Input Tax Credit on the supply received on or after 1st Day of April, 2018, in respect of goods mentioned at Serial Nos.1,2,3,4,5,6,6A,6B,6C and 7 to Table 2 in Notification No.5/2017-Central Tax (Rate) dated 28.06.2017. 22. Perforce, the petitioner as was required to reverse Input Tax Credit lying unutilized Input Tax Credit for payment of tax for the period after the Month of July 2018. As such, credit was to lapse with effect from 01.08.2018. The petitioner reversed Input Tax Credit on 19.03.2019 for a sum of Rs. 6,68,66,289/- on 19.03.2019 which is not in dispute. There is also no dispute the aforesaid credit amount was also not utilized by the petitioner after 01.08.2018. 23. Therefore, levy of interest of Rs. 59,35,528/- purportedly in exercise of power under Sub-Section 3 of Section 50 of the CGST Act, 2017 is unju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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