refund of inverted duty structure under gst
Refund of inverted duty structure under Goods and Services Tax Act 2017 there is a provision when a person paid GST more than his GST liability for a certain period such person can cliam refund application. If a taxpayer whose refund is due should file refunded application whithin a particular time period.
When can the refund be claimed
There are many case where GST refund can be claim by taxpayer some are given below
1. ITC accumulated due to inverted duty structure under gst
2. Excess payment of GST by error or ommission
3. Export of Goods or Services
4. Purchases made by UN bodies or embassy’s
Inverted duty structure mean GST tax rate is higher on input and lower on outward supply.
Example: X purchase goods @18% GST rate while GST rate on sale product applicable only @ 5%
GST rate 18%
Less:GST rate 5%
Difference 13% is inverted duty
In the invertd duty structure government refund on those taxpayer whose ITC accumulated due to goods item only
GST refund not allowable on ITC which accumulated due to
This is totally unfair with taxpayer
A ecommerce platforms user seller availed service more than 60% of total goods purchased
Mr. X is use Amazon Platforms to sale his product
If he purchases his goods Rs.1,00,000
He also availed Amazon service Rs. 60,000 or more
in such case mr. x has accumalted ITC but he could not calim GST refund.
It is unjustfy with taxpayer who avail services both person are taxpayer but one enjoy refund facility but other cannot do so although both are GST paid.
Gujarat high court allows refund on services ITC but Madars high court denial